Pac-12 Networks confident, even without DirecTV

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

  1. nvsundevil

    nvsundevil Member

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    I totally agree with you..............most Pac 12 games could be viewed on tv prior to Larry Scott's big idea of creating a network.....Dish was quick to bite, which created animosity. Scott's campaign to "switch to Dish" didn't help the situation....think he was grasping at straw to meet the quotas.

    In the article "Pac-12 leads leagues in revenues; Larry Scott top-paid college commissioner by Steve Berkowitz, USA TODAY Sports 8:23 p.m. EDT May 21, 2015", the figures given are astronomical with payroll expenses doubling and network expenses tripling since 2011-12 as shown in comparison with the Big Ten. And Scott is crying for more money for the schools...............maybe an overhaul of compensation paid out should be done!

    Prior to AT&T taking over Directv, Scott referred to them as their "biggest partner"..............now that AT&T/DTV have turned the tables on him, will he once again start the "switch campaign"; AND, how will this affect the negotiations when the Uverse agreement comes up again?
     
  2. NustyRails

    NustyRails New Member

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    For the past couple years Wilner has been an advocate of getting any possible deal with DTV. He's become a critic Scott and blamed him for the failure. This report of negotiation collapse is the first recent post supporting the P12N's position, perhaps because it wasn't Scott or the network who said no thanks. It was the presidents and chancellors (I think Scott may have been in China the last week). "More on Pac12/ATT: CEO vote wasn't close; "very bad deal" for league, per industry source; impact on sub fees worse than equity component".

    If an equity deal were to be made I'd expect it to be with ESPN or Fox - probably Fox as espn's SECN and LHN are both 100% company owned...basically a T3 media rights deal that includes a dedicated channel, with payment guarantee (like T1 contract) and profit sharing. Fox and B1G co own the BTN, at least until 2032 because Fox exercised an option to extend after five years. That might be a model the PAC could emulate, but they also like the flexibility being independent provides during a time where methods of delivery and consumption of sports/entertainment seem to be in potentially significant change. Who knows what the landscape will hold in ten years? The Clipper owner just turned down 60M/year from Fox and is looking into direct streaming to customers/fans.
     
  3. slice1900

    slice1900 Well-Known Member

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    I thought SECN was 50/50 split between ESPN and the SEC? I know BTN is 51% Fox (used to be 49% but they exercised an option to buy 2% more) and 49% B1G.

    While you're right that ideally they'd partner with one of those two, the problem is it doesn't do anything to help them get on Directv. Directv just finished their negotiations with Disney last year, they won't need to revisit that until early next decade, so there would no leverage to get Pac 12 on Directv. Fox is probably a similar story, though I really have no idea when Fox properties come up for renegotiation on Directv, if it is sooner it could help sooner, but again would do nothing to get them on now.
     
  4. KyL416

    KyL416 Hall Of Fame

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    Fox was earlier this year and resulted in us getting access to their apps, HD On Demand content, Fox Deportes HD, and probably some other HD channels down the line when D15 is ready.
     
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  5. NustyRails

    NustyRails New Member

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    SEC schools had/have to upgrade their facilities Internet/broadcast capabilities per ESPN requirements. LSU spent over 3M, and they were ahead of most having already upgraded a number of facilities. That is their equity stake, their own facilities. I'm not saying it's not a great arrangement, but I don't think of the SECN or LHN as a conference's network so much as espn's channel that shows the SEC or UT.
     
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  6. slice1900

    slice1900 Well-Known Member

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    Interesting, so between the three conference networks we have one that is solely owned/operated by the conference, one that is solely owned/operated by a major broadcaster, and one that is roughly a 50/50 joint venture. Given the struggles Pac 12 has had getting coverage (not just with Directv) versus SECN's near universal coverage within a few weeks of launch, the differences in negotiating power between those two strategies is pretty clear.

    Anyone know how many paying subscribers LHN is able to claim? It may have nearly as many as the Pac 12! Not saying it makes more money of course, since it is a single school's third tier rights that amount to only one football and a handful of basketball games a year.

    I wonder which model the ACC will folllow when they launch their conference network? Something tells me it will not be 100% owned and operated by the conference :)
     
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  7. NustyRails

    NustyRails New Member

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    LHN around 7M actual subs in state. Out of state...who cares. They are paying .02/mo.
    http://www.foxsports.com/college-football/outkick-the-coverage/the-longhorn-network-is-all-hat-no-cattle-051115
     
  8. NustyRails

    NustyRails New Member

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    An ACCN actually conference owned is not possible as ESPN (and I believe Raycomm to a limited extent) control all their rights, and for a long time. Three or four years ago ESPN committed to exploring the possibility, and promised to pay each school 2M if it didn't happen... They're still exploring...
     
  9. bnwrx

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  10. APB101

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  11. NustyRails

    NustyRails New Member

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    The PAC presidents and chancellors unanimously turn down the ATT/DTV offer, and that is the commisioner's (their employee) fault?

    Looks like the bet was the PAC was desperate. Appearently not. They would prefer to have wider carriage. But they are suplimented by the P12N, not dependent on it. It did generate over 106M in FY '14 and they have 100% equity. You wouldn't give away ownership in your house or business for an increase in discretionary income, would you?
     
