Pac-12 presidents consider massive overhaul of conference structure, seek adviser for media strategy

Jon Wilner (MercuryNews.com)  —  Pac-12 presidents and chancellors are considering a major overhaul to “the entire structure and composition” of the conference, including “contract issues,” according to internal documents obtained by the Hotline.

The plans are outlined in a series of executive emails focused on hiring a media consultant who could be given the authority to work independently of commissioner Larry Scott and report directly to the presidents.

“The scope of work might dictate the consultant,’’ Oregon president Michael Schill wrote to Colorado chancellor Phil DiStefano and Washington president Ana Mari Cauce in June.

“If it just were a media deal than (sic) any of the three might work. However, if it is the entire structure and composition of the PAC 12 as we discussed on the call, then I wonder whether consultants whose main experience is from the business world would be appropriate.

“Our values go beyond maximizing revenue. Or, at least they did prior to the current financial issues.”

The window for decisions on the media strategy and Scott’s contract are narrowing.

Scott’s agreement expires in the middle of 2022, the same year negotiations on the next media rights partnership — “the most critical thing in the history of the conference” — are expected to begin.

Although the current deal with ESPN and Fox don’t expire until the spring of 2024, media rights deals are typically finalized at least 12 months in advance.

The networks are believed to have an exclusive negotiating window with the conference that begins in the late fall of 2022 or early winter of 2023.

Adding to the complexity is the fate of the Pac-12 Networks — the conference’s wholly-owned media division that is Scott’s brainchild but has drastically underperformed expectations in areas of audience and revenue.

“The conference has to get an independent look at all this,” said a source familiar with the president’s discussions. “Someone who doesn’t report to Larry Scott; someone who reports to the executive committee.”

For more than a year, the presidents have leaned on four Pac-12 graduates for informal advice on the conference’s media strategy. They are:

— Jeff Smulyan (USC), the CEO of Emmis Communications

— Jim Packer (Colorado), president of worldwide TV at Lionsgate

— Larry Sonsini (Cal), an attorney specializing in intellectual property

— Casey Wasserman (UCLA), chair of the Wasserman media group.

(Wasserman and Schill have a close relationship that dates to Schill’s tenure as a UCLA law professor, according to a source.)

The advisors recommended that the conference hire an independent consultant to examine not only the Pac-12’s media rights position ahead of the 2022 negotiations but the overall conference structure.

According to documents, their top choice for a consultant is Randy Freer, the respected former head of Fox Sports Media Group, Fox Network Group and, until January, the chief executive of Hulu.

Freer is well versed on Pac-12 media rights strategy, having led the Fox Sports negotiations with the conference (and ESPN) on the Tier 1 deal signed in 2011.

“We believe his executive leadership experience at Hulu and Fox Sports, as well as his knowledge of the industry, makes him a viable candidate,’’ Sonsini, one of the advisors, wrote to DiStefano, the Colorado chancellor.

(Freer could not be reached for comment.)

Sonini also addressed the reporting structure:

“We strongly believe that the consultant report directly to your Executive Committee but engage in discussions with Larry Scott.”

No consultant has been hired; nor have the presidents determined to follow that course of action.

Schill, the chair of the conference’s CEO Group, issued the following statement to the Hotline through the conference office:

“As part of our strategic media partner exploration process, the Pac-12 CEO Group and Commissioner consulted with a group of prominent alumni who have deep knowledge of university athletics and the media industry. We are extremely grateful for the time and effort these folks spent and for their candid advice. 

“As is the case with any advisory group, the views of these advisors are their personal views and do not necessarily reflect the views of the Pac-12 CEOs or the universities that make up the Pac-12.

“We continue to value their advice and support and as time goes by we will take into consideration the perspectives of a wide variety of stakeholders with respect to the future of the Pac-12 and the Pac-12 Networks.”

Through a conference spokesperson, Scott issued the following statement to the Hotline:

“I agree with the sentiments expressed by President Schill. We have strong alignment and optimism on the future of our media rights.”

