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Speaker 1: Hi, I'm Scott and I'm Michael bar On this weekly podcast,

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Speaker 1: we explore the big money issues in the world of

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Speaker 1: sports and talk to some of the biggest players in

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Speaker 1: the industry. On this show, we speak with PAC twelfth

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Speaker 1: Commissioner Larry Scott and he tells us what's foremost on

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Speaker 1: his mind regarding the business of sports. There's so much

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Speaker 1: going on um in terms of you know, what you

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Speaker 1: deal with day to day in sports and never knowing

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Speaker 1: what you're going to wake up to, of course in

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Speaker 1: a role like I'm in. But first let's look at

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Speaker 1: the top stories of the weekend with This is Business

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Speaker 1: of Sports reporter Evan Nobi Williams, and let's start with ESPN.

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Speaker 1: More layoffs at the sports network, second time this year.

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Speaker 1: Unlike the first time, Michael, this is a hundred and

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Speaker 1: fifty employees, most of which are names that fans at

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Speaker 1: home will not know. These are not on camera stars,

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Speaker 1: these are producers, these are editors. But again kind of

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Speaker 1: indicative of the struggles that ESPN has had and really

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Speaker 1: the cable news networks are having over the past couple

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Speaker 1: of years. The revenue is just not flowing in the

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Speaker 1: way that it used to and these cuts are a

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Speaker 1: result of that. Subscribers down again, just a re allocation

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Speaker 1: of resources. They're not going to pour money into things

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Speaker 1: like Sports Center, ESPN News. They're gonna focus on digital programming.

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Speaker 1: This is just ESPN trying to find a way to

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Speaker 1: connect with the folks who have cut the cord, who

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Speaker 1: have never had cable. They're trying to find new ways

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Speaker 1: to reach customers. They have Snapchat, Sports Center now They're

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Speaker 1: going to where they think the younger demographic is. The

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Speaker 1: question is now can to monetize it? And all Star

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Speaker 1: Wars shows like Mike and Mike it's over now because

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Speaker 1: they signed off. They're trying to bring in brand new

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Speaker 1: programming to the show. And I'm sorry you about to

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Speaker 1: say something. Yeah. The ESPN Plus, their O T T service,

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Speaker 1: is going to launch next year. They keep pushing it back,

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Speaker 1: but right now I think August is the is the launchtime. Uh.

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Speaker 1: That is going to be a pretty massive announcement and

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Speaker 1: a massive unrolling for ESPN. That is their future. It

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Speaker 1: has to be, you know, as Scott said, as people

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Speaker 1: cut the cord, as more people shy away from the

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Speaker 1: traditional cable model, ESPN Plus and the future iterations of

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Speaker 1: it have to be the future of ESPN, and we

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Speaker 1: have to see the math. We just don't know the math.

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Speaker 1: We knew what they were getting about seven bucks per

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Speaker 1: subscriber per month. They're down from a height of a

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Speaker 1: hundred something million now to eighty eight million. That's a

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Speaker 1: lot of money each month. What can they charge for

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Speaker 1: this O T T service? What's the programming going to be?

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Speaker 1: Will we get the major sports on there, will it

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Speaker 1: be niche sports? We just don't know, and they're not

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Speaker 1: sure if the revenue gap will be filled with this

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Speaker 1: OTC service. A lot of uncertainty at what we used

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Speaker 1: to be still is the worldwide leader, but for how long.

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Speaker 1: Another topic that is in the news FIFA, and it's

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Speaker 1: not a pretty one. There is a trial that's going

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Speaker 1: on in Brooklyn, New York, in federal court and we're

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Speaker 1: learning more about some of the seedy parts of FIFA. Well,

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Speaker 1: not only are we learning more about it, sponsors are

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Speaker 1: learning more about it. And that's the problem for FIFA.

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Speaker 1: As we are getting very close to the World Cup

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Speaker 1: being played in Russia, they are having a hard time,

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Speaker 1: uh finding companies to cut the checks. There can be

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Speaker 1: if the specter of reputational harm. You don't want to

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Speaker 1: align your brand with a damage brand like FIFA when

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Speaker 1: who knows what the next shoe is, if something else

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Speaker 1: is going to drop. Why would you pay your big

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Speaker 1: money put all your marketing dollars to this event when

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Speaker 1: you could be doing damage to your brand. I read

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Speaker 1: this today and it shocked me. You have to go

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Speaker 1: back to two thousand eleven for the last time that

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Speaker 1: FIFA signed a top tier sponsorship with an American or

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Speaker 1: a European company. You know, they're replacing a lot of

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Speaker 1: these companies with companies in Russia, which is hosting companies,

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Speaker 1: and Cutter, which is hosting companies in China, which really

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Speaker 1: really really wants to host UM. But you're just not

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Speaker 1: seeing a lot of the big time dollar spenders flowing

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Speaker 1: in from from Europe and Russia, Europe in America like

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Speaker 1: you used to. And that has to worry the folks

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Speaker 1: that FIFA. You know, you can't build your entire sponsorship

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Speaker 1: portfolio off of country companies from those three countries. It

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Speaker 1: just doesn't work. And the U s team isn't there,

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Speaker 1: so what's the impetus? You can't really attach your brand

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Speaker 1: to the the US players. That's the team that most US

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Speaker 1: audiences would tune in to see it's a problem. Let's

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Speaker 1: see if they can figure out a way to make

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Speaker 1: it an attractive property for advertisers. Let's talk about some

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Speaker 1: happy soccer in our third topic, Major League Soccer. Who

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Speaker 1: gets the expansion teams? Eben, go ahead, I know you

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Speaker 1: love your Major League Soccer. Yeah. MLS Commissioner Don Garber

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Speaker 1: announced that that the next two expansion teams are going

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Speaker 1: to come from either Cincinnati, Detroit, Sacramento or Nashville. It

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Speaker 1: is I'll be honest, it's hard to keep track of

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Speaker 1: the expansion that MLS is doing. It's happening so quickly.