  12. slice1900

    slice1900 Well-Known Member

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    If they are only distributing $1 million to each school, that $106 million is revenue, not profit, and their costs are eating up ~90% of their revenue.


    As to whether you'd give away ownership in your business for an increase in income, watch Shark Tank sometime. That's exactly what they're doing. I have a product that I'm making $300K in revenue and $50K in profit on. In exchange for 50% equity, the shark has connections that would allow me to expand my market nationwide so I can expect 10x the revenue and (at least) 10x the profit. Would I give up 50% ownership in something that makes $50K to get half share of something that makes $500K? Hell yes!

    If they Pac 12 gives up some ownership they also give up an equal percentage of the operational cost, and the Directv carriage is pretty much all profit since production costs don't increase when you add viewership. If the Pac 12 presidents turned down the deal then they either want to keep 100% equity, or they didn't like what Directv was proposing. We don't know what was proposed so there's no way of knowing whether Directv was proposing something completely unreasonable, or it was a good deal but the Pac 12 wants to keep 100% equity for their own reasons (could be as simple as pride - selling off some equity is basically admitting "our decision to try to go it alone was a failure")

    I think the equity proposal probably wasn't so much that Directv cares to own part of the network, but as a way around the "most favored nation" clauses that would lower their revenue from other networks because Directv doesn't want to pay what Dish is paying, when Dish is getting all that advertising thrown in as part of their deal which Directv wouldn't get - effectively meaning that Pac 12 is asking Directv to pay more than Dish, which they won't do. Since they are bigger, they're used to paying lower rates than everyone else, not more.
     
  13. APB101

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    This is AT&T's DirecTV; not DirecTV.

    Pac-12 Network thought it had it made with AT&T. (It's been on U-verse since 2013, one year after Pac-12 Network programming had launched.)

    There is no arguing against the fact that a pre-AT&T's DirecTV didn't lose mass numbers of subscribers over not carrying Pac-12 Network in 2012, 2013, 2014. And, so, it's obvious Pac-12 Network isn't a player like Big Ten Network and SEC Network are.

    I think, between these two parties, AT&T's DirecTV has the most power. It now has 20-plus million subscribers, in addition to the 5-plus million with U-verse, and can go ahead and say no to Pac-12 Network. (I'm referring to not just now, in September 2015, but when the current contract with U-verse is ready to expire.)

    The situation partially reminds me of what went on for five years with Crown Media's Hallmark Channel brands not having been on U-verse from September 1, 2010 to July 22, 2015. It's not the same situation. But the subscription accounts, the potential loss of eyeballs and so on, are there. That's why Crown Media bended and reached agreement with AT&T's U-verse to return to its lineup on July 23, 2015, one day prior to the FCC formally approving AT&T's purchase of DIRECTV.
     
  14. inkahauts

    inkahauts Well-Known Member

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    I love again all the speculation but how do we actually know the chancellors said or voted on anything? And what it was they actually voted on. Still all pac12s fault though.
     
  15. APB101

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    Commissioner Larry Scott was thrilled that AT&T acquired DirecTV—and, well, we know the outcome thus far.




    Sent from my iPhone using Tapatalk
     
  16. Go Beavs

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  17. dstorm

    dstorm AllStar

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    Very interesting - it appears the whole equity piece of the equation was removed from the table and the reporting out there that said otherwise was premature.

    Trying to sort through everything I'm summarizing it like this:

    1 - Pac 12 networks screwed up big time by giving favored nation clause to early adopters including Dish
    2 - Directv is not willing to pay those higher rates to Pac12 Network (I wouldn't either with a much larger subscriber base).

    So now Pac12 is stuck.

    I would love to have the Pac12 network but I'm not switching. Next few years will be very interesting in terms of how these league sports rights and league networks play out when up for renewal.

    Huge disappointment
     
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  18. inkahauts

    inkahauts Well-Known Member

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    Like I said we are all speculating on information and we have no idea if it's even close to accurate.

    Bottom line it's not on and I still blame it fully on the pac12.... Id bet it's still all about out of market pricing. There is a reason that very few cable systems have it on their networks out of market after all.
     
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  19. slice1900

    slice1900 Well-Known Member

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    Yes, one minute equity is a major part of the deal that was refused, now it was off the table. He sure changed his story quickly there. He's putting down some pretty specific figures of what Directv/AT&T is offering, but where's he getting that info? A very small number of people would have access to the financials, and they know they could lose their job if they share that information.

    I just don't buy his story at all, because it appeared they were pretty close to a deal a few weeks back when the test channel went up. Why else put up the test channel if Directv didn't think a deal was imminent? If they were so close to a deal then, how could his story about the terrible offer being made by Directv/AT&T and refused by the Pac 12 schools be true? Are we expected to believe that Pac 12 was close to accepting such a bad deal, or that Directv/AT&T walked back from a better deal and are only offering this now?

    No point in quoting or linking articles that don't have direct quotes from Pac 12 leadership or Directv/AT&T leadership. Everything else is just trusting that some random journalist or blogger knows something, when there is zero evidence they do.
     

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