On February 2, Pac-12 Commissioner George Kliavkoff appeared on a sports podcast and bluntly explained his strategy for winning a media rights contract, particularly regarding the crucial issue of access to content.
“Whatever deal we make,” he explained, “my goal is to have our content available on every piece of glass connected to the internet. Period, period.”
Kliavkoff has kept an extremely low profile for months during contract negotiations. If you were not aware of the comments on the Navigate sports business podcast, which is completely understandable. The interview took place on February 2, 2022.
His strategy has been hidden in plain sight for 55 weeks, folks.
It was established long before USC and UCLA hunted down the Big Ten, long before the Big 12 renewed its agreement with ESPN and Fox, long before the UC Regents spent months evaluating UCLA’s move and many, many months before the economy softened.
Kliavkoff repeated the mission in September. During a performance onCanzano and Wilner: The Podcast,” he offered, “We really want our content to be available to all of our fans who want to see it. I have set a goal that our content should be available to every piece of glass connected to the internet.”
Five months later, Kliavkoff is under increasing pressure to negotiate a media rights deal acceptable to the 10 remaining schools.
For all the rumors of a streaming-heavy contract — and associated speculation that such a deal would lead to the dissolution of the conference — the details remain a mystery.
Will a significant percentage of Pac-12 men’s football and basketball games be available on traditional linear platforms like ESPN? Is the majority provided by a streaming company like Apple or Amazon? Can every ounce of inventory be streamed?
For all the uncertainty, this much is clear: Kliavkoff’s strategy is a direct result of a decade of frustration over the appalling distribution of the Pac-12 Networks.
Kliavkoff took charge on July 1, 2021 and soon began touring the campuses. At each stop, he talked to athletes and coaches, administrators and executives. A constant complaint: the lack of access to the Pac-12 networks, which weren’t on DirecTV, not in hotels, not in sports bars, and not on many cable systems outside of the conference. (Currently, they have about 14 million subscribers, a paltry amount compared to the Big Ten and SEC networks.)
From there came the strategy: Kliavkoff would make Pac-12 football and basketball content widely available.
He never specified which companies or services would distribute that content, but given the choice of words – “any piece of glass connected to the internet” – we can assume we had streaming in mind.
During his remarks at Pac-12 football media day last July, he noted that the impending distribution deal was “highly likely” to involve a major digital media company.
“We already have significant interest from potential partners,” he said, “including both incumbents and new traditional television and especially digital media partners.”
Was that Amazon or Apple? Was it a reference to ESPN+? Is there another streaming company interested in Pac-12 content whose identity has been kept secret for all these months?
Only an extremely close circle of conference executives knows for sure.
However, we can provide some context about possible results.
Under the current media deal, 28 percent of Pac-12 football games are distributed on Disney platforms (ABC, ESPN, ESPN2, and ESPNU).
We know this because the Pac-12 holds about 80 games each year: 54 regular season conference matchups, the championship game, and about 25 non-conference home games. (That number varies slightly by season, of course.)
ESPN and Fox have licensed 45 of them as co-affiliates: 22 each, with the championship game alternating annually. So in a two-year cycle, ESPN/ABC has 45 out of 160, or 28 percent.
The other 35 games (approximately) – that’s about 44 percent of the total inventory – are distributed by the Pac-12 Networks.
Yes, almost half of the games are on the outlet with the lowest visibility. And not a little.
As broadcast networks, ABC and FOX are in approximately 120 million homes.
ESPN and FS1 reach about 75 million homes.
The Pac-12 networks are in about 14 million.
That’s a great business strategy.
It’s also the source of deep frustration over the Pac-12 footprint… and the basis for Kliavkoff’s goal of making every game available on every internet-connected device.
Throughout the media rights saga, the Hotline has made three basic assumptions:
— The Pac-12 Networks will cease to exist as a media distribution company — they will not broadcast men’s football or basketball games.
— Disney’s linear networks (ABC, ESPN and ESPN2) will broadcast Pac-12 football. How much exactly? Our estimate is about the same percentage of games as in the current agreement.
(Important point: if the Pac-12 doesn’t expand, there will be 13-15 fewer games available.)
— A significant portion of Pac-12 football will be available on a streaming service.
Of course we don’t know which one. Nor do we know the exact number of domestic subscribers for each.
But to give you an idea of the reach of streaming compared to the cable networks (ESPN and FS1) and the Pac-12 networks, we found these estimates online:
Prime Video: 77 million
Paramount (CBS): 56 million
Hulu (Disney): 48 million
AppleTV: 30 million
ESPN+: 25 million
Peacock: 15 million
Even ESPN+ and Apple TV, potential landing sites for Pac-12 content, have about twice as many subscribers as the Pac-12 Networks.
And they are available on every piece of glass connected to the internet.
Our view is that a streaming-only deal could look good in the late stages of the next media contract cycle – essentially the latter years of the 2020s – but it would carry short- and medium-term risks and face resistance of the schools.
The conference needs its major football games to be widely and easily available, and linear platforms provide that access.
(It makes no difference whether the content is licensed directly from the conference or through a sub-licensing agreement with a streaming company.)
In addition, a financial arrangement with ESPN would ensure that the studio’s narrative shows regularly discuss Pac-12 teams, coaches, and players.
We suspect that the media rights process will be resolved next month, but we don’t know how it will play out, particularly with regard to Kliavkoff’s streaming strategy.
The purpose here is simply to explain it.
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