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Speaker 1: L a f C will be launching next year. Their

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Speaker 1: talks with Miami to be four franchise. These two are

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Speaker 1: gonna be twenty five and twenty six. There's two more

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Speaker 1: coming in the next couple of years. As Garber has said,

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Speaker 1: this league is expanding very very quickly. Do the revenues,

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Speaker 1: the national revenues, justify what people are paying for these

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Speaker 1: franchises or are they looking forward? Saying that soccer will

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Speaker 1: grow because of the demand for live programming and the

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Speaker 1: expansion of digital younger demographic for MLS that they can

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Speaker 1: be very very important along O T T plays. Maybe

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Speaker 1: that's why people are investing. What I found interesting in

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Speaker 1: Sacramento is one of the favorites to get one of

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Speaker 1: these two teams, and Hewlett Packard's CEO, Meg Whitwin was

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Speaker 1: announced as an investor in that franchise a while back,

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Speaker 1: but we didn't see her now. So it's interesting to

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Speaker 1: see if what's going on there was some flux with

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Speaker 1: that ownership group, if in the end they have enough

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Speaker 1: to get it across the finish line to both gentlemen,

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Speaker 1: Will Major League Soccer one day become one of the

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Speaker 1: five now the fifth major food group in sports from baseball, football, basketball,

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Speaker 1: and hockey. Now, will we have soccer? I'm gonna keep

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Speaker 1: it short. Yes it will agree. Okay, now let's get

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Speaker 1: to our interview. Our guest today is a former captain

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Speaker 1: of the Harvard tennis team, a former a TP player

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Speaker 1: you actually want a tournament, a former commissioner of the

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Speaker 1: w t A and now commissioner of the PAC twelve.

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Speaker 1: Larry Scott. How are you, sir? I'm doing great. Thanks

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Speaker 1: for having me, of course, question for you, what is

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Speaker 1: first and foremost on your mind in the business of

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Speaker 1: sports these days. Wow, Well, there's a there's so much

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Speaker 1: going on UM in terms of you know, what you

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Speaker 1: deal with day to day in sports and never knowing

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Speaker 1: what you're going to wake up to. Of course in

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Speaker 1: a role like I'm in, you know, with the changing

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Speaker 1: dynamics of coaches, who've got coaches coming and going. We've

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Speaker 1: got all kinds of financial challenges that our universities and

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Speaker 1: their programs deal with. UM, all kinds of competitive issues,

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Speaker 1: you know, right now, it's around the college football playoff,

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Speaker 1: it's around basketball and how our teams doing early in

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Speaker 1: the season. But there's also existential issues and questions that

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Speaker 1: we're very focused on. And for me, I think the

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Speaker 1: two biggies are the collegiate model and the extent to

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Speaker 1: which UM we're able to preserve it in the light

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Speaker 1: and light of all the external threats and pressures and

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Speaker 1: lawsuits and people that would like to change the model. UH,

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Speaker 1: and the changing nature of the media industry is something

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Speaker 1: that we are deeply immersed in UM as we own

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Speaker 1: and control our own network and have important partnerships with

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Speaker 1: ESPN and Fox. UM spent a lot of time thinking

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Speaker 1: about that such a dynamic space and trying to understand

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Speaker 1: where it's going and preparing for that future. So you know,

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Speaker 1: one of the things I love about this role is

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Speaker 1: you know the day to day UM, you know, blocking

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Speaker 1: and tackling and issues that you have to deal wasn't

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Speaker 1: constantly beyond your toes. A lot of that's reactionary, but

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Speaker 1: the long term macro issues that you also have to

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Speaker 1: plan for strategically. You mentioned financial challenges of your member institutions.

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Speaker 1: What are the top one or two challenges that they face?

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Speaker 1: So there's significantly increasing costs of doing business for a

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Speaker 1: lot of our athletics departments. You know, there it's a

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Speaker 1: very very competitive landscape where um, you know, there's there's

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Speaker 1: there's a small market for the most elite coaches, keeping

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Speaker 1: up with facilities, support for student athletes, and our conference

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Speaker 1: supporting a lot of programs. So you know, we're a

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Speaker 1: conference that wins more national championships than any other. Most

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Speaker 1: of our universities support over twenty five different sports. We've

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Speaker 1: got some thirty five or thirty six different sports. UM.

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Speaker 1: And staying competitive nationally UM where you know, different in

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Speaker 1: arms race and really competitive market. UM. So there's a

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Speaker 1: lot of a lot of cost pressure and with a

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Speaker 1: regular desire to try to do more for student athletes,

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Speaker 1: whether it's the costs of scholarships, the increasing costs of tuition,

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Speaker 1: doing more in medical UH support for student athletes, nutritional

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Speaker 1: support for student athletes, more sports science and sports medicine. UM.

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Speaker 1: So the costs, there's pressure that the costs arise faster

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Speaker 1: than the revenues rise. So you're managing that is a

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Speaker 1: daunting challenge. And they need and the desire to find

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Speaker 1: new sources of revenue for our universities. Some of the

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Speaker 1: things that keep them awake at night that we try

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Speaker 1: to help with. Have you balanced the fact that obviously,

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Speaker 1: as a as a power of five conference, you have

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Speaker 1: some schools that are better off than others. That's just

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Speaker 1: kind of the way the conference is set up. The

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Speaker 1: problems that some of your schools may be having are

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Speaker 1: not problems that others are having. Is that a challenge

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Speaker 1: trying to figure out a solution and for everybody when

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Speaker 1: not everybody is starting from the same financial standpoint. Yeah,

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Speaker 1: that's the biggest in college sports goes UM. You know,

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Speaker 1: the concept of relativity affects everyone at different levels. So

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Speaker 1: you hear a lot about you know, the Big five

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Speaker 1: conferences you know, with the strongest football UH programs, and

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Speaker 1: the gap that might exist between them and some of

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Speaker 1: the smaller conferences are ones that don't have elite football

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Speaker 1: or don't play football at all. But then even you know,

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Speaker 1: we're in a conference like ours, we um you know,

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Speaker 1: we might have athletics departments with budgets you know, close

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Speaker 1: to a hundred and twenty million dollars a year and

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Speaker 1: athletics departments with eighty million dollars a year. UM. You know,

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Speaker 1: in different in addition to financial disparities, you know, we've

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Speaker 1: got schools in Los Angeles and we've got schools in

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Speaker 1: rural markets. UM. So there's a lot of differentiation and

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Speaker 1: and disparities between universities, more so on college sports than

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Speaker 1: in pro sports. And the challenge that presents for universities is,

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Speaker 1: you know, identifying what your strengths are, what your resources are,

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Speaker 1: picking your spots, you know, where you want where you

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Speaker 1: can compete with excellence, um and being disciplined about that. UM.

