Memo to Kliavkoff: WTF?
Less than a week, after Colorado decided to leave the Pac-12 to the Big XII, Pac-12 commissioner George Kliavkoff decided to reveal to the Pac-12 CEO Group the details of the proposed media rights deal he would like the conference to execute.
The exact figures haven’t been officially released but we have seen some interesting details float out and if these details are true, I don’t feel it positions the league for the long term.
What we know are the following tidbits:
- Pac-12 Media Rights deal will be a streaming-first deal with AppleTV.
- The deal is structured to escalate by the number of subscribers to AppleTV.
- Much like the deal AppleTV has with MLS, it won’t be exclusive to AppleTV and could allow networks like FOX or ESPN still have Pac-12 After Dark action.
- We don’t know how AppleTV would provision the Pac-12 package, if it is bundled in with AppleTV, or if it is an add-on. If it is an add-on what does that cost look like?
- It seems Amazon is now out of the Pac-12 Media Right deal.
If the conference decides to go this route, it will be the first conference to go away from the linear television or media rights route.
This would impact the potential expansion targets SMU and San Diego State significantly. Their most valuable assets to the expansion puzzle is the markets they are in. There is no denying that in a traditional linear television media rights deal, markets like Dallas-Fort Worth and San Diego help increase the value of the contract.
In a streaming deal, those markets mean very little. The upside is your audience isn’t solely based in your home market, it is anyone looking to subscribe.
Nov 26, 2022; San Diego, California, USA; A detailed view of an end zone pylon with the San Diego State Aztecs and Mountain West logo during the second half against the Air Force Falcons at Snapdragon Stadium.
Mandatory Credit: Orlando Ramirez-USA TODAY Sports
So, how many San Diego State and SMU subscribers exist outside these markets, and even within their home markets, how many of them are subscribers?
Another aspect of the deal that frightens me is the mention of the deal escalating based on the number of subscribers.
We don’t know what subscriber numbers AppleTV is looking for to hit the various tiers, but with the Pac-12’s record of late of simply failing to execute, what is the damage to these programs if they don’t hit these numbers?
From what is being reported, the deal would be eerily similar to the figures MLS has with AppleTV, with their deal being for 10 years and $2.5 billion.
With the Pac-9 (since Southern California, UCLA, and Colorado exit after the 2023 season) at their current configuration, that pays out around $27.8 million per school.
In comparison to the other Power 5 conferences
- Big Ten - it is reported that the average payout will be $70 million per school per year and grow to between $80 to $100 million per school
- SEC - $60 million per school by 2025-26 and expected to equal the Big Ten’s deal when their contract expires in 2034
- ACC - $36 million dollars is the expected payout, schools documented this in their annual tax returns in 2021 - their media deal expires in 2036
- Big XII - $31.7 million expected to be paid out for the 12 schools, it is to be determined what Colorado’s value brings to the deal. Their contract expires after the 2030-31 season.
While Kliavkoff’s major selling point has to be the ability to scale in revenue due to subscribers, what faith has the commissioner or the previous one in Larry Scott demonstrated to earn trust from its members?
Colorado was essentially Rutgers to the Pac-12 and they didn’t bat an eye at leaving.
The University of Southern California and UCLA didn’t hesitate either and ran to Chicago.
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Jul 21, 2023; Las Vegas, NV, USA; The Pac-12 Conference logo during Pac-12 Media Day at Resorts World Las Vegas.
Mandatory Credit: Kirby Lee-USA TODAY Sports
Just look at how the conference handled the Pac-12 Network. That was a disaster of epic proportions. However, it wasn’t the fault of those who did amazing coverage and great production. It was the fault of the Pac-12 Conference that didn’t have the proper model necessary to bolster its brand, something the Big Ten and SEC have easily done.
The other crazy part of how badly the Pac-12 has mishandled everything media related was how they overcharged Comcast $50 million in licensing fees between 2012 and 2016 and the conference is still ironing that out.
I don’t trust Kliavkoff and his “brain trust” the ability to achieve this.
Kliavkoff is cut from the same cloth as his predecessor Larry Scott, both of whom are about as sharp as a Fisher Price knife.
Depending on who you ask about the Pac-16 debacle, you could believe in Texas saying they opted out because of “travel,” or because they were going to get paid nearly $300 million for the Longhorn Network by ESPN.
I don’t trust Pac-9 Presidents and Chancellors to get this done either.
They have been extremely stiff in expansion talks. Whether it was for academic reasons, or they felt programs weren’t “Pac-12 caliber,” the conference missed the boat on many schools that would certainly boost their brand today.
The streaming subscriber numbers are scary. It's hard to guarantee what the audience is willing to buy considering the other four Power 5 conferences and Notre Dame are on linear television with streaming options added on.
Streaming is indeed part of the consumer consciousness now, but how far away are we from having individual services have certain pieces of sports content?
If the SEC or Big Ten did this, their brands are powerful enough to be a trendsetter for the industry.
The Pac-12 as a whole, if Southern California, UCLA, and Colorado were on board, I could buy more into the success of a streaming service. I could buy into the scaling initiatives. The problem is they aren’t there.
The conference is approaching, if not already, consumed by, a death spiral. One anonymous conference commissioner asked Pac-12 Insider John Canzano today a serious question, “Do you think Arizona is getting signatures or actually trying to finalize a deal with the Big 12?”
A hybrid deal with a television component would help, but you have to assume the primary games like Stanford vs. Cal and Oregon vs. Washington will be AppleTV exclusive. In this scenario, does a Pac-12 After Dark component on ESPN make sense for either side?
Kliavkoff lives every day like his name might be etched on the Pac-12 tombstone if he doesn’t right the ship.
It was bad enough losing cornerstones of Southern Cal and UCLA. So while losing Colorado isn’t as big a deal, as Dan Lanning clearly noted, it's still another body blow for a conference that is clearly falling apart,
The conference can ill afford a gross misstep. Yet that has been the trend for the conference under Kliavkoff.
My memo to Kliavkoff is WTF - Do you really want to be the guy that killed one of the sport's most prestigious conferences?
