It's pretty clear that DirectTV is a bit of a ways from coming to the table with the Pac-12 Networks. Larry Scott seems willing to wait and play the long game. Michael Lev has more.
Commissioner Larry Scott continues to take a long-term view regarding the Pac-12 Networks’ carriage dispute with DirecTV.
“I like our model. I think we’re going to be looking back a few years from now, and people will wonder how we got full distribution and still were able to maintain ownership ourselves.”
A lot of that has to do with the way the conference network is set up. The Pac-12 Networks is 100% owned by the conference and its schools, whereas the Big Ten Network shares partnership with FOX Sports and the SEC has to share ownership with ESPN. The leverage from those big players made it easier for those conferences to reach widespread distribution in a short period of time, as ESPN and FOX definitely would work hard to make sure properties they own reach the air sooner than later.
So while revenue is split between the television networks and those particular conferences, the Pac-12 gets all the money they earned back from the network. It's part of the reason that Scott isn't in any hurry to get widespread distribution. His conference is raking in cash.
That money has gone immediately into much-needed athletic facility upgrades and improved coaching hires. The Pac-12 is now clearly second in the pecking order of college football conferences, and the war chests of each school in the conference should ensure that they are able to get the pick of the litter for much of the next decade.
Now, it's clear that this has its downsides. Without distribution, it remains very difficult for many fans outside the West Coast to view all the good Pac-12 football there is to offer. However, due to the huge ESPN/FOX deal that Scott originally signed, the majority of the best games the Pac-12 will be involved in this season will be carried on national networks, so that somewhat lessens the problems the conference faces. The Pac-12 gets the national distribution it wants while their netwok.
Moreover, with the network now seeding in money, it won't be long before the Pac-12 will have the upper-hand in a Power 5 world. If you're wondering why Larry Scott is pushing hard for the big five conferences to split away from college football and form their own Division IV, it's because he knows that every national cable and satellite provider would have to come to the table and deal with the Pac-12 once the conference negotiates its next TV contract.
While that's still a decade away (although I can imagine a renegotiating somewhere during the lifetime of the current contract if the TV revenue keeps on expanding at its current rate), by then the fully profitable Pac-12 Networks will be poised to take a much LARGER chunk of their TV rights away from ESPN and FOX and have better selection of premier games like a Michigan State-Oregon or USC-Stanford.
This model is very similar to how professional sports leagues like the NFL, MLB and NBA have approached their TV deals; in each subsequent renegotiation, the networks of those sporting leagues have taken a greater chunk of the TV rights and collected more of the profit for themselves.
Additionally, in a Power 5 world, if big schools only played big schools in non-conference matchups (as opposed to the FCS-FBS special that lights up the conference for the first few weeks of the season), then the Pac-12 Network would certainly get some of those games, and it's highly unlikely that DirecTV could withstand the pressure of trying to blackout big power conference matchups.
And the potential revenue that could come from a wholly independent conference network in that structure (compared to even the SEC and B1G Networks) would be enormous. There are many avenues for the Pac-12 to fully benefit from this structure compared to the other big conferences, and could eventually reattract the interest of schools like Texas and Oklahoma for further expansion.
This next era of college football might take time to shape, but you can see why Scott is pushing for it as quickly as he can.