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Speaker 1: So there is a very very wide gap within conferences

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Speaker 1: in addition to as between conferences. We're talking here with

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Speaker 1: Larry Scott, commissioner of the PAC twelve conference, as you

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Speaker 1: just said that you deal with just within your conference,

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Speaker 1: schools that may have a forty million dollar difference in budget.

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Speaker 1: For the n c A as a whole, it obviously

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Speaker 1: deals with schools like a USC in your conference, and

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Speaker 1: it has to police those in the same way and

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Speaker 1: give schools regulations in the same way that it would

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Speaker 1: a much smaller community college uh in in California. As

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Speaker 1: you talk about kind of changes to the overall collegiate model, UM,

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Speaker 1: to what extent do you do you at all think

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Speaker 1: about a future without the n c A or a

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Speaker 1: breakup of figuring out some way for for for you

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Speaker 1: guys to police yourselves in a different way than a

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Speaker 1: school that has a tenth of the revenue or a

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Speaker 1: conference that has schools that are much much smaller than

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Speaker 1: yours has to act. Yeah, I think there's no reason

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Speaker 1: why there should know. He's be a role for the

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Speaker 1: n c A to provide national championships. UM, a centralized

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Speaker 1: governing body, UM you know that creates rules, UM you

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Speaker 1: know can can police them UM and other advocacy and

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Speaker 1: support for collegiate athletics. I think football is the area

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Speaker 1: where despite the biggest gaps and disparity and in football,

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Speaker 1: the biggest UH ten conferences have come together to create

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Speaker 1: the College Football Playoff. So everyone is still under the

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Speaker 1: umbrella of the n c A UM, but the meteorites

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Speaker 1: UH and the structure of postseason is really controlled by

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Speaker 1: the conferences for the biggest So I think we found

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Speaker 1: a good way to be under the big tent of

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Speaker 1: the n c A you know, with all the other

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Speaker 1: Division one schools UM, but not have that limit our

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Speaker 1: ability to structure the competition and manage the rights UM

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Speaker 1: in a way you know that allows us to be

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Speaker 1: progressive and you know, move from the bcs to college

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Speaker 1: football playoffs and designed the way we've designed and not

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Speaker 1: get not get held back by institutions that you don't

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Speaker 1: have the resources or you know, don't necessarily see the

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Speaker 1: world the same way. So football is really a great

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Speaker 1: example of where we've been able to be progressive and

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Speaker 1: advance and be responsive to fans UM and continue to

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Speaker 1: fuel the immense popularity of the sport while still being

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Speaker 1: me the ambrell of the n c A. So I

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Speaker 1: think that's an interesting model going forward. The other big

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Speaker 1: development over the last few years was the creation of

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Speaker 1: a sub structure UM that we refer to as autonomy

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Speaker 1: for the Big five conferences to make legislative decisions when

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Speaker 1: it comes to the type of support for student athletes

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Speaker 1: you might want to provide. Select the five conferences. Sixty

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Speaker 1: five schools within the five conferences can make decisions outside

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Speaker 1: the structure of the n c A when it comes

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Speaker 1: to the value of a scholarship or whatever the financial

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Speaker 1: support you want to provide. So I think that was

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Speaker 1: a recognition that you know, one size fits all doesn't

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Speaker 1: make sense in every area, and that the realities are

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Speaker 1: different for schools with more resources, and if they want

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Speaker 1: to do more to support student athletes and schools they

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Speaker 1: can't afford to, we shouldn't be held back. So I

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Speaker 1: think we found a way to be somewhat flexible yet

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Speaker 1: still part of the n c A. Larry, one of

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Speaker 1: the biggest news coming out of college sports in the

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Speaker 1: past few months, obviously, was the Department of this UH

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Speaker 1: their release about their investigation into kind of the black

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Speaker 1: market for players and shoe companies within college basketball. Of

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Speaker 1: the schools that were named, obviously a few of them

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Speaker 1: were in your conference. I'm curious about how catastrophic or

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Speaker 1: how big a deal you think that may have on

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Speaker 1: on college sports and college basketball. I guess more specifically,

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Speaker 1: is that as as big a land shifting as some

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Speaker 1: people made it out to be. Yes, we're really concerned

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Speaker 1: by what we've seen as a result of the FBI investigation.

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Speaker 1: You know, I think the issues are significant and we're

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Speaker 1: concerned about them. We so much so that we UM

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Speaker 1: have decided to create a task force that's going to

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Speaker 1: look deep or beyond what we left from the FBI.

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Speaker 1: We were gonna, you know, investigate, look into it more so.

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Speaker 1: I've got some former coaches, UM, industry veterans, former student athletes,

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Speaker 1: UM participating. We're doing deep dive into some of the issues.

