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Pac-12 Networks confident, even without DirecTV

Discussion in 'DIRECTV Programming' started by Athlon646464, Jun 29, 2013.

  1. Aug 17, 2013 #561 of 2940
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    Yep, they are a lean mean Pac-12 free machine. :)
     
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  2. Aug 17, 2013 #562 of 2940
    carlsbad_bolt_fan

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    Because the deal offered by the Pac 12 sucks. Haven't you been paying attention?
     
  3. Aug 17, 2013 #563 of 2940
    James Long

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    It depends on what the deal with the other carriers says. "Most Favored Nation" clauses are common with the large carriers ... PAC-12 would agree not to give any other carrier a better deal than the ones they have an MFN deal with. Which means if DISH and the major cable companies have an agreement for $100 per subscriber, PAC-12 cannot offer DirecTV carriage for $99 per subscriber without affecting their other deals.

    MFN clauses are good for early adopting carriers. Say Comcast negotiated $100 per subscriber with an MFN and then DISH came by later and negotiated a $75 per subscriber contract. Comcast's price would drop. Comcast would save money based on DISH's negotiation!

    The down side is that the channel has to weigh the value of adding more subscribers and the new carrier against the money lost when the carriers that already accepted a deal get to pay less. The channel may be better off sticking with the MFN price and missing a carrier than lowering their price to all carriers.

    * The numbers in the above examples are intentionally high to avoid anyone quoting them later as the actual per subscriber fee being requested by PAC-12 or paid by carriers. They are intended for illustrative purposes. *

    I would not hold Fox up as a good example. The reports we're seeing is that Fox got walked on. They had a 23c and a 20c channel (Speed and Fuel TV) and they wanted 80c now and $1.50 later for the 23c channel. They ended up getting 23c for their 23c channel. If spending money to improve your content (pulling "the best" content from three channels over to one channel plus additional content) and NOT raising the price is "good negotiating" then one needs a better dictionary. Especially since they asked for 80c/$1.50.

    Fox's move would have been much more wise if it was their original offer ... improve the content and raise the price when the content proves to be worthy of a higher price. Build an actual viewer base then threaten to take the channel away. But the way it turned out Fox had to accept the carrier's terms.

    If PAC-12 negotiated the same way FS1 negotiated they would have carriage but they would lose money.
     
  4. Aug 17, 2013 #564 of 2940
    SomeRandomIdiot

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    Went back and looked at Q2 report and it is indeed Q1 to Q2 and not Year to Year, as most other Companies report on because of seasonality (for example, subs normally fall in the Summer and rise in the Fall).

    But regardless, even more proof the lack of PAC 12 is not an issue for DirecTV subs as others have seen the beginning effects of Cord Cutting who are trying OTT.
     
  5. Aug 17, 2013 #565 of 2940
    Bambler

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    Yeah, it's obvious that the market is saturated and overall customers is shrinking. Cord cutting? I know people panic at the thought, but I'm sure the majority of people, such as myself, will continue to patronize cable/satellite no matter what.

    The only way to grow is to steal customers away and ironically the only way to do that is to have content your competition doesn't have, which ultimately raises prices. They are their own worse enemy.
     
  6. Aug 17, 2013 #566 of 2940
    john262

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    Why would they lose money? They aren't paying their college athletes anything so what do they need all of that money for? To subsidize other expenses at their universities? I doubt it. Tuition costs have been skyrocketing at several times the rate of inflation so they are already taking in a lot of money. Somebody is making a bundle off from this but it's not the college athletes without whom there would be no college sports.

    On the other hand, pro leagues have multimillion dollar payrolls so I can understand why they charge a lot for the rights to their games.
     
  7. Aug 17, 2013 #567 of 2940
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    That is two entirely different questions. They would lose money giving up the higher rate other providers have agreed to (MFN requiring them to match the newer contract on old contract). Perhaps a lower rate for more overall viewers might lead to more money - but look at the level of media buzz PAC-12 gets for not being on DirecTV. People are talking about the network. That is a good thing.

    Why do they need money? To pay the universities and production costs for the programming they create (not only the game coverage but the other content). And yes, someone is making a profit.

    What is wrong with investors making a profit? Take away the profit and the games would be covered with the quality of CSPAN and PBS. Limited cameras and limited production. The competition to provide better coverage of events and sports has caused competing broadcasters to be innovative. They can make money so they fight to be better so they can get the contracts.
     
  8. Aug 17, 2013 #568 of 2940
    Laxguy

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    No, they wouldn't lose money. They might not make as much by agreeing to be carried by DIRECTV® in a separate pack and triggering MFN lowering of other distributor's payments to PAC-12. OTOH, they might make more by accepting a DIRECTV deal while triggering MFN provisions. We'd need details to confirm which is true, details on one is going to disclose.

    Either way, it seems PAC-12 is more about the money than it is about increased exposure for their athletes, minor sports and getting more fans accessibility.
     
