Rights Remain, As ESPN, Fox Score $3 Billion Pac-12 Deal

The Pac-12 has signed a 12-year, $3 billion media rights deal with ESPN and Fox Sports Media Group that will significantly increase the conference's exposure for football, basketball, women and Olympics sports.
Covering the 2012-13 through 2024-25 school years, the agreement encompasses football and basketball, women's and Olympic sports. By picking up the distaff and Olympic action, ESPN, according to sources, is paying a higher portion of the rights fee, which amounts to a combined average outlay of $250 million annually.
A number of factors coalesced to drive up the most lucrative conference deal in college sports history. Some Big East content aside, the Pac 12 was the last major conference whose rights will be available for some time, given the recent spate of long-term collegiate pacts that have been locked up by ESPN and Fox. The bidding was stoked by interest from Comcast's NBC Sports, which was looking to increase the profile of national cable network Versus, and Turner Sports, which eyed the basketball as a complement to its 14-year, $10.8 billion deal with CBS for the NCAA Men's Division I Basketball Championship. CBS did not pursue Pac-12 rights.
However, the national agreement leaves plenty of rights for a dedicated conference linear network, digital services and a properties unit, under Pac-12 Enterprises.
Scheduled for an August 2012 kickoff, the Pac-12 network will present 36 football matchups, including a number of top-flight contests as the channel will be involved in a game selection process with Fox and ESPN.
"We are pleased and confident that with our high-quality picks for football and basketball, our partners will find the rights to be significant," said Pac-12 commissioner Larry Scott in an interview. [The network will become the Pac-12 on July 1, when Colorado and Utah officially join the conference.]
Scott said Pac-12 Enterprises is not looking to immediately establish a distribution team, but will instead focus on "macro strategic decisions about the kind of partnerships we should pursue. Fundamentally, we want to determine who would be right for the distribution process."
To that end, Scott said over the course of the year-long negotiation process, the conference has spoken to a variety of parties, including cable and satellite distributors, and "broadly speaking" identified five basic kinds of distribution gambits: "we could partner with a network group"; team with a traditional distribution partner; engage with a financial group; work with a technology/digital company looking to get into the content business; or "convert an existing channel."
Should the latter play materialize, Scott said the network, which aspires to national carriage, would be working from that service's existing rate card. "If we start from scratch, it would be similar structure as the Big 10 Network," he said.
That service, which is 49% owned by Fox Networks receives a monthly subscriber license fee in excess of 70 cents and approaching $1 from some carriers within the eight states in the conference's footprint, as well as a much lower fee in the rest of the country. The sports programmer indicates that its strategy does not call for starting another national conference network.
Chris Bevilacqua, a consultant for Evolution Media Capital, the exclusive media advisor to the conference, said the enthusiasm expressed by various parties over the past year, led to the decision to form Pac-12 Enterprises. "There is significant interest in all five buckets," he said, referring to Scott's aforementioned lineup.
Bevilacqua said decisions about which directions Pac-12 Enterprises will take with the linear and broadband services could come within the next 30 to 60 days.
On the digital front, Bevilacqua said the Pac-12 has flexibility. It could work with each of the "conference member institutions to build 12 different digital networks or build a portal that could have 12 [school] channels."
Bevilacqua wouldn't handicap how he thought the linear channel would develop. "Just like with broadband, there are slightly different constructs," including a scenario in which "a technology/digital company might make a big move into the content business, with a linear presence."
One network media executive said that could prove a long road to hoe. "If [the Pac-12] doesn't strike a deal with one of the [cable or satellite] distributors, it could be a protracted affiliation process," he said.
As always, it will come down to a matter of price.
"It depends on what Larry [Scott] thinks he can get for it. Is it $1.25 or $2 per month in market?" noted the executive.
For Fox Sports Media Group, the deal underlines its commitment to college sports, after it failed to retain the Bowl Championship Series in the face of a higher bid by ESPN.

The new Pac-12 deal will bring Fox broadcast into college football's traditional Saturday schedule for the first time. The network will air a minimum of eight regular-season conference games annually, including at least four in primetime. Moreover, Fox in even years, kicking off in 2012, will air six Pac-12 conference football championship games in Friday primetime.
The pact also solidifies FX's reemergence as a sports outlet as the general-entertainment cable service will feature 14 Pac-12 football games each campaign. In March, the 99 million-home network announced it would present a college football game-of-the-week produced by Fox Sports, beginning this season. Showcasing a minimum of 13 games, FX will also air conference and non-conference match-ups from the Big 12 and Conference USA.
As for hoops, Fox Sports Net's owned-and-affiliated regional sports networks will carry 22 Pac-12 men's basketball games that will air simultaneously, thus creating a national window. From the league's postseason tournament, Fox and/or FX will carry one quarterfinal, one semifinal and the men's basketball championship game every other year, tipping off in 2014 through 2024.
Fox Sports also has the rights to sell a presenting sponsorship package to the Pac-12 football and Pac-12 men's basketball championship games that it broadcasts.
Over the past 17 months, FSMG has been busy. In addition to the Pac 12 play and FX's gambits, Fox has become the official broadcast partner of the Big Ten Football Championship Game from 2011-16, kicking off with the inaugural contest on Dec. 3 from Lucas Oil Stadium in Indianapolis; secured the rights to the first Pac 12 football championship game in 2011 (prior to the new deal); and reached a multiyear agreement for national TV rights with Conference USA for football, basketball and Olympic sports.
For its part, ESPN jumps onto the conference's basketball court for the first time under the new deal, with an array of regular-season men's contests, plus tournament and championship games matchups every other year.
On the gridiron, ESPN will add two games per season, lifting its total to 22. The pact provides for a new 10:30 p.m. (ET)/7:30 p.m. (PT) window on Saturdays, as well as the added exposure afforded by less-cluttered windows on Thursday and Friday nights.
For the first time, the worldwide leader gains access to the conference's women's basketball and Olympic sports, which are slated to air extensively on ESPNU.
All told, the Pac-12 content will be featured across ESPN, ABC, ESPN2 and ESPNU. The agreement also affords rights to distribute Pac-12 action on ESPN 3D, ESPN International, ESPN GamePlan, ESPN Full Court, ESPN Goal Line, ESPN Buzzer Beater, ESPN3.com, ESPN Classic and ESPN Deportes, not to mention coverage on ESPN.com.
Playing in the authenticated, TV Everywhere world, all Pac-12 programming on ESPN, ESPN2, ESPNU, ESPN Goal Line and ESPN Buzzer Beater will be available online via ESPNnetworks.com and on mobile devices via the Watch ESPN app to fans who receive their video subscription through an affiliated provider.
Bevilacqua said ESPN has digital rights for the game/events it has access to, but not other contests, something he said was "seminal" to the establishment of Pac-12 Enterprises.
"There's always a tension between scarcity of rights, which drives up price, and ubiquitous exposure," he said. "If you want to fully exploit those rights, you do it yourself."