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Speaker 1: Were recruiting the world shoe companies agents, uh these tie

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Speaker 1: so thinks, and then the whole one and done scenario

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Speaker 1: in college bastballs because we are concerned that basketball is

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Speaker 1: out of whack with some of the other sports and

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Speaker 1: conducive to elements and cheating that you don't want to see,

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Speaker 1: uh in college sports. I think out of this will

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Speaker 1: come in addition to wherever the FBI gets too in this,

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Speaker 1: and there have been indictments and UM, that's that I'm

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Speaker 1: going across in addition to what they uncover. I think

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Speaker 1: you'll see the leaders in college sports, and I think

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Speaker 1: we're going to be the forefront of it, with others

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Speaker 1: um going further and using this as an opportunity to

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Speaker 1: create reform that tries to clean up college basketball, the

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Speaker 1: recruiting environment, and some of that may involve, you know,

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Speaker 1: the role of shoot companies in AU basketball, uh and

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Speaker 1: other things that I'm hoping that it also in the

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Speaker 1: NBA and the NBA Players Association revisiting the whole one

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Speaker 1: and done rule. We'd like to see a world where, uh,

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Speaker 1: the young phenom that really only wants to play in

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Speaker 1: the NBA is no interest in going to college, is

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Speaker 1: able to go straight to the NBA or the NBG

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Speaker 1: league UM and doesn't have to, you know, go to

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Speaker 1: university for a year. But that's that's a decision and

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Speaker 1: a rule governed by the Indian and Players Association, by

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Speaker 1: their collective bargaining. Ryman, let me jump in the lader.

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Speaker 1: Let me ask you, is there credence to the Devil's

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Speaker 1: advocate that already, however, that you're being reactionary instead of proactive.

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Speaker 1: If it was true that this was an open secret,

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Speaker 1: everybody's sort of known this is how the business of

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Speaker 1: big time college basketball has worked for a long time. Yeah,

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Speaker 1: I think it's new. Um. In addition to you know, uh,

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Speaker 1: according the FBI is a federal crimes, not just any

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Speaker 1: c A violations. UM. I think some light has been

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Speaker 1: shown on the role of agents financial planners and the

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Speaker 1: fact that payments are being made to steer and direct

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Speaker 1: prospects or current student efforts to the unise agents and

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Speaker 1: financial advisors. I think, I think the complexity of it,

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Speaker 1: the extent of it, and and some of the tactics. UM.

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Speaker 1: You know, it's new to some people as a result

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Speaker 1: of this, but you know, sometimes you need to wake

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Speaker 1: up call like this too, um to cause people to

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Speaker 1: want to make some significant change. So you know, whether

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Speaker 1: it's this is really new information for people, or whether

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Speaker 1: it's just gotten to the point where they realize the

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Speaker 1: seriousness of it. UM. You know, I'm not sure. So

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Speaker 1: what I do know is I think there's an opportunity

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Speaker 1: now to make some more systemic reform. And there have

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Speaker 1: been plenty of people in the wake of these allegations

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Speaker 1: who have said that this is the reason a exhibit

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Speaker 1: a why players should be paid or given a little

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Speaker 1: bit more of the revenue pie, the idea being that

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Speaker 1: maybe if if they had more compensation, they wouldn't have

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Speaker 1: to fall victim too, or would not be enticed by

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Speaker 1: by bribery and stuff like that. I take it I

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Speaker 1: have a hunch that that you don't fully agree with that,

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Speaker 1: But I'm curious as to how much you think the

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Speaker 1: system does need to be changed. I mean, specifically, what

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Speaker 1: can you do in lieu of paying them, what can

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Speaker 1: be done to kind of help put this in the

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Speaker 1: rear view mirror. Yeah, well, first of all, yeah, I

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Speaker 1: feel the opposite of those that, uh would make the

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Speaker 1: point you made. I'd say, this is an example of

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Speaker 1: what you don't want, and you don't want more of this,

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Speaker 1: and you don't want an open market or young high

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Speaker 1: schoolers or you know, being paid to be directed to

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Speaker 1: go to certain schools or work with agents. Um. You

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Speaker 1: know what I'd like to see happen is the India

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Speaker 1: and the India Players Association change their rules so that

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Speaker 1: those young high school phenomens that don't have interest in

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Speaker 1: going to college, don't have interest in growing up as

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Speaker 1: young men on their own. Um. Uh, A little of

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Speaker 1: other people, um having a chance to study, you know,

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Speaker 1: spread their spread, their wings developed as young adults. Those

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Speaker 1: that aren't interested in that aren't forced to have to

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Speaker 1: go to college just to pursue their NBA dream. We'd

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Speaker 1: be delighted if they have the opportunity to go straight

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Speaker 1: to the NBA. What we want is those that choose

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Speaker 1: the scholastic path, those that see value uh in going

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Speaker 1: to play college basketball UH and get the experience of

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Speaker 1: college and want to be better prepared for life after,

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Speaker 1: whether involves basketball or not. Go to university and stay

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Speaker 1: for three years like happens in football, like happens in baseball,

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Speaker 1: and they have a chance if they want to get

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Speaker 1: a degree, uh, to study and to mature and develop. Um.

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Speaker 1: That's what I'd like to see, I think, you know,

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Speaker 1: I hope that's realistic. It's not something college controls. Unfortunately,

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Speaker 1: it's governed by collective bargaining agreements negotiated between the NBA

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Speaker 1: and the NBA players and and the NBA best ball outliers.

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Speaker 1: You know, football's gotten got a good system, Baseball has

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Speaker 1: got a good system. Hockey's got a good system. Basketball

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Speaker 1: does not. So we're calling on the NBA NBA Players

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Speaker 1: Association to make a change and step up UM. At

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Speaker 1: the same time, I think we have to self examine UM.