  9. Aug 17, 2013 #569 of 2940
    James Long

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    There is a balance. Perhaps you have mistaken PAC-12 network as a non-profit organization or a charity? They are a for profit business. That means try to make money.

    Nearly any channel can get carriage by not charging for carriage. The trick is to charge a rate that carriers will pay and not undercut the profit.
     
  10. Aug 17, 2013 #570 of 2940
    WebTraveler

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    With football season less than 2 weeks away the real determination for all of this is the current quarter ending 9/30. We'll need to see how many close their accounts for football season. I know my one remaining immediate neighbor with Directv just had the Comcast truck there this morning. Here in Oregon Directv won't give us the Blazers channel nor the Pac 12, so we're a completely forgotten market to them. We are small potatoes, but their market penetration here is sinking because of it. But in the end Directv doesn't care since we're such a small market to them.
     
  11. Aug 17, 2013 #571 of 2940
    sigma1914

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    My neighbor dropped Time Warner yesterday for DirecTV, so it's even. lol
     
  12. Aug 17, 2013 #572 of 2940
    Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Of course Larry Scott wants to show as much income from his machinations as possible. But he's also crying that DIRECTV® is preventing its subs from being able to watch, when it's an impasse and they're as much to blame.

    And aren't the august institutions of the PAC-12 marching to a different drummer than the NFL, ESPN and other corporate entities? lsn't there a higher calling? Don't answer that; it's a rhetorical Q.! ")
     
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  13. Aug 17, 2013 #573 of 2940
    sdk009

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    I would think that L Scott could increase ad rates if he had the maximum number of subs able to receive the channel, and that could offset the lowering of the carriage fee per sub if he had to give back some $$$ due to MFN clauses.
     
  14. Aug 17, 2013 #574 of 2940
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    Would you have the same opinion if your carrier had PAC-12 and another carrier was the one still seeking a better rate? Or would you be telling the other carrier to buck up, put up the money and get the channel at the price others have paid?

    That is the trouble with all carriage issues. They are personal. Everyone wants their choice of carrier to have every channel they want without overcharging the subscriber. That is not as easy as making a post on an Internet forum. :)

    Getting back to FS 1 ... it looks like they were not able to play hardball with the addition of their channel thanks to the promises they made to their advertisers and the top three carriers standing together to say NO to their rate increase. Hopefully as renewals come up carriers do not lose the channel.
     
  15. Aug 17, 2013 #575 of 2940
    Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    I wouldn't be telling the other carrier to do anything; I don't think my opinion would change. I'd like to have PAC-12, but only for a couple of games.
     
  16. Aug 17, 2013 #576 of 2940
    john262

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    The Pac-12 network is fully owned by the Pac-12 Conference itself and it has no other investors. The institutions that make up the Pac-12 are not for profit public institutions with the exception of Southern California and Stanford. If the Pac-12 Network is a for profit business I would like to know who gets to keep that profit. It is unseemly to use unpaid amateur athletes in a for profit venture. Of course they need to recoup production costs but it seems that they are holding out of all of the money they can get. That's immoral and it's just wrong. This is supposed to be all about amateur student athletes, not enriching some fat cats.
     
  17. Aug 17, 2013 #577 of 2940
    acostapimps

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    First of all these are new channels and didnt even knew of how well would it live up to its promotion, since no one knows in reality of actual content not just the hype, It's like try it before you buy it. But sooner or later Fox would want to negotiate which they should do anyway but for what they originally ask for.
     
  18. Aug 18, 2013 #578 of 2940
    Joe Tylman

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    I cannot recall a time in my life when college sports were not about money. This was 5 years ago but http://espn.go.com/ncaa/revenue paints a basic story of "non profit" college systems. It's not hard to put that money into other things like salaries, scholarships, and expenses. The PAC 12 is a for profit business. The profits will be divided however the schools contracts are setup. The schools will allocate the funds in whatever manner necessary to balance out a budget sheet to show they didn't make a profit off of it.

    If it was a for profit business we wouldn't have the issues about channels and carriage agreements.
     
  19. Aug 18, 2013 #579 of 2940
    john262

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    I was originally replying to the other poster who said that the Pac-12 networks cannot agree to a contract with Directv that pays less than they are demanding because "they would lose money."

    Of course they really are a profit making enterprise that hides its profits and the athletes are getting screwed. But given that they are not supposed to be that way and what they are doing is wrong then if I were Directv I would not shed any tears over refusing to offer them a lucrative contract so that they can make even more money while all the while their athletes don't share in the bounty. And we Directv subscribers should be supporting Directv in this even if it means that we occasionally miss a game that we might want to watch. After all the whole major college football thing is a scam.
     
  20. Aug 18, 2013 #580 of 2940
    Bambler

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    All college athletes are treated in the same manner, unfortunately, from all conferences. It's not just the Pac-12.

    If what you believe is true, you should probably ditch DirecTV because they are subsidizing the same thing you mentioned with the Big 10 conference. In fact, DirecTV was an early adopter of the network and probably fueled the fire of college tv conferences. Ironic, huh?
     

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