Wednesday, April 23, 2014

Pac-12 Running Out of Time to Get on DirecTV

DirecTV just brought The Weather Channel to its knees. Will the Pac-12 follow suit and beg for forgiveness?

The Pac-12 Network is about to enter its third year of existence, yet there are no signs that it soon will be carried by DirecTV, one of the nation's top programming distributors—and the major one among sports fans. The two sides haven't even had any tangible discussions in 2014, so a resolution to the impasse is anything but imminent.

And that's very bad news for the Pac-12.

With the SEC Network about to enter the fray in August, the Pac-12 can ill afford being shut out of DirecTV for a third year and likely beyond. Should the SEC join the Big Ten to launch its network on DirecTV, it'll further cement Pac-12's status as an also-ran with its TV network further marginalized.

The biggest mistake the Pac-12 and its commissioner Larry Scott made was not to bring DirecTV into the fold when the network was launched in August 2012. And soon after the initial talks fell apart, the Pac-12 carried on a confrontational tactic that asked its fans to switch from DirecTV, with conference athletic directors leading the charge, including this one from Sandy Barbour:

The Weather Channel used the same playbook when it was dropped by DirecTV in January, taking out a full-page ad in the Wall Street Journal to taunt DirecTV. Scott should ask David Kenny, the CEO of TWC's parent company, how that worked out. Kenny finally got TWC back on DirecTV on April 9 by pledging to cut back on reality TV shows and issuing a humiliating apology.

Make no mistake: DirecTV is in no rush to make a deal with the Pac-12. It has already sustained whatever loss of subscribers it was going to be hit with over the past two years and is not at risk to lose a chunk more. It also needs to prioritize whom it needs to make a deal with in an increasingly crowded and expensive sports programming market.

With more than 20 million subscribers around the nation and nearly two million in its base in Southern California, DirecTV is currently embroiled in a spat with Time Warner Cable, which launched a new Dodgers channel this spring. All major carriers in SoCal so far have resisted Time Warner's fee demand of nearly $5 per subscriber and having the channel placed on the basic tier.

On a different front, DirecTV is actively in negotiations with the SEC Network ahead of its Aug. 14 launch. DirecTV has to seriously engage the SEC after its opening gambit was met with tremendous blowback from SEC fans, as well as the fact that the SEC Network is co-owned by ESPN, the most powerful entity in sports television.

The Pac-12, on the other hand, has no such clout. By deciding not to take on a partner, the conference left its network with no leverage whatsoever. And since the Pac-12 fanbase is not as rabid as SEC fans and the conference footprint contains six NFL franchises, massive fan defection from DirecTV just hasn't materialized. DirecTV remains the exclusive provider of the NFL Sunday Ticket through 2014.

Being shut out of DirecTV for two years has hurt the Pac-12's recruiting and branding, not just in football but also other sports, particularly men's basketball. This past March, a majority of the Pac-12's conference tournament games were available only to a fraction of the national audience, when every other major conference had every game on TV.

The endgame here isn't going to be pleasant for Scott, who must compromise way more than DirecTV would be willing. The Pac-12 needs to lower its demands and perhaps offer give-backs to other distributors that already carry the network.

Time is of the essence. Once DirecTV cuts a deal with the Dodgers and the SEC, there will be little to no room left for the Pac-12.

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