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Speaker 1: You know, how recruiting takes place, and it happens with

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Speaker 1: heavy influencer and shoot companies that are involved in any

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Speaker 1: basketball and college has let the recruiting environment get away

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Speaker 1: from high school gyms, took places like Las Vegas and

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Speaker 1: Atlanta and commercialized events which are breeding run for the

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Speaker 1: commercial interests and into mediary So I think it's a

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Speaker 1: combination of things. I don't think it ain't still a

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Speaker 1: bullet but I think if the NBA and the Players

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Speaker 1: Association address one and done and come up with a

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Speaker 1: more responsible system, and uh if college looks at the

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Speaker 1: recruiting environment and gets recruiting cap and one of the

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Speaker 1: high schools with high school coaches, UM, you know, with

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Speaker 1: more transparency and away from private gyms and commercial interests

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Speaker 1: running tournament sponsored by shoot companies. I think goes to

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Speaker 1: the two major steps. Let's talk with what I think

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Speaker 1: is near are and dear to your heart. New media.

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Speaker 1: You are out front. You want to go global and

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Speaker 1: you see digital, you see Facebook, Twitter, Amazon as ways

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Speaker 1: of accomplishing that. Where do you want to be and

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Speaker 1: how do you want to get there? Well? And part

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Speaker 1: of the reason we see it is, you know, we're

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Speaker 1: based here in San Francisco on the West Coast, and

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Speaker 1: we don't have to look for a lot of the

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Speaker 1: innovation happening in media and technology is in our backyard

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Speaker 1: with alumni. And part of your rebrand was all about

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Speaker 1: being on the West coast. You said, let's utilize that

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Speaker 1: as a positive. Yes, you know when I'm I'm an

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Speaker 1: East Coaster from New York originally and moved out here

399
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Speaker 1: in two thousand nine take over his commissioner at pat

400
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Speaker 1: Tennis at time, and he has a lot of talk

401
00:22:41,160 --> 00:22:44,120
Speaker 1: about East Coast media bias, and I was like, hey,

402
00:22:44,359 --> 00:22:46,320
Speaker 1: things are pretty awesome out here. Let's talk about the

403
00:22:46,400 --> 00:22:49,960
Speaker 1: West Coast advantage, uh, that we have here in San

404
00:22:50,040 --> 00:22:55,000
Speaker 1: Francisco up through Seattle. UM, you know, the leading technology

405
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Speaker 1: hub in our country, if not around the world, l A,

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00:22:58,320 --> 00:23:02,120
Speaker 1: the entertainment capital of the amazing you know, things going

407
00:23:02,200 --> 00:23:06,960
Speaker 1: on out here, companies like Apple, like Amazon, like Nike,

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Speaker 1: you know, you know, very cutting edge, looking to the future,

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00:23:10,480 --> 00:23:13,040
Speaker 1: and our conference should really be a meshed in that.

410
00:23:13,160 --> 00:23:15,919
Speaker 1: So when it came to doing our media deals, UM,

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Speaker 1: in addition to having fantastic strategic partnerships with the SKN

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Speaker 1: and Fox and benefiting from their platforms and the resources

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Speaker 1: they provide us from an exposure and revenue standpoint, all

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Speaker 1: their marketing muscle, which is significant. We very much felt

415
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Speaker 1: that owning and controlling your content is going to be

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Speaker 1: essential going forward, you know, rapidly changing landscape where technology

417
00:23:38,600 --> 00:23:43,720
Speaker 1: is disintermediating and fans want to connect in new and

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Speaker 1: different ways all the time. Owning and controlling your content

419
00:23:48,520 --> 00:23:50,960
Speaker 1: allows you to be nimble and to evolve with that

420
00:23:51,200 --> 00:23:55,359
Speaker 1: and test and to understand what your consumers want. So

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00:23:55,480 --> 00:23:57,960
Speaker 1: that that decision was taken back in two thousand eleven,

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Speaker 1: and we launched the pack Fell Network with eight hundred

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Speaker 1: of live events and digital platforms and apps starting in

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Speaker 1: two thousand twelve. Uh And and that was the thesis

425
00:24:06,680 --> 00:24:09,040
Speaker 1: back then. I couldn't have imagined, however, that the world

426
00:24:09,119 --> 00:24:12,440
Speaker 1: would change as rapidly as it hasn't you know, sitting

427
00:24:12,480 --> 00:24:17,080
Speaker 1: here two thousand seventeen, Amazon broadcasting an NFL package and

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00:24:17,200 --> 00:24:19,680
Speaker 1: Facebook Lives doing events with us, and we're doing events

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Speaker 1: with Twitter. Um And the other part that you mentioned

430
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Speaker 1: is being here on the West coast when when we

431
00:24:25,280 --> 00:24:28,840
Speaker 1: look out, we look west, not east. So not only

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00:24:28,880 --> 00:24:31,080
Speaker 1: do we look to you know, the leading technology and

433
00:24:31,160 --> 00:24:34,200
Speaker 1: media players out West, but we look to the Asia

434
00:24:34,240 --> 00:24:37,320
Speaker 1: Pacific region. And we have a deal with Ali Baba, Yes,

435
00:24:37,440 --> 00:24:41,120
Speaker 1: when we just extended it through four where not only

436
00:24:41,520 --> 00:24:44,440
Speaker 1: are they helping us bring events over to China which

437
00:24:44,480 --> 00:24:47,359
Speaker 1: are amazing opportunities for student athletes and for our schools,

438
00:24:47,560 --> 00:24:51,000
Speaker 1: that they're distributing a hundred and seventy five of our

439
00:24:51,119 --> 00:24:55,080
Speaker 1: events live on their digital platform. Uh. And that that's

440
00:24:55,119 --> 00:24:57,720
Speaker 1: just the beginning. So you know, it's an increasing week

441
00:24:57,720 --> 00:25:03,440
Speaker 1: global world and market play. The strongest American brands, including

442
00:25:03,640 --> 00:25:09,120
Speaker 1: you know, some of our university brands are popular of interest. Uh,

443
00:25:09,280 --> 00:25:14,760
Speaker 1: some of our sports like basketball, soccer, swimming, track and field. Uh,

444
00:25:14,920 --> 00:25:16,359
Speaker 1: you know in the market like China and others in

445
00:25:16,400 --> 00:25:19,440
Speaker 1: Asia where they're very folcused on the Olympics, love basketball

446
00:25:19,880 --> 00:25:23,119
Speaker 1: of increasing demand and yet we're seeing a lot of

447
00:25:23,200 --> 00:25:28,119
Speaker 1: traction and a lot of interest in Um, the product

448
00:25:28,840 --> 00:25:31,879
Speaker 1: is distribution a challenge. Having the content is one thing,

449
00:25:32,359 --> 00:25:34,360
Speaker 1: having deals as another. But you've got to have people

450
00:25:34,440 --> 00:25:38,520
Speaker 1: carry it. I assume though, as other content providers have

451
00:25:38,640 --> 00:25:42,320
Speaker 1: found out, distribution isn't always easy. Yeah, I think yes,

452
00:25:42,359 --> 00:25:47,639
Speaker 1: and no we've got over seventy five different distribution partners. UM.

