15 Feb 19
The Mercury News
* The Pac-12 Hotline newsletter is published each Monday-Wednesday-Friday during the college sports season (and twice-a-week in the summer). This edition, from Feb. 15, has been made available in archived form …
Yes, Pac-12 Networks are stuck
(And here’s why)
The mid-week publication of the Hotline’s deep dive into the Pac-12 Networks resulted in a packed in-box, jammed Twitter feed and seven radio hits on Thursday alone.
Over and over, regardless of the platform, the same three, interconnected questions surfaced:
What are the options?
Is there any way out?
OK, this is depression; so what’s next?
In short: There are no options — at least no game-changing options for the Pac-12 Networks — because of existing contracts.
Here’s an attempt to answer the questions:
• Could the conference sell equity in the Pac-12 Networks to create a structure similar to what the Big Ten has with Fox?
Sure, but that would require an unfathomable about-face from commissioner Larry Scott and the presidents/chancellors, who have banked everything on the long-term benefits of having full ownerrship of the networks.
It would, essentially, render the sacrifices of the past six years a complete waste and undercut potential revenue opportunities in the future.
• Could the conference strike a deal with DirecTV?
Sure, but that would require:
1) A willingness on AT&T’s part to return to the negotiating table after dropping its sponsorship and carriage (U-verse) partnerships with the conference last year, and
2) The Pac-12 accepting a lower subscription price for DirecTV.
Just do it, you say — just do whatever it takes to get on DTV. Here’s the problem: Offering a lower sub fee to DirecTV would contractually obligate Pac-12 to lower its subscription price for all of its partners, devastating the business model and sparking steep fall into the red for the schools.
• Why not make the Pac-12 Networks available for $5 or $10 a month on a Direct-To-Consumer basis through, for instance, Roku?
I’ll step aside and let networks president Mark Shuken answer that one:
“We are obligated to not do (DTC) based on our distribution deals,” Shuken told the Hotline last spring. “Because the model needs to remain the same to protect our other distributors — the model under which the distributor pays us based on the subscriber — going direct-to-consumer on an a la carte basis is not something we’re able to do right now. We’d be undercutting current distributors.”
• So are there any options for the networks before the next cycle of media rights in 2024?
None that I can see, other than on the margins (a streaming deal with Hulu, for example).
• So the conference is stuck?
The Pac-12 Networks are stuck, but the conference isn’t stuck. And it’s exploring the one option available: Create a holding company for its media rights (the content currently on ESPN, Fox and the Pac12Nets) and sell a portion of that company to an investor in exchange for up-front cash.
It’s a creative approach, the only way to generate significant cash before 2024 without having to sell equity in the Pac-12 Networks themselves. The holding company would retain all of the media rights for the 2024 negotiating cycle to create maximum value.
There’s no guarantee the schools will ultimately agree to sell equity, or that the preferred strategic partner will be motivated at the right price. But it’s smart to explore every option given the predicament with the Pac-12 Networks. — Jon Wilner
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Hot off the Hotline
• The first edition of the 2019 QBCQ was published Thursday. If you’re unfamiliar with the periodic Hotline series, the Quarterback Comfort Quotient examines the depth chart at the position for each team. It’s not merely a ranking of the starters; backups are accounted for, as well. Because you never know.
• Previous editions of the newsletter are available in archived form using the following hashtag:
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In the News
(Note: The Hotline newsletter includes links to sites that could require a subscription once the number of free views has been reached.)
• We’ll start with two significant pieces of news from Eugene, where the Ducks have parted ways with defensive coordinator Jim Leavitt (for a paltry $2.5 million). What’s next for coach Mario Cristobal? Possibly an addition to his offensive staff. Meanwhile, the Ducks have added a major target for quarterback Justin Herbert: Juwan Johnson, a high-level receiver for Penn State, is transferring to Oregon.
• Arizona State’s Aashari Crosswell, one of the most promising young defensive backs in the conference, is learning the Tillman position to increase his versatility. (Of all the nicknames given to all the hybrid defensive positions in all the FBS, ‘Tillman’ is the best. By far.)
