Pac-10, ACC Logical Media Partners

Here’s the lay of the land for college conference media deals: the ACC, Big 12, and Pac-10 will all vie for new contracts over the next two years, the two models are partnership [with established media networks for substantial rights fee] or ownership [of your own network].

The partnership model yields lower risk, however few options exist – mainly ESPN, Fox Sports, and CBS – and each competitor has already allocated significant chunks of programming time and fees to the SEC, Big 10 and Big East. This leaves the three remaining BCS conferences to fight over a limited supply of money and distribution. Conversely, launching a cable network is a difficult proposition in this market. Each conference has seen the Big 10 battle for distribution, while the NFL Network continues to lose its fight with providers, among other networks in protracted carriage disputes.

Larry Scott, newly crowned Pac-10 Commissioner, publicly acknowledges that he must market his conference to a wider audience, while ACC Commissioner John Swofford understands how the recent SEC deal changed the economic balance of power in college sports. Signing a rights deal with ESPN, likely for less than the SEC will not do justice to either conference’s bigger mission. The Pac-10 and ACC would play second fiddle to the SEC in college, and get buried under the NFL, golf and tennis majors, MLB coverage, and the NBA. ESPN and ESPN2 have limited shelf space, most of which is occupied. Additionally, these conferences need top billing to increase exposure and drive other revenue streams.

Given the difficulty to launch cable networks, a partnership between the conferences increases their leverage, disperses some of the risk, and increases the upside potential. Each conference brings an iconic team in both major sports – USC is the gold standard in football, as UNC and Duke are in basketball, while Florida State and Virginia Tech hold clout in football, as UCLA and Arizona do out West. They play in complementary timezones, opening the door for cyclical live programming and bi-coastal doubleheaders.

While gaining distribution is difficult, this combination is arguably a better sell than the Big 10. The aggregate covers no less than 12 of the top 30 TV markets to the Big 10’s 7, which is a generous count. Further, it’s presence in more overall markets would the network to charge a premium fee to more “in-market” consumers, thus increasing revenue. It follows that offering programming from two regions, with numerous displaced, yet passionate fans, creates a better selling point to cable providers not in school markets.

New business development opportunities can stem from the relationship. In place of the ESPN contrived basketball conference showdowns, a compelling pre-season ACC-Pac-10 series would draw interest, while the network could investigate bidding on college bowl games involving the two conferences, both creating a more compelling programming slate.

Another key is content ownership. Both conferences have the opportunity to learn from the SEC’s Digital Network initiative, and roll out an enhanced revenue generating machine in a few years. Doubling the content library opens new, creative bundling opportunities to sell to the sponsorship market and to license out. Without diving into financial projects at this stage, with the right management in place, its feasible to make the sum value of their content libraries greater than the individual parts.

And they count the greatest golfer and greatest basketball player ever among their combined alumni – hmm, shoulder programming?

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