453
00:25:47,680 --> 00:25:50,480
Speaker 1: I think if you've got quality content, UM, Hero is

454
00:25:50,560 --> 00:25:53,000
Speaker 1: gonna you know, do fine. You know, when it comes

455
00:25:53,040 --> 00:25:56,119
Speaker 1: to distribution, which we do. We were careful to make

456
00:25:56,160 --> 00:25:58,920
Speaker 1: sure we're thirty five football games on the PAC twelve networks,

457
00:25:58,960 --> 00:26:02,080
Speaker 1: and and so we've got great deals with Comcast and

458
00:26:02,520 --> 00:26:06,200
Speaker 1: Charter and Cox and Dish, um and uh you know

459
00:26:07,160 --> 00:26:12,160
Speaker 1: eight uh proximately eight in total. UM so many many

460
00:26:12,240 --> 00:26:16,119
Speaker 1: other smaller ones in the mid sized distributors. But there

461
00:26:16,119 --> 00:26:18,840
Speaker 1: are certain ones we've we've struggled with. It's hard to

462
00:26:18,880 --> 00:26:21,840
Speaker 1: be an independent. We felt strongly that we wanted to

463
00:26:21,960 --> 00:26:27,600
Speaker 1: keep control ourselves, be independent alongside the license deals are

464
00:26:27,600 --> 00:26:30,920
Speaker 1: did with ESTN and Fox. And we're certainly going for

465
00:26:31,040 --> 00:26:33,640
Speaker 1: a phase these potendial you know, I've seen swing back

466
00:26:33,680 --> 00:26:36,719
Speaker 1: and forth. Right now, it's certainly swinging in a direction

467
00:26:36,800 --> 00:26:40,399
Speaker 1: of consolidation. And with consolidation, if you're not part of

468
00:26:41,800 --> 00:26:45,200
Speaker 1: a family of brands and content, you know, it's they're

469
00:26:45,200 --> 00:26:49,480
Speaker 1: they're they're big uh entities lining up on the distribution

470
00:26:49,560 --> 00:26:55,200
Speaker 1: side to get scale. And there's big entities amassing properties

471
00:26:55,480 --> 00:26:58,320
Speaker 1: on the programming side to a mass scale. And leverage.

472
00:26:58,320 --> 00:27:01,920
Speaker 1: So if you're an independent, there are of course challenges

473
00:27:01,920 --> 00:27:04,159
Speaker 1: because you don't have the same leverage that others have.

474
00:27:04,320 --> 00:27:06,680
Speaker 1: But we've very much got a long term view, and

475
00:27:06,800 --> 00:27:11,000
Speaker 1: I think you may see the pendulum swing again as

476
00:27:11,240 --> 00:27:16,400
Speaker 1: these uh you know, tech companies uh become major players.

477
00:27:16,600 --> 00:27:20,280
Speaker 1: Obviously Internet and broadband and the speeds and connections. It's

478
00:27:20,359 --> 00:27:22,720
Speaker 1: very much changed the world, and people aren't going to

479
00:27:22,760 --> 00:27:26,320
Speaker 1: be reliant going forward on you know, the satellite dish

480
00:27:26,400 --> 00:27:29,200
Speaker 1: that someone hammers into your roof, or the cable pipe

481
00:27:29,359 --> 00:27:31,639
Speaker 1: coming into your house. You know, all you need is

482
00:27:31,680 --> 00:27:35,640
Speaker 1: a broadband connection. Is gonna be an explosion in terms

483
00:27:35,640 --> 00:27:37,480
Speaker 1: of the number of services that you can be offered,

484
00:27:37,520 --> 00:27:39,960
Speaker 1: and and that's good for consumers. As you talk about

485
00:27:39,960 --> 00:27:42,639
Speaker 1: the West Coast advantage, there's also in some ways a

486
00:27:42,720 --> 00:27:45,240
Speaker 1: small disadvantage. I hear from a lot of schools about

487
00:27:45,440 --> 00:27:48,879
Speaker 1: kickoff times for football on the West Coast. Obviously your

488
00:27:48,920 --> 00:27:50,679
Speaker 1: games get pushed a lot later. A lot of schools

489
00:27:50,720 --> 00:27:53,159
Speaker 1: don't like that. I'm curious about how much that is

490
00:27:53,280 --> 00:27:56,639
Speaker 1: driving your look at new media. When you look at

491
00:27:56,720 --> 00:27:59,679
Speaker 1: that the Amazons and the twitters and the Facebook's, uh,

492
00:27:59,800 --> 00:28:02,600
Speaker 1: they don't have kind of the demands on kickoff times

493
00:28:02,640 --> 00:28:04,840
Speaker 1: that maybe ESPN or Fox does, and I know that

494
00:28:04,920 --> 00:28:08,440
Speaker 1: that's increasingly becoming a pain point for schools. Yeah, I think.

