Conference expects digital giants to bid for media rights

ESPN and Fox now hold the Pac-12’s main package. Photo: getty images ESPN and Fox now hold the Pac-12’s main package. Photo: getty images ESPN and Fox now hold the Pac-12’s main package. Photo: getty images

Big digital companies were nowhere to be found when the PGA Tour sold its media rights to CBS, NBC and ESPN earlier this year.

The FAANG companies — Facebook, Apple, Amazon, Netflix and Google — have not been especially active during early talks for NFL or MLB rights either, several sources say.

But when the Pac-12 Conference negotiates its next media rights deal to start in the fall of 2024, conference executives expect the deep-pocketed digital companies to make serious bids.

Why?

“This is what they’re telling us,” Pac-12 Networks President Mark Shuken said. “Several of them have come to us and said that they want to be in this space.”

The most intriguing conversations have come with Apple, which so far has not settled on a financial model around sports rights. Apple executives have told conference and school officials that they see live sports as a programming genre that can set its direct-to-consumer business apart from its rivals.

Apple also was attracted by the conference’s physical location. The Pac-12 is based in San Francisco; Apple is in nearby Cupertino, Calif.

During one meeting, Apple executives told the Pac-12’s school presidents that it was only interested in the conference’s primary media rights package, not a digital one. ESPN and Fox currently hold the rights to the conference’s main package, paying a combined $250 million per year on average to the conference.

“They said that they are very interested in learning more about the rights and learning more about the business to determine whether or not they’d be a viable partner in 2024,” Shuken said. “They said that, on the surface, we look like a good partner to investigate.”

The conference already has a small relationship with Apple, which carries the Pac-12 app via Apple TV. “We’ve also been working with them on experimenting with different products that we have,” Shuken said.

With the launch of streaming services, like ESPN+ and last week’s Peacock, Shuken sounded confident that the media landscape in 2024 will be significantly different than the one today, with consumer habits drifting more substantially to direct-to-consumer services.

“We’re kind of lucky because we can watch some of the other direct-to-consumer models now and see how they play out,” Shuken said. “Companies are really testing the models right now to figure out the best way to do it.”

The conference established relationships with the digital companies over the past year, as it sought potential investors that were interested in taking an equity stake in the conference. Ultimately, the conference decided to move forward on its own. But it was heartened by the amount of interest.

“That validated the premise that there will be new bidders and bigger bidders and better economics than we have now,” Shuken said. “The presidents chose not to move forward with a financial partner, but we also created a lot of relationships."