Television revenue is the most efficient way for athletic conferences like the Pac-12 to post profits. Growing the Pac-12 Networks is the best way to grow television revenue for the conference, and while much remains to be done for the network to reach its full potential, progress has been made.
Pac-12 Network Grows but Issues Still Linger
Ben Bolch of the LA Times has reported that the Pac-12 has reached an agreement with Cox and Frontier to carry the Pac-12’s network of channels. While the exact value of the deal for the Pac-12 isn’t specified, previous reports have stated that the Pac-12 has been getting $0.80 per subscriber from other carriers.
Pac-12 Commissioner Larry Scott stated that 500,000 new subscribers in southern California, Orange County, Palos Verdes and throughout Arizona would be added, so simple math at the previously reported rate would mean an additional $40,000 in revenue.
There’s good news for the conference beyond the added viewership. An increase in the subscription base of this size means that the Pac-12 will be able to bump up its asking price for ad space on its flagship and six regional networks, especially for advertisers who do business in the markets which have been added.
It may also help the Pac-12 hasten a solution to the obstacles which still remain, in the form of two carriers which still haven’t reached agreements with the conference.
Bringing the holdouts into the fold
The Pac-12 and Directv along with Charter are still at stalemates. Though there was wide speculation that AT&T‘s takeover of Directv would lead to a deal, as AT&T was already a sponsor of the Pac-12, that doesn’t seem to have had any positive effect.
Last September, the Pac-12 walked away from negotiations with AT&T/Directv according to Stephanie Loh of the Seattle Times. The main issue was that AT&T wanted an equity stake in the Pac-12 Networks, and the conference was unwilling to part with any of its sole ownership.
It’s unclear now 10 months later whether both or either side is still at odds on that same point. It’s also unclear which side might flinch first. Will the Pac-12 decide that adding Directv’s customers is worth parting with some equity, or will AT&T cave on its demand for equity under pressure from subscribers? Only time will tell.
As far as Charter goes, negotiations are ongoing, but it’s uncertain whether a deal will be struck in time for the 2016 football season.
The bottom line is that the bottom line for the Pac-12 has grown, but that the potential for much more television revenue still remains unrealized.