Home / Networking / Hotline newsletter: Rejecting ESPN’s offer to take over the Pac-12 Networks was the smart move (sounds crazy, but it’s true) – Santa Cruz Sentinel

Hotline newsletter: Rejecting ESPN’s offer to take over the Pac-12 Networks was the smart move (sounds crazy, but it’s true) – Santa Cruz Sentinel

* The Pac-12 Hotline newsletter is published each Monday-Wednesday-Friday during the college sports season (and twice-a-week in the summer). This edition, from March 27, has been made available in archived form …


Adrift for years in deep water, the Pac-12 Networks had a lifeline: According to a report by John Ourand and Michael Smith in the SportsBusiness Journal, no less a savior than ESPN swooped in last fall with an offer to take ownership of the networks. The proposal called for a lengthy contract (into the 2030s) but would have provided the networks with long-sought carriage on DirecTV.

And the Pac-12 said thanks … but no.

Yep, commissioner Larry Scott and the presidents/chancellors rejected ESPN’s offer and doubled … no, tripled-down on the same strategy that created the problems in the first place.

And they were right.

Tempting as the ESPN offer seems, it was the wrong move for the networks at this point in their life cycle.

One could make a highly-credible case that Scott’s original business model — with the conference retaining 100 percent ownership in a media company with supply (six regional networks, 850 live events) that far overestimated demand — was a major strategic blunder that has severely hindered the schools on two fronts: revenue and exposure.

But that doesn’t mean selling ownership in the networks now was the smart move.

From here, it appears the Pac-12 had two options when ESPN came a-knocking:

Option 1: Sell off the Pac-12 Networks and head into the momentous media negotiations in 2024 with the only inventory available being the 44 football and 70 men’s basketball games currently on ESPN and Fox as part of the Tier 1 deal.

Option 2: Keep control of the Pac-12 Networks and saddle up to the negotiating table — discussions will begin in three or four years — with every last bit of content in the warehouse.

My guess is that Scott and the CEOs concluded the windfall from Option 1 (whatever ESPN was willing to pay now for the struggling networks, plus the value of the Tier 1 rights in a few years) wouldn’t be as substantial as the windfall from Option 2 (everything available to the highest bidders, which could include the deep-pocketed digital media companies).

And they’re probably right. The value of live sports continues to grow, and the potential for multiple bids seems high.

(Of course, the better the Pac-12 performs on the field in the 18-24 months before negotiations begin, the better its prospects to hit the jackpot — and policy made by the conference office impacts performance on the field. In other words: Get the football operations side fixed, quickly.)

What’s more, selling to ESPN would have removed an enticing option currently on the table — the ability to create a media-rights holding company that, in theory, could become a substantial company over time, with the rights to other sports and events, domestically and internationally.

Who knows if that possibility will ever be realized, but it wouldn’t exist if the conference had handed over the networks to ESPN.

Had the life line been offered five years ago, when it became clear a DirecTV deal wasn’t happening, the Pac-12 might have been wise to accept.

But ESPN waited … waited until the Pac-12 seemed desperate and vulnerable.

And now it’s too late to sell.

It’s too late in the current rights cycle for the conference to change course.

Sell to ESPN now, and the sacrifices made by the schools in revenue and exposure would be for naught.

Sell to ESPN now, and the last seven years are rendered a waste.

It would have been the easy thing to do, and the wrong thing. — Jon Wilner

*** Sign-up here for a free subscription to the Hotline newsletter. Thanks for your support.


• Three years ago, the SEC was where the Pac-12 is now: Three NCAA bids, one team in the Sweet 16 and negativity smothering its basketball product. At that point, commissioner Greg Sankey took decisive, dramatic steps to get better. Within the rebirth, are there lessons for the Pac-12?

• Brian Bennett’s latest basketball column for the Hotline zeroed in on the coaching vacancies at UCLA, Cal and Washington State. Each program needs to make a better hire than it did the last time around.

• The Hotline is 5-3 thus far against the spread. My picks for the Sweet 16 were published this morning. It should be a terrific two days, and Oregon should cover against Virginia, if not win outright.

• ICYMI: The Monday newsletter provided an update on the number of NCAA units earned by each power conference thus far (every game played is worth approximately $1.8 million over time). Previous editions of the newsletter are available in archived form using the following hashtag:https://www.mercurynews.com/tag/pac-12-hotline-newsletter/

Why we need your support: Like so many other providers of local journalism across the country, the Hotline’s parent website, mercurynews.com, recently moved to a subscription model. A few Hotline stories will remain free each month (as will this newsletter), but for access to all content, you’ll need to subscribe at a rate of just 12 cents per day for 12 months. And thanks for your loyalty.


