So, what’s the highest paid conference commissioner up to these days? Building a powerhouse TV network, it seems.
Kagan’s research shows that, in addition to its well-documented limited reach (i.e., households), the Pac-12 National network generates a dramatically lower average subscriber fee than the SEC and Big Ten networks.
Perhaps more surprising is that the Pac-12 National’s subscriber fee has dropped over the years — and not by a few cents, either.
It has plunged.
According to Kagan, the Pac-12 National network received an average of $0.30 per subscriber (coast-to-coast) when it was launched in 2012.
That number accounts for the higher fees paid by subscribers inside the conference’s home markets and the lower fees paid by out-of-market subscribers (i.e., viewers from Topeka to Bangor to Miami).
To be clear: That tiered fee structure is standard practice for college networks. The SEC’s subscriber fees are higher in Birmingham than Billings; the Big Ten doesn’t command the same fee in Albuquerque as it does in Ann Arbor.
But here’s where the situation gets interesting.
Kagan’s research listed the average national subscriber fee in five-year increments:
* In 2012, the Big Ten commanded $0.37 per sub, while the Pac-12 National network received $0.30.
* By 2017, the Big Ten’s average sub fee had jumped to $0.48, an increase of 30 percent, while the Pac-12 fee had dropped to $0.11.
That’s right: From $0.30 to $0.11 in the five-year span.
Of the 24 networks listed in the research report that existed in both 2012 and 2017, the Pac-12 Network was one of only four that experienced a drop in sub fees over the span. The others were the Olympic Channel, the Tennis Channel and beIN Sports.
Nifty trick, that.
Now, Wilner goes on to point out that the Pac-12 probably hasn’t lost money in the process. That’s because it’s swapped subscriber fees for subscriber eyeballs. To put it more succinctly,
“They took lower revenue in order to reach more homes,” said Adam Gajo, a Kagan analyst who covers regional sports networks.
This, in a day when demand for televised live sports seems almost bottomless, doesn’t seem like optimal marketing.
But let’s view this hypothetically:
Even if Kagan’s estimates for Pac-12 National are off by 25 percent — a complete whiff — the network would still be generating an average of just $0.14 per sub.
That’s in line with the Tennis Channel and the World Fishing Network but nowhere close to the Big Ten or SEC networks.
To reiterate: The fee drop doesn’t mean the Pac-12 Networks are cratering.
But the Kagan estimates are more evidence of a lagging business … another nugget to help fill in the pixels … to help us gain a slightly better understanding of the finances.
After all, the Pac-12 Networks are a nine-figure annual enterprise owned by 10 public (and two private) universities.
If you’ve ever wondered if you have what it takes to run a P5 conference, Larry Scott is here to tell you not to sell yourself short.