In early June, weeks before the storm hit, the Hotline made a series of calls to veterans of the sports media space to get some insight into the impact of the Big Ten’s ongoing contract talks on the Pac -12.
One pundit suggested the optimal outcome would be for the Big Ten to walk away with “big dollars and few partners.”
The announced departure of USC and UCLA on June 30 only reinforced this view. As it negotiates a media deal that will make or destroy the future of the 107-year-old conference, the Pac-12 needs growing market valuations and eager network partners.
His strategic position apparently improved this week with news, first reported by the Sports Business Journal, that ESPN has been dropped from the Big Ten’s rights package in the contract cycle beginning next summer.
After four decades, ESPN exited the Big Ten broadcast business as Fox, NBC and CBS gobbled up inventory at a combined price that is expected to top $1 billion a year.
Theoretically, the development is a win for the Pac-12:
Its longtime partner ESPN could be pressured into locking down the rights to Power Five football in the western third of the country and, in particular, the valuable 7:30 p.m. PT kick-off window.
But the result falls short of an optimal situation for the Pac-12 for a reason: the remaining competition, or lack thereof.
“ESPN is not a charity,” an industry source said.
Ideally, the Big Ten negotiations would have left behind a second interested party.
With Fox, CBS and NBC sharing an inventory that includes the New York, Chicago and Los Angeles media markets, the networks will have little to no incentive to bid against ESPN for the Pac-12 rights.
Could Turner jump into the fray? Maybe.
“They gave no buy signal,” the source said.
At the moment, we don’t see any serious competition from linear TV networks – and make no mistake: college football remains a linear industry – which will drive up the price and force ESPN to pay tens of millions more. per year than expected.
However, this dynamic is somewhat offset by the chessboard.
– The so-called fourth broadcast window (7:30 p.m. Pacific kickoff) moves the ratings needle and is valuable property for ESPN.
It’s hard to imagine the network ending its coverage of college football before the start of prime time in the Pacific Time Zone, home to seven of the nation’s top 30 media markets.
– The combination of large markets and limited competition has allowed the Pac-12 to generate more high-rated games (2.0 or better) than the Big 12 when all four outgoing schools (Texas, Oklahoma, USC, and UCLA) are removed of the equation.
– The Pac-12 is the only Power 5 conference that can deliver weekly inventory for this late release window – and it can deliver 26 times per season, if desired (every Friday and Saturday night for 13 weeks).
That’s nearly 100 hours of college football programming, with little competition, in a prime time slot.
— The Big 12 is expected to begin media rights negotiations in the summer of 2024, with a contract cycle beginning in the fall of 2025.
We mention the Big 12 play because of the strategic calculation against ESPN.
Even without serious competition from other linear networks, ESPN might have an incentive to offer a deal that helps keep the Pac-12 intact.
If the network comes up with a lowball deal and the conference fractures, the most valuable remaining football programs would likely move to the Big 12.
That leaves open the possibility of Fox going all-in with the Big 12 when negotiations begin in two years and effectively shut ESPN out of college football in the western half of the country.
At the very least, the fierce competition would drive the price far beyond what ESPN hopes to pay to share the rights to a superconference that competes directly (for broadcast windows) with its prized asset, the SEC.
(BYU is the only reconfigured Big 12 member not located in the Eastern and Central time zones.)
The most likely outcome, based on what we know today – and recognizing that the situation is very fluid – is:
ESPN goes all-in with the Pac-12 at a conference-friendly price, locking in the windows of no competition during prime time in the Pacific Time Zone.
The deal could come during the exclusive trading window, if that phase has been extended, or once the Pac-12 takes its rights to the open market.
The deal could come in weeks or months. This could include expansion, with new members taking smaller shares. That could include a load of games on ESPN+. But all the signs point to a partnership.
Finally, we can’t entirely ignore the potential for ESPN to eventually negotiate an alliance or merger of the Pac-12 and Big 12 as a strategic play to minimize Fox’s future access to the western half of the country. (The probability is extremely low, but not zero.)
The Hotline has long believed that conferences are stronger together – we wrote this three years ago.
In combined form, the 22-team (or more) conference would sideline the ACC, provide ESPN with quadruple headers, and compete for multiple spots in a 12- or 16-team playoff.
If desired, the leagues could create a football-only (or football and basketball-only) alliance, allowing them to remain institutionally separate and satisfy Pac-12 presidents concerned with academic, political and cultural.
Whichever way you cut it, however it ended, it’s clear: developments in Big Ten countries have moved the process forward in a (mildly) positive way for the Pac-12.
As a result, we have adjusted the conference’s existential crisis line upwards. Survival is now a 4.5 point favorite over Extinction – the most likely, but hardly certain, end game.
And now, after so much back and forth since June 30, the fourth quarter is about to begin.