Arizona State president Michael Crow: Pac-12 “well positioned” for the future thanks to “unbelievably valuable” Pac-12 Networks
When Pac-12 presidents and chancellors talk, the Hotline listens.
They are the bosses, after all.
One of them talked earlier this week. And it wasn’t just any president. It was a president who occupies a special place in the Pac-12 leadership dynamic.
Arizona State’s Michael Crow was chair of the CEO Group that hired commissioner Larry Scott.
He negotiated Scott’s contract.
He has been Scott’s staunchest supporter over the decade.
Crow sat down with Doug and Wolf from 98.7 FM in Phoenix to discuss a variety of issues. True to form, he painted a rosy picture.
“I think we’re well positioned,” Crow said, “and I am a supporter of Larry’s.”
Crow was asked about the hottest topic of the week: Michigan State plucking Mel Tucker from Colorado for twice the salary.
Tucker, who has a 5-7 career record, will make $5.5 million in East Lansing next season — more than any coach in the Pac-12 is expected to earn.
The development was the latest and most glaring example of the resource advantage possessed by the Big Ten and SEC, which distribute $22 million and $12 million more per school per year in media rights, respectively, than the Pac-12.
“We’ve got some runaway things going on in some of the conferences relative to salaries for coaches, so we have a completely different model,’’ Crow said.
“We need football and men’s basketball to be very competitive because they generate the revenue by which we make our programs work.
“But we’re not going to buy into this endless model of whatever it takes, whatever happens, this sport is more important than all these other sports.”
In the other Power Five conference, football is considered more important than “all these other sports.”
Pac-12 presidents and chancellors hadn’t shared that view — at least, not until recently.
Scott told the Hotline last fall that a shift in sentiment is underway. The struggles in football and men’s basketball resonated across the campuses and with the presidents, many of which are new to the conference.
Crow is one of three remaining from the group that hired Scott in 2009 and made the Olympic sports a priority in the mission of the Pac-12 Networks.
The others are Oregon State’s Ed Ray, who’s retiring this spring, and UCLA’s ‘Silent’ Gene Block, who hasn’t, to the best of our knowledge, uttered a public peep about Pac-12 athletics in a decade.
“In football and basketball, we’ve gone through some very tough years,” Scott said.
“I have, and I think the presidents and chancellors have, seen the impact that has on fans, national reputation and the media narrative around the conference.
“Wake-up call may be too strong, but there has been a real awareness of the impact success in football and basketball can have on the overall reputation and feeling in the communities we serve.”
That seems to suggest Crow is an outlier on the topic of football’s place of primacy.
The discussion with 98.7 FM — thanks to Doug and Wolf for getting Crow on the air; the more transparency, the better– then turned to Scott’s job performance.
“Larry has a tough assignment,’’ Crow said, “and he has a lot of people who have been upset at him because they think we need to be generating a lot more money, that we don’t have the best TV deal, that the Pac-12 Network isn’t generating enough revenue and so forth and so on.
“Those are people that are forgetting the complexity of everything that we’re trying to do.
“Larry has help us increase our revenue by a factor of five, so we’re very happy about that.
“We have the best deal we’ve ever had. It will come up for renegotiation, we think, at just the right moment with the expansion of the internet and all kinds of new streaming services.
“We think we’ll be really well positioned to get additional revenue enhancements into the conference, so we’re excited about that.
“And we own this asset, the Pac-12 Network. There’s no other owner. We built it. We own it. It sits there in San Francisco. We’re excited about it. It makes a net margin for us, a net payment to the university, so we’re happy about that.
“It turns out that that asset will be unbelievably valuable as we move into this internet streaming world and people want to see the hundreds of live events we have.
“They want to see softball, they want to see wrestling, in addition to football and men’s basketball and women’s basketball and so forth.
“They want to see these things. I think we’re well positioned, and I am a supporter of Larry’s.”
Crow, it appears, believes that retaining 100 percent ownership in the Pac-12 Networks will prove a stroke of genius — that the Olympic sports will generate a game-changing windfall for the conference when its media rights are up for bid in a few years.
Crow also believes that if you’re at all concerned about the Pac-12’s current position, well, you are simply ”forgetting the complexity” of everything the conference is trying to do.
Far be it for the Hotline to challenge the views of a university president.
Just kidding.
Of course we’re going to challenge the views of a university president, because Crow is passing theory off as fact, hope off as reality, on a topic of extreme importance to the future of the conference.
And that doesn’t seem like a beneficial approach for the collective.
Here’s the reality: Crow doesn’t know what the media world will look like in a few years.
We know this because, as Big 12 commissioner Bob Bowlsby told the Hotline last year: “My belief is that anybody who tells you what the media environment will look like three years from now is delusional. (Which companies) will be in the mix? How aggressive will they be in the marketplace?”
We know his because, in the 12 months since the Pac-12 announced it was seeking a strategic partner to assist with its media rights, the Hotline has spoken to a dozen media industry analysts, consultants, advisers and executives about the mid-decade landscape that will shape the Pac-12’s negotiations and options.
And none of them expressed a whiff of a hint of certainty about the shape of the sports media world and, specifically, the role streaming will play at the negotiating table.
If they don’t know, how does Crow know?
He doesn’t.
Crow is repeating a best-case scenario that has been laid out for Pac-12 presidents by Scott and Joe Ravitch.
Ravitch is the co-founder of The Raine Group, an investment bank that advises on media deals and was retained by the Pac-12 last winter to explore strategic options.
He discussed a vision for Pac-12 content with the Hotline:
“What the Pac-12 has is a massive amount of tonnage, and SVoD (Subscription Video on Demand) is for cult audiences. Think about Netflix. So it becomes about attracting cult audiences in sports.
“There are a ton of ways to slice and dice the (Pac-12) content. There are an infinite number of ways you can license the content to Amazon or OTT.
“All the Tier 2 events (Olympic sports) that don’t rate on broadcast television? There’s room for those in the OTT world.
“The future is all about smaller sports (packages) and the ability to slice and dice, so you’ve got, let’s say, Colorado games for $10 a month for fans living anywhere.”
That sounds exactly like Crow’s vision, only with more specifics.
But how many fans would pay $10 per month for a package of Arizona State’s Olympic sports?
How many would pay $10 per month for unlimited access to every Pac-12 wrestling match?
How user-friendly and visually-pleasing will live streams be in a few years?
How well-funded will they be?
Nobody knows.
But we do know that the Pac-12 Networks, described by Crow as being an “unbelievably valuable” asset in the future, are not an unbelievably valuable asset right now.
There are in about 17 million viewers, fewer than the Pursuit Channel.
In eight years, they have yet to meet the low end ($3 million) of campus distribution projections.
The number of people watching most of the Olympic sports broadcasts registered a zero rating (as of 2017).
Yes, the football and men’s basketball games currently on the Pac-12 Networks will have value at the negotiating table, but those will undoubtedly be packaged with the games currently owned by Fox and ESPN to create a single, primary asset for a major network.
Crow is convinced that the sports currently watched by hundreds will prove incredibly lucrative.
There is no evidence — only hope — to support that position.
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