495
00:28:08,560 --> 00:28:13,159
Speaker 1: I think it's really attention between what's the ideal for

496
00:28:13,440 --> 00:28:16,159
Speaker 1: the fan that buys the ticket that shows up to

497
00:28:16,200 --> 00:28:22,680
Speaker 1: the game, versus what's ideal from a television viewership or

498
00:28:22,800 --> 00:28:26,720
Speaker 1: more media viewership perspective, and what's in the interests of

499
00:28:26,880 --> 00:28:30,879
Speaker 1: the media companies. What we've found is that, you know,

500
00:28:31,200 --> 00:28:35,200
Speaker 1: the advantage we have with the time zone is that

501
00:28:35,320 --> 00:28:37,840
Speaker 1: if we kick off late in the afternoon or early evening,

502
00:28:38,840 --> 00:28:43,080
Speaker 1: we've gotten your exclusivity and we capture huge market share

503
00:28:43,240 --> 00:28:47,040
Speaker 1: amongst college football fans. Whereas, if we kick off in

504
00:28:47,040 --> 00:28:48,800
Speaker 1: the middle of the day, which is the ideal time

505
00:28:49,000 --> 00:28:51,880
Speaker 1: for many of our fans that want to attend our games,

506
00:28:52,280 --> 00:28:54,880
Speaker 1: EURO up against on any given Saturday, forty other games

507
00:28:55,560 --> 00:28:58,960
Speaker 1: UM and SEC games, ACC games, and the market is very,

508
00:28:59,200 --> 00:29:02,040
Speaker 1: very fragment. So what we found is that our ratings

509
00:29:02,080 --> 00:29:06,160
Speaker 1: are highest and therefore our value is highest from a

510
00:29:06,240 --> 00:29:10,320
Speaker 1: media perspective, when we play in late windows where we

511
00:29:10,400 --> 00:29:15,680
Speaker 1: can capture much greater market share UM. But that the

512
00:29:15,800 --> 00:29:19,960
Speaker 1: rub is UM too many of those games you know,

513
00:29:20,040 --> 00:29:22,880
Speaker 1: if your season ticket holder at one of our schools,

514
00:29:23,200 --> 00:29:25,400
Speaker 1: it may not be the ideal time for you because

515
00:29:25,480 --> 00:29:27,640
Speaker 1: you like the day games or you don't want to

516
00:29:27,640 --> 00:29:29,960
Speaker 1: get home late at night. So that's what we're working

517
00:29:30,000 --> 00:29:33,320
Speaker 1: our way through. How we find the right balance between

518
00:29:33,400 --> 00:29:37,320
Speaker 1: maximizing value and exposure which drives you to late kickoff

519
00:29:37,400 --> 00:29:40,680
Speaker 1: times with what the fans that come to the games want,

520
00:29:40,720 --> 00:29:43,240
Speaker 1: which is earlier kickoff times. And Larry, let's end it

521
00:29:43,320 --> 00:29:45,680
Speaker 1: on this all this distribution in the thirst for content,

522
00:29:45,960 --> 00:29:47,880
Speaker 1: When does LaVar Ball get his own show on the

523
00:29:47,920 --> 00:29:50,880
Speaker 1: packs World network? So when I send it own show,

524
00:29:50,920 --> 00:29:52,880
Speaker 1: it's on. It's on Facebook, Pard, But I don't think

525
00:29:52,920 --> 00:29:55,680
Speaker 1: he'll be seeing a Pack twelve show anytime soon. Alright,

526
00:29:55,880 --> 00:29:58,120
Speaker 1: Larry Scott, Commissioner of the Packs Fell, thank you very

527
00:29:58,160 --> 00:30:01,880
Speaker 1: much for taking a few minutes. Thanks guys, you takeaways, Evan.

528
00:30:01,960 --> 00:30:05,120
Speaker 1: I listened to Larry Scott and he is an ardent

529
00:30:05,200 --> 00:30:09,960
Speaker 1: supporter of sort of the way things are not sure

530
00:30:10,720 --> 00:30:15,520
Speaker 1: if moving forward this sort of pay the players all

531
00:30:15,680 --> 00:30:19,040
Speaker 1: the revenue that's coming and everybody knows how much the

532
00:30:19,080 --> 00:30:22,040
Speaker 1: coaches are paying. We're seeing buyouts in twelve fifteen million

533
00:30:22,120 --> 00:30:26,440
Speaker 1: dollar ranges. How long can someone like Larry and those

534
00:30:26,480 --> 00:30:28,440
Speaker 1: who agree with him in college sports, and there are

535
00:30:28,520 --> 00:30:32,360
Speaker 1: a lot cling to that model where the players don't

536
00:30:32,440 --> 00:30:36,320
Speaker 1: receive serious compensation from the revenue they help generate. And

537
00:30:36,360 --> 00:30:39,600
Speaker 1: as he stays resolute in that regard, he's obviously very

538
00:30:39,720 --> 00:30:42,280
Speaker 1: open to the changes going on in media right now.

539
00:30:42,560 --> 00:30:45,320
Speaker 1: The Pact twelve has been on the foreground of deals

540
00:30:45,480 --> 00:30:48,800
Speaker 1: with deals with companies like Ali Baba with Facebook. He

541
00:30:49,000 --> 00:30:52,000
Speaker 1: is acutely aware of how digital media is changing. It's

542
00:30:52,080 --> 00:30:54,680
Speaker 1: changing the way his fans interact with his teams, how

543
00:30:54,760 --> 00:30:57,280
Speaker 1: his schools get their content out, and in that regard,

544
00:30:57,360 --> 00:30:59,680
Speaker 1: he's on the forefront. He's he's open to changes in

545
00:30:59,720 --> 00:31:03,400
Speaker 1: that so he knows what's new, but and he knows

546
00:31:03,440 --> 00:31:05,800
Speaker 1: the revenue that comes with it. But he wants to

547
00:31:05,840 --> 00:31:09,280
Speaker 1: cling the old model whereas the schools keep all the money.

