The Pac-12 has decided against selling ownership in its media rights to a private equity firm, commissioner Larry Scott told the Hotline, but it still could take on a strategic partner.

Scott said the presidents and chancellors have ruled out an arrangement with a “pure financial institution” that would receive minority ownership in a media rights holding company and, in return, provide each campus with tens of millions in up-front cash.

However, the Pac-12 continues to examine partnerships with media or tech companies that could involve selling ownership for cash but would better position the conference for media rights negotiations in 2023-24.

“We’ve narrowed the field,’’ Scott said. “(The CEOs) were not interested in doing something with a pure financial institution, even though we had a lot of interesting offers at the kind of valuations we were hoping for and really great terms.

“They don’t want to do something with a private equity or financial firm.”

(Scott’s comments were pulled from a lengthy conversation that will be published as a podcast next week. The podcast is part of an upcoming Hotline series on his 10 years at the helm of the conference.)

Over the years, the Pac-12 has occasionally engaged in what Scott terms “look-ins” to establish a valuation for its media rights, but because of budget stress and the expanding revenue gap with other conferences, this exercise took on greater urgency.

In January, the Pac-12 hired the Raine Group to canvass the marketplace for potential partners.

In exchange for an ownership stake in the media rights holding company, the partner(s) would provide an up-front investment to be distributed to the schools.

The conference reportedly sought investments in the $500 million to $750 million range, based on total rights valuation of $5 billion.

Scott said the response “has convinced me and our members that we’re sitting on a lot of unrealized value, and we have reason to be confident when our rights become available.

“Some of the smartest minds out there, some of the people that make the biggest bets on sports, are really interested in working with us.”

And some of them still might.

Even though the Pac-12 has rejected any arrangement with private equity companies — the CEOs came to that conclusion several months ago, Scott said — the conference remains open to taking on a strategic partner, with ownership as part of the arrangement.

“The charge I was given by our schools was to narrow the focus to those that might be strategic partners— to media companies tech companies that could possible help with an infusion of capital to our schools financially but also could maybe help us in other ways,” Scott said.

Industry analysts were deeply skeptical of the Pac-12 partnering with a financial institution or private equity firm, with one telling the Hotline this summer:

“I can understand why investors would want in. You talk to equity guys, and they could structure a low-risk deal. There’s not a tremendous risk in getting revenue out of a TV deal.

“But I can’t understand why the presidents would ever do this.”

Several of those same analysts saw logic in partnering with a media or tech company — as long as the terms were favorable for the universities.

The short-term cash infusion would serve as a bridge loan until the new media rights deal begins in 2025.

But the short-term benefits, analysts said, would have to be significant enough to mitigate the long-term loss of income resulting from the strategic partnership.

Media and tech companies might not demand the same return on investment as a private equity firm because of the benefits that would come from owning Pac-12 football content.

Removing private equity firms and focusing on tech and media partners has “kind of slowed down the process,’’ Scott said.

“But it also has been really helpful for the presidents and chancellors … to get a look-in. It has been a confidence builder to see the reaction we’ve gotten, to say, Hey, we know we’ve had our challenges. We know we’ve fallen behind when it comes to (Pac-12) network distribution, network revenue. But our strategy, and what is likely going to happen, has really been validated by this process and the interest that we’ve had.’’

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