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Pac-12 lands blockbuster media rights deal

Raining Money

Move over SEC and Big Ten, and make some room at the big boy television rights table.  You’ve got some additional — and well-heeled — company.

Following up on reports that Pac-12 commissioner Larry Scott (pictured, right) (not really) was hoping to land a deal in the very affluent neighborhood of $225-$250 million a year, the Sports Business Journal is reporting that the newly-expanded conference has done just that.

According to the publication, and citing multiple unnamed sources, the Pac-12 has agreed to a media rights deal with ESPN and Fox that is worth more than $2.7B over 12 years.  That averages out to $225 million annually, more than triple what the conference’s current deal with the same broadcast entities paid out.

And, in the interest of full disclosure, Comcast/NBC Universal pulled out of the bidding last week for the rights package to the conference, the SBD reports.

ESPN, the website writes, has committed to carrying an unknown number of football games in primetime on ABC, while FOX will air games in primetime on both their broadcast channels and cable channel F/X.  ESPN and FOX will rotate the televising of the conference’s newly-minted championship game.

The Pac-12′s new deal trumps that of the Big Ten (estimated $212 annually in their deals with ESPN, CBS and the Big Ten Network) and SEC ($205 million, ESPN and CBS), and involves not only football, but basketball and Olympic sports as well.  It should also be noted that, when the current deals of the SEC and Big Ten expire in the future and are open for bidding, they will likely blow the Pac-12′s new landmark deal out of the water.

Regardless of how long this new deal remains the collegiate benchmark, though, kudos to Commissioner Scott and his team for what they’ve accomplished over the past several months and in wringing every last dollar out of a pair of networks.  Excellent, excellent work Mr. Scott.  You’re bosses should be proud.  And ready to give you a well-deserved raise.

UPDATED 10:28 a.m. ET: After Jon Wilner of the San Jose Mercury News noted on Twitter that the schools in the Pac-12 would average $18.75 million annually under the new deal, Kyle Veazey of the Jackson Clarion-Ledger noted back that each SEC school pulled in $18.3 million in 2009-2010.

UPDATED 11:39 a.m. ET: The New York Times is reporting that the actual numbers on the new Pac-12 deal are even more astounding than initially reported.  According to the Times, the conference will receive $250 million annually, more than quadruple their previous revenue from the same media stream.  Using the Times‘ set of numbers, each individual school would receive roughly $21 million annually.

In addition to the agreements reached with FOX and ESPN, the Pac-12 will also create its own television network.  Unlike the Big Ten Network, however, the Pac-12′s network will be wholly owned by the conference.  The downside of that arrangement is all of the risk, including start-up costs from scratch, falls squarely on the conference.  The upside, however, is that all of the profit will tumble directly into the conference’s coffers.

The Pac-12 is expected to officially announce the new deals, which will go into effect for the 2012-2013 school year, Wednesday.

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16 Responses to “Pac-12 lands blockbuster media rights deal”
  1. parkcityute says: May 3, 2011 10:30 AM

    The money continues to roll in for the conferences and universities but the players get a few dimes for laundry and that is about it. With all this new money, stadiums will get bigger, salaries for coaches will get bigger, indoor practice facilities will get more grand, etc. But somehow, somewhere, someone should take note that those generating the funds need a few hundred dollars a month for incidentals. They used to say that they could not afford to do that. With the new income streams they can certainly afford it.

  2. WingT says: May 3, 2011 10:33 AM

    This is truly great for college football. Keep driving the revenues up ESPN, everybody benefits.

  3. huskerguy says: May 3, 2011 11:17 AM

    Next up… complete pay-per-view for ANY football game.

    Lushes…

  4. centexhorn says: May 3, 2011 1:43 PM

    Do Colorado and Utah really add that much value? I think these gargantuan numbers reflect Disney’s desperation over not losing broadcast rights to NBC/Comcast or Fox than any value that those two schools bring.

  5. cappa662 says: May 3, 2011 2:16 PM

    And I thought they cared about the education of the players.

  6. joerevs300 says: May 3, 2011 2:26 PM

    People are only going to pay what the market will bear. If they thought no one would tune in and watch, they wouldn’t be spending 250 million annually for the rights.

    To answer the one question, NO, Utah and Colorado don’t add much.

    And yes, in a roundabout way, it CAN help education. In case you haven’t noticed, states have been cutting funding to colleges for years, which forces them to raise tuition on the students and cut staff/increase class sizes.

    What’s the #1 way right now for a college to make money? That’s right, College Football. So why WOULDN’T the commissioner of a conference look for ways to increase revenue in the conference? I’d dare say he isn’t doing his job worth a snot if he doesn’t.