Content on the college basketball corruption scandal.

• Arizona and Oregon were among the schools caught up in the latest development, as celebrity attorney Michael Avenatti accused Nike of making cash payments to associates or family members of Bol Bol and DeAndre Ayton. Where this could lead is anyone’s guess, but 1) the NCAA is probably interested in Avenatti’s information and 2) the very last thing the Arizona program and coach Sean Miller need is more bad headlines … Oregon coach Dana Altman responded to the allegation


March 28: Oregon vs. Virginia (7 p.m., TBS)April 3: Washington starts spring practiceApril 6: USC spring game (11 a.m., Pac-12 Networks)April 6-8: Final Four (Minneapolis)April 17: basketball spring signing periodApril 21: NBA Draft declaration deadline


• Washington State reportedly will hire Kyle Smith, who upgraded the Columbia and USF programs and is a former assistant to highly-regarded Saint Mary’s coach Randy Bennett. Hard to argue with WSU’s plan.

• Jaylen Nowell is expected to explore his NBA Draft options, according to UW coach Mike Hopkins. If Nowell doesn’t hire an agent during the pre-draft process, he would have the option to return to school.

• Arizona State’s good, bad and outlook: Another NCAA appearance, so many missed opportunities, but reason for optimism. “I think people are enthusiastic about what we’re building,” coach Bobby Hurley said.

• Leave it to the NIT to rekindle an old rivalry: Colorado visits Texas in the quarterfinals.

• Arizona’s highly-touted recruits, Nico Mannion and Josh Green, remain committed to the Wildcats.


• Oregon got home late Sunday night from the second-round victory in San Jose, then was back on the road Tuesday for the long fight to Louisville. “We may go walk-through stuff somewhere. It is just making sure that mentally they are ready,” coach Dana Altman explained. “Physically, we don’t want to tire them out.”

• A statistical comparison of Oregon and Virginia. They’re oh-so-close defensively, but the Cavs have a significant edge offensively.

• In a reseed of the teams remaining by CBS Sports’ Matt Norlander, Oregon comes up … last. The reason: Poor metrics.

• SportsMediaWatch digs into TV ratings for the tournament: Duke-UCF was, not surprisingly, a huge draw. Overall, ratings are up, especially when streaming viewers are included.

• Every starter in the Sweet 16, ranked.


• The Associated Press produced a detailed analysis of NCAA Tournament payouts, tracing 21 years and $3 billion dollars through the funnel. The AP’s conclusion: “It all points to a long-term problem for mid-majors as power conferences stockpile wins and invites in the tournament: It takes revenue to build a program that can compete with the big boys. For those with less, it is becoming harder to generate more.” A worthwhile read on the money behind the madness.


• This should come as no surprise to anyone who watched Utah last season, but receiver Britain Covey — as tough a player as there is in the conference — is recovering from too many injuries to count.

• Call it friction, tension or simply “growing pains,” Arizona offensive coordinator Noel Mazzone hopes it’s a thing of the past with quarterback Khalil Tate.

• With all the focus on USC’s quarterbacks and receivers in coordinator Graham Harrell’s spread offense, let’s not forget the system could create opportunities for the talented but underutilized running backs.

• Oregon is on the hunt for reliable depth in the secondary during spring practice. At least the Ducks are set with their starters across the back line.

• Eight breakout candidates for Washington this spring. (Most are on defense, where the Huskies were hit hard by attrition.)

• How punters and kickers kill time at practice. Two words: trick shots.


A section devoted to content on Pac-12 Olympic sports.

• Arizona State is headed to the NCAA Tournament … in ice hockey. It’s the first appearance for the four-year-old program.

• Stanford became the first team in the past 15 years to win three consecutive NCAA women’s swimming titles.

• Oregon no longer possesses the top women’s track and field program in the conference. USC has taken over.

• Next up for UCLA in the NCAAs: UConn … And there’s plenty on the Bruins — and other Pac-12 teams — in this ESPN roundtable.


What’s coming on the Pac-12 Hotline:

• Dana Altman wasn’t Oregon’s first choice, or its second … or third. Former athletic director Pat Kilkenny walked the Hotline through his pursuit of a head coach in 2010 as we examine the best Plan B hires in recent conference history.

The next newsletter is scheduled for Friday. Like it? Please forward this email to friends (sign up here). If you don’t, or have other feedback, let me know: pac12hotline@bayareanewsgroup.com.


*** Follow me on Twitter: @WilnerHotline

*** Pac-12 Hotline is not endorsed or sponsored by the Pac-12 Conference, and the views expressed herein do not necessarily reflect the views of the Conference.


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