Why we don’t see DirecTV/Pac-12 deal for ‘15

YOU MAY HAVE noticed multiple news outlets this week reported the FCC’s chairman has signed off on AT&T’s takeover of DirecTV. You may have heard this increases the chances the Pac-12 Networks and DirecTV will come to an agreement in time for this season. Alas, you may want to temper that enthusiasm.

If you’re thinking about switching to DISH from DirecTV in order to get the Pac-12 Networks for this football season, see note at the bottom.

It’s true, the chances of DirecTV adding the Pac-12 Networks do increase if/when the takeover occurs because of AT&T’s relationship with the Pac-12 (distribution, sponsorship, equipment). But I see it happening in 2016, not in time for this year’s football season.

The Mercury News’ Jon Wilner, who covers the angles of the conference’s TV rights deals better than anyone, blogged that multiple sources suggested AT&T could ask for a lower in-market subscription price (say $0.60 per subscriber vs. the current $0.80). Current Pac-12 partners Comcast, DISH, Time Warner, U-verse, etc., would then naturally ask for the new lower rate and commissioner Larry Scott faces this question: Would more exposure - but the same revenue - be worth it?

The thing is, Scott has already made that decision. Many times.

Since the network was announced in 2011 and began broadcasting in 2012, Scott has held firm on the asking price. If the Pac-12 was going to trade increased exposure for revenue and shake hands with DirecTV, they would have done it last year, the year before or the year before that. To abruptly do an about face now would mean the last three years were a complete waste of time.

But let’s say AT&T doesn’t ask for a discount. There are still significant obstacles to getting the Pac-12 Nets on DirecTV’s airwaves in a little over a month.

The biggest challenge is the size of the deal itself. This is a massive and complex $49 billion takeover. The issue of the Pac-12 Networks is nowhere near the top of the priority list of things to get done. It could also be days or weeks before the deal is officially approved by the FCC. Tick, tick, tick.

DirecTV has appx. 20.4 million subscribers, but only 3.9 million in the conference’s geographic footprint. A carriage deal with DirecTV would not be the cash cow many imagine if offered only in that geographic footprint (as opposed to on the basic tier for all subscribers). If the sub fee stays where it is, each Pac-12 school would benefit by an estimated $2.9 million per year from those 3.9 million subscribers. If the sub fee is $0.60, the per-school revenue would be $2.1 million.

Either figure is a nice chunk of change, but it’s not paradigm shifting nor does it come close to filling in the coming gap between the Pac-12 vs. the SEC and Big Ten. Wilner estimates that with new TV deals coming for the SEC and Big Ten, each Pac-12 per school will trail the their SEC and Big Ten counterparts in TV-related revenue by a massive amount, including $10-12.5 million in 2017-18.

Every year, there’s a swell of exuberance on the web and in the media that a deal is about to get done between the Pac-12 and DirecTV. Every year those scenarios have crumbled and in their wake, it's revealed it was never a likely proposition in the first place. Until there is a real, tangible reason for optimism, one built on Pac-12 or DirecTV sourcing, a deal made in time for this football season remains unlikely.

I do believe AT&T will put the Pac-12 Network on DirecTV, but in time for the 2016 season, not this year. Hopefully, things change and it gets done. But it’s awfully hard to see Scott announcing a deal before Sep. 5 crafted out of reduced sub rates: ‘This is a great day. And the last three years were for nothing. Now if you’ll excuse me, it’s Miller time.’

Two of the first three Cougar games this season (Portland State, Wyoming) will air on the Pac-12 Networks, with more to come as the schedule is filled out. Last year, a whopping seven of the Cougs’ 12 games aired on the Pac-12 Networks.

If you have DirecTV and plan to make the switch to DISH, don't leave money on the table. Check with your friends and family who have DISH and have them give you a referral -- both you and they will receive an extra $50 discount in addition to all the other discounts/deals for new customers on DISH. (If you don't know anyone who has Dish, shoot us an email either on the CF.C forums through your Inbox in the upper right of the page, or by clicking HERE, and we'll get you someone who does so you and they can save that extra $50.)

NOTABLE NOTE:
The Pac-12 Networks will air 34 Pac-12 football games this fall. Seventeen of those games will air in the first three weeks of the season.


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