    Is this to say many universities don’t waste money? Of course not.

    But with budgets tightening and the majority of states in a budget deficit, colleges have to do something.

    And this is just one way to accomplish that.

    For John: If the Pac 12 gets $250 what does the SEC get? 500M annually? You would HAVE to think it would be huge…

  7. John Taylor says: May 3, 2011 2:54 PM

    @joerevs300: in this market, if the SEC’s media rights were open for bidding? Don’t know if they’d get $500 million annually, but it would be significantly more than what the Pac-12 received. I would have to think, though, given the fact that the SEC’s deal was for 17 years — I think it was 17; somewhere in that neighborhood — there would have to be a provision in the contract that permits them to “revisit” if it falls below “market value”. Just a guess there, though.

  8. edgy has an obsession with buckeyeboy being a young girl says: May 3, 2011 3:54 PM

    is this joerevs300′s first rodeo

    how can you consciously say that college football is the #1 money maker for a university? there are only a handful of schools in which the athletic department is self sufficient, OSU being one of them.

    dont kid yourself that football generates that much money when 55,000 students are paying roughly $12,000 a year for education resulting in $660 million circulating from tuition and housing payments.

    there is far more money in education and research funding than there is in athletics.

  9. severs28 says: May 3, 2011 4:35 PM

    The hilarious part is that no one east of Texas watches any Pac-10…er 12 football anyway. So really they are paying out a record amount of money for a conference that the eastern part of the US (where most everyone is) doesn’t even care about. No wonder ESPN keeps going downhill.

  10. edgy says: May 3, 2011 5:17 PM

    One thing about the deal, John, is that it doesn’t keep them from starting their own network, which would mean that they would still be able to get quite a bit of money on top of this deal while the Big 10 already has its network and only the SEC could really BLOW them alway because they still could create a network that would be able to add a lot more revenue to their coffers.

  11. edgy says: May 3, 2011 5:27 PM

    severs28 says:

    ***************

    Sigh. Apparently, you don’t keep up with demographics because the shift has been to the South and the — wait for it — WEST. Whether they watch them in New York doesn’t matter when they’ve got a big enough market out West that’s getting bigger, even as you’re reading this.

  12. mrcowpatty says: May 3, 2011 7:26 PM

    I think I just heard Boise State and BYU say “SHIT”.

  13. phelbin says: May 3, 2011 8:12 PM

    The SEC currently gets $205 million per year, and the Big Ten $220 million.

    ESPN hasn’t ever really cared about anything west of the Mississippi…that’s nothing new. But 7 of the top 25 TV markets in the US are Pac-12 cities. And 8 of 12 schools are in those major markets. That means ratings.

  14. frug says: May 4, 2011 1:12 AM

    @John Taylor

    If there’s no renegotiation clause then we maybe looking at a situation where the SEC starts to threaten further expansion. If the CBS would gladly pay more if the SEC could real in a couple more “national” programs. Alternately, and perhaps more likely, ESPN would probably pony up the cash necessary to prevent the SEC from expanded since the network seems to like the status quo.

    The other option would be to start an SEC network but given how much content is owned by ESPN and CBS and how relatively unpopular MMB (where most of the revenue comes from in conference networks) is in SEC country outside of Kentucky and perhaps Arkansas and Florida, that may not be enough to catch up to the new megadeals.

  15. duanethomas says: May 4, 2011 8:45 AM

    Big Deal. The SEC will dwarf all deals when their deal is up, so will the Big 10. Everyone knows whats the best football conference in the nation and its not the Pac 12.

  16. edgy says: May 5, 2011 3:00 PM

    The more I see about the Pac-12′s TV deal, the more I love it. They did one very good thing and that’s get all their games on TV so that they can overcome what Eastern teams have used against them in the past: the lack of coverage of their games back East. No longer can they use the “Your parents won’t get to see you play on TV” excuse and that could be a big boost in recruiting. The conference already has a very good recruiting base and it could get even better.

    Oh and why is it that people seem to want to downplay the contributions of Colorado and Utah to this deal? Seriously, have any of their critics ever looked at a map or checked out demographics or mean statistical areas or Nielsen markets? Their biggest critics are basically ignorant of all these factors and don’t have a clue as to why they were just as important as the Northern part of the Pac-12 when it came to this TV deal.

    Also, a wild idea and a very long shot: team up with BYU and put Pac-12 games and other events on their network. BYU already has the infrastructure and it would help both because BYU could work out some games with the conference and the Pac-12 doesn’t have to put out as much money right away on building their new network.

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