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Volume 26 No. 60
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Pac-12 Turned Down ESPN Offer To Take Over Networks' Distribution

ESPN would have extended its rights fee agreement with the Pac-12 well into the '30s under its proposal

The Pac-12 late last year "rejected an offer from ESPN to partner on the Pac-12 Networks, a deal that substantially would have boosted the distribution outlook for the underperforming channels," according to sources cited by Ourand & Smith of SPORTS BUSINESS JOURNAL. The conference’s board of presidents and chancellors "turned down what sources described as a credible offer that would have seen ESPN take over distribution of the networks." ESPN also "would have extended its rights fee agreement with the conference well into" the '30s. ESPN Exec VP/Affiliate Sales & Marketing Justin Connolly and Exec VP/Programming & Scheduling Burke Magnus "met multiple times with Pac-12 Commissioner Larry Scott on the proposal before the conference ultimately passed on it." Sources said that the main reason was that the conference "didn’t want to miss out on a potentially huge media rights fee increase during the next round of TV negotiations." The conference also "didn’t want to cede its full control of the networks" (SPORTS BUSINESS JOURNAL, 3/25 issue).

STARTS AT THE TOP: In Portland, John Canzano wrote the only way for the Pac-12 to "crawl out of the hole it has dug itself, is to flush Scott and move forward with fresh leadership." The conference needs "vision and strength that is going to have to come from within the Pac-12 CEO Group." Scott has had "three old-guard supporters among the CEO Group" in Oregon State President Edward Ray, UCLA Chancellor Gene Block and Arizona State President Michael Crow. But Ray announced he will step down in '20, and the "whisper is Block, 70, could retire" in '20 as well. The conference is "a mess," and Scott's solution is to seek a $750M "cash bailout by selling equity in a newly formed media company." It is a "desperate play," but the Pac-12 is in a "desperate position." Conference members face a dilemma: "Fire Scott now and risk the appearance to potential investors that the house is in disarray? Or make a move on Scott now, hire someone with credibility, and send a message that things have turned for the better?" The "clock is ticking for Scott" (Portland OREGONIAN, 3/23).