• A look at Washington’s recruiting class — the best of the Chris Petersen era — broken down by categories, from biggest sleeper to highest drama and more.
• No. 1 on this Hot Seat list for 2019? USC coach Clay Helton, of course. Writes CBS Sports’ Tom Fornelli: “Helton’s time at USC reminds me a lot of the Jim McElwain Era at Florida. The Gators won 19 games in Mac’s first two seasons, as well as two division titles, but they never looked like a team that was the same level as the elite programs of the country.”
• Athlon’s broke down the 2019 rosters across the conference, with an eye to recruiting rankings.
• Oregon State has set its dates for spring practice. So has Washington State. (The Hotline is compiling all the spring start/finish dates and will publish them next week, by the way.)
• Pac-12’s optics were bad and are deteriorating, writes the Seattle Times’ Matt Calkins: “Gaffes such as that are generally what you’d expect from Michael Scott, not Larry.”
• Important news from the NCAA, which is “reviewing” the transfer portal guidelines. Freedom of movement is good, but the system needs a few tweaks.
Select men’s basketball games included (all times Pacific).
Feb. 16: Washington at WSU (5 p.m./ESPNU)
Feb. 16: ASU at Utah (7 p.m./FS1)
Feb. 26: Start of NFL Scouting Combine (NFL Network)
March 13-16: Pac-12 tournament (Las Vegas)
March 17: Selection Sunday
• Entertaining and insightful read from Rivals’ dynamic duo of Mike Farrell and Adam Gorney, who offer up their “Pac-12 superlatives” from the class of ’19. Categories include highest ceiling, future No. 1 pick, Mr. Versatility and Mr. Sandman. Let’s just say two Pacific Northwest schools are well represented.
• We could describe it mathematically: 5 x 5 x 25: Five Pac-12 programs have, over the past five years, averaged top-25 recruiting classes. Here’s the full list of 25, courtesy of CBS Sports’ Chip Patterson, who notes that the Ducks and Huskies are trending up.
• UCLA received a $15 million gift from donor Mo Ostin that will be used to build an on-campus academic center for athletes. The Bruins still need $20 million to complete funding for the project. Ostin, if you’re unfamiliar with the name, was largely responsible for financing the Bruins’ recently-completed basketball facility.
• Not only did Colorado coach Tad Boyle receive an extra year on his contract, he got a bump in base pay to $1.8 million. At that level, his compensation is equal to that of Washington’s Mike Hopkins — at least for now. (Hopkins seems in line for a raise.) Meanwhile, the CU regents approved multi-year deals for the new football assistants.
On the Hardwood
• UCLA “is targeting Tony Bennett,” according to college basketball insider Adam Zagoria. (The Hotline made the case for Bennett six weeks ago.)
• Dana Altman wants to schedule more non-conference home-and-homes series against Power Five opponents. It’s not as easy as it seems, because most programs avoid true road games in favor of neutral-court dates.
• Six consecutive losses for Arizona? Six consecutive losses for Arizona!
• That was only Utah’s second win over Arizona in the Pac-12 era? That was only Utah’s second win over Arizona in the Pac-12 era!
• The Pac-12 is a two-bid league, barely, in the latest projections from CBS’ Jerry Palm.
A section devoted to content on Pac-12 Olympic sports.
• Oregon State’s baseball team begins its national title defense with a surprise. Sorry, not with a surprise. In Surprise.
• Will the cancelled basketball game at Washington impact Arizona State’s postseason? It’s something to monitor.
• More than 20,000 fans are expected to watch the women’s version of the Civil War over the holiday weekend.
• Good overview of the stretch run ‘stakes’ for all 12 teams, from Pac-12 analyst Michelle Smith.
• So very Cal: A lawsuit has been filed by local residents to stop construction of a beach volleyball complex.
What’s coming on the Pac-12 Hotline:
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• Our standard weekend lineup is planned (despite the holiday), with ‘Saturday Night Five’, my AP ballot and Brian Bennett’s weekly column.
• Tentatively scheduled for next week: The Hotline’s spring practice guide, a new podcast, more coverage of conference affairs.
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