John Ourand of the Sports Business Journal joined Ty Hildenbrandt and Dan Rubenstein this week on one of my favorite podcasts, The Solid Verbal. The topic du jour, of course, was the Pac-12 media rights negotiations. When you hear numbers like $300 million being tossed around by Pac-12 commissioner Larry Scott for a conference that couldn't even crack $70 million with its previous deal, it makes you wonder if a massive windfall is actually realistic.
In short, it might not be $300 million, but all signs point to $200 million-plus certainly being in the picture. Ourand says you can credit the changing landscape of television programming:
"The reason people want live sports is because the traditional entertainment programming that you see in primetime just is not working. ... What you have with live sports is, because it's live, people don't DVR it, so people are actually watching it live. And more importantly, the people that are watching it, and the people that are the biggest fans, are part of the 18-49 demographic. And that's especially important because that's who advertisers want to reach. And because advertisers want to reach them, then TV networks are able to sell a ton next to the live sports, and they end up making the money back.
"The ratings have been going up. The interest has been going up. And while everything else seems to be dropping, especially from an entertainment part. You take a look at things like American Idol or Dancing With The Stars, and these are sort of live competitions, or live sports, that are really driving the television model right now."
And as for what number the Pac-12 eventually ends up with? If the demand really is as high as Ourand suggests, and if Scott can entice multiple bidders ... watch out:
"Right now, the numbers that are being floated around ... the money just is going up, up, and up. We had a conference down in Florida, and Tim Leiweke just talked about how rights fees were going to triple, and people kind of laughed. But it's happening. You're seeing rights fees that aren't just doubling but tripling, and it's because these TV networks really view live sports as a way for them to make money and bring advertising on board and get license fees from cable operators to increase a bit. Their not doing it with entertainment programming. It really is all about live sports.
"I've never seen a market like this. It's as hot as anything I've ever seen.
They talk later in the podcast about the Pac-12 specifically, and I suggest you go listen to at least the first 25 minutes -- the duration of Ourand's interview. (Although, the Cam Newton stuff that immediately follows is pretty dang funny, so feel free to keep listening.)
One final thought. A lot of people have been wondering what kind of impact the NHL deal with NBC/Comcast will have on the Pac-12. I have no business knowledge whatsoever, but common sense tells me it's not just a good thing for the conference, but a great thing.
Think about it this way. NBC/Comcast/Versus has had the NHL rights for the last several years. What has it done for the Versus brand? So little that NBC/Comcast is going to be rebranding it in the next three months. It's yet to become a destination channel for sports fans, as many people still don't know where the channel is. The NHL is a niche sport with a niche fanbase; it seems to me that there's no way NBC/Comcast would hitch their entire live sports programming to that sort of league. If anything, the NHL would seem to be complementary to something else.
What else is out there? Basically, the Pac-12.
So, if they're willing to pay $200 million annually for the rights to a niche league with pitiful ratings in order to increase their live sports inventory, how much would they pay for all the inventory of a 12-team college conference that can lead with the second-most popular sport in the country, college football, that would reach a completely different segment of that coveted "18-49" demographic?
My guess? A lot.