548
00:31:09,400 --> 00:31:11,760
Speaker 1: That's what it boils down to, how do we share

549
00:31:11,960 --> 00:31:16,840
Speaker 1: the growing pie of money? And not surprisingly, an athletic

550
00:31:16,920 --> 00:31:19,880
Speaker 1: director would like to keep it within the university. Coffers

551
00:31:23,200 --> 00:31:25,240
Speaker 1: feels better to be number one than number five. I'll

552
00:31:25,240 --> 00:31:27,000
Speaker 1: wear a number because of Mike. We have a chance

553
00:31:27,080 --> 00:31:28,680
Speaker 1: to go for three in a row. Kids numbers at

554
00:31:28,720 --> 00:31:30,720
Speaker 1: a good time when I'd first started wearing the number,

555
00:31:30,840 --> 00:31:34,240
Speaker 1: how would just have the bloomberg business of sports? The

556
00:31:34,480 --> 00:31:38,840
Speaker 1: number of the week and even speaking of money going

557
00:31:38,920 --> 00:31:41,760
Speaker 1: into coffers that brings us to the number of the week.

558
00:31:41,880 --> 00:31:44,360
Speaker 1: And it's a big one this week. Seven hundred and

559
00:31:44,480 --> 00:31:49,200
Speaker 1: forty two thousand, seven hundred and sixty. I know you

560
00:31:49,440 --> 00:31:53,120
Speaker 1: know what that number represents because I told you earlier.

561
00:31:53,720 --> 00:31:58,920
Speaker 1: The number of World Cup tickets sold sounds big, but

562
00:31:59,120 --> 00:32:01,760
Speaker 1: historical compared us in not so much, right, Sure, I

563
00:32:01,800 --> 00:32:04,040
Speaker 1: think there's a number of factors here. Obviously. The first

564
00:32:04,080 --> 00:32:06,520
Speaker 1: thing that comes to mind, some of the biggest countries

565
00:32:06,560 --> 00:32:08,480
Speaker 1: are not there. The the US will not be there,

566
00:32:08,680 --> 00:32:10,880
Speaker 1: Italy will not be there, Chile, Netherlands, these are some

567
00:32:10,920 --> 00:32:12,880
Speaker 1: of the best teams in the world. They're not making

568
00:32:12,920 --> 00:32:16,000
Speaker 1: the trip. But another layer obviously the tournament is in Russia.

569
00:32:16,240 --> 00:32:18,280
Speaker 1: The last one was in Brazil, which might be a

570
00:32:18,360 --> 00:32:21,320
Speaker 1: bigger tourist draw for a lot of people, especially South

571
00:32:21,360 --> 00:32:23,440
Speaker 1: Americans who are soccer crazy. I think there are a

572
00:32:23,480 --> 00:32:25,360
Speaker 1: number of factors here, but yes, that number. If you're

573
00:32:25,680 --> 00:32:27,600
Speaker 1: part of FIFA, if you're part of the World Cup

574
00:32:27,720 --> 00:32:30,000
Speaker 1: organizing committee, you can't be happy with that, so you

575
00:32:30,040 --> 00:32:32,680
Speaker 1: have Russia. First makes sense, it's the host country. But

576
00:32:32,760 --> 00:32:35,320
Speaker 1: then a little surprising. Are you surprised that the number

577
00:32:35,400 --> 00:32:39,400
Speaker 1: two buyer of World Cup tickets right now is the US? Interesting?

578
00:32:39,600 --> 00:32:41,440
Speaker 1: And I wonder how many of those people already bought

579
00:32:41,480 --> 00:32:43,760
Speaker 1: tickets thinking, hey, maybe we'll be able to catch the U.

580
00:32:43,920 --> 00:32:47,280
Speaker 1: S game wherever it is, and then up shocker, a

581
00:32:47,360 --> 00:32:49,440
Speaker 1: month ago, there's not gonna be a U. S game.

582
00:32:49,520 --> 00:32:52,800
Speaker 1: But we should point out that the seven, seven hundred

583
00:32:52,840 --> 00:32:56,240
Speaker 1: and sixty, that's only the first wave of tickets. If

584
00:32:56,280 --> 00:33:00,840
Speaker 1: we compare that to what happened in Rio at about half,

585
00:33:01,360 --> 00:33:03,920
Speaker 1: that's got to be concerned, I mean half, and maybe

586
00:33:03,960 --> 00:33:06,680
Speaker 1: doubly concerning. The narrative coming out of Rio is that, oh,

587
00:33:06,800 --> 00:33:10,320
Speaker 1: Brazilians are notorious for being late in their decision making.

588
00:33:10,400 --> 00:33:12,240
Speaker 1: Brazilians who want to go to an event, they don't

589
00:33:12,280 --> 00:33:14,840
Speaker 1: buy tickets a week before, they buy tickets a day before.

590
00:33:15,080 --> 00:33:17,080
Speaker 1: That was the reason for the Rio numbers being so

591
00:33:17,200 --> 00:33:19,520
Speaker 1: low this far out, If for this far low, for

592
00:33:19,720 --> 00:33:22,080
Speaker 1: for Russia, that's a bigger issue. Al Right, The next

593
00:33:22,200 --> 00:33:25,320
Speaker 1: chance to get tickets December five, they go on sale.

594
00:33:25,640 --> 00:33:27,920
Speaker 1: You have been listening to Bloomberg Business of Sports. We

595
00:33:28,000 --> 00:33:29,680
Speaker 1: are here each and every week at the same time,

596
00:33:29,920 --> 00:33:32,720
Speaker 1: exploring the world of money and sports. I'm Scott Snik

597
00:33:33,000 --> 00:33:35,280
Speaker 1: and I'm Edman Novie Williams. Thanks for joining us. Please

598
00:33:35,320 --> 00:33:37,080
Speaker 1: tune in next week when we speak with the biggest

599
00:33:37,120 --> 00:33:39,520
Speaker 1: players in the industry. You're listening to Bloomberg Business of

600
00:33:39,560 --> 00:33:42,560
Speaker 1: Sports on Bloomberg Radio around the world and online as

601
00:33:42,560 --> 00:33:43,920
Speaker 1: an Apple podcast on iTunes,