Scott told the Hotline in February that he had not discussed his contract status with the presidents.

“There’s a lot going on that I’m excited about,” he said at the time, “and the alignment we’ve had (with the campuses) is as good as it’s been recently, if not ever.”

Weeks later, the pandemic forced the Pac-12 to shut down its basketball tournament and all spring competition.

Despite the havoc created on their campuses by Covid-19, the presidents and their advisors have been discussing the Pac-12’s next chapter since at least the late spring.

*** In an email to Colorado’s DiStefano in early June, Sonsini, one of the advisors, wrote:

(Bold added for reader clarity.)

“As discussed at the Pac 12 Executive Committee meeting, Jeff, Casey, Jim and I have conferred with respect to our recommendation for an independent party to be engaged in the assessment of the Pac 12 media rights and contract issues as well as the scope of review. We recommend the following:

“1. Recommendation: Our list at this time includes: Randy Freer, Goldman Sachs, McKinsey and Allen & Co. Of this list, we put Mr. Freer on top. We believe his executive leadership experience at Hulu and Fox Sports, as well as his knowledge of the industry, makes him a viable candidate. We believe Goldman Sachs has great experience but is more transactional oriented and they may be someone we engage if we have a transaction. We have not spoken directly with McKinsey nor Allen at this time. I note that Goldman also thought well of Mr. Freer.

“2. Scope: Once a consultant is selected, we think it is important to define the scope of the work and the related compensation. Our thought is to limit the scope at this time to canvassing the market, engaging in exploratory discussions, obtain data as to possible economic scenarios and strategies and to assess the competitive landscape. Inclusive of this scope would be information and thoughts on the status of the Pac 12 Conference as well as future challenges. No authority would be given at this time to engage in any transaction or the making of any proposals.

“3. Reporting: We strongly believe that the consultant report directly to your Executive Committee but engage in discussions with Larry Scott as well as we four advisors. All reports to you and the Committee should be kept confidential.

“4. Documentation: Once your Committee has decided on the consultant, we will be happy to help document the engagement and negotiate the compensation and scope of work. This would be done in coordination with Larry Scott.

“We certainly have not exhausted the list of other potential consultants and we have not engaged in discussions with Mr. Freer. However, the foregoing are our initial thoughts. We are happy to keep exploring but wanted to get these thoughts to you now. Also, we have not had any follow up conversations with Larry Scott but are happy to do so if helpful.

“Phil, let us know what more we can do at this time. We believe this is an important mission for the Conference and the timing critical. All the best. Larry Sonsini”

(Sonsini declined a request for comment by the Hotline.)

*** DiStefano received the email and within hours passed it along to his partners on the CEO’s executive committee, Schill and Cauce,

“Dear Mike & Ana Mari:

“I just received this email today from Larry Sonsini. I have not shared this email with Larry Scott. Should we discuss first and how do we involve our colleagues?”

(DiStefano was not immediately available for comment.)

*** Schill, who took over as chair of the CEO Group in July, responded to his colleagues, Cauce and DiStefano:

“My main concern with this is that the scope of work is not clear. And, the scope of work might dictate the consultant.

“If it just were a media deal than any of the three might work.

“However, if it is the entire structure and composition of the PAC 12 as we discussed on the call, then I wonder whether consultants whose main experience is from the business world would be appropriate. Our values go beyond maximizing revenue. Or, at least they did prior to the current financial issues.”

Exactly what Schill meant by “the entire structure and composition of the Pac-12” is not laid out in the emails.

The specifics have been kept within a tight circle of presidents and advisors, according to sources. However, the discussion likely includes a decision on conference leadership.

Scott has received high marks from the campuses for his stewardship of the conference through the pandemic, but only two members of the CEO Group that hired him, Arizona State’s Michael Crow and UCLA’s Gene Block, remain in the conference.

“The presidents have a tendency to want to avoid conflict and be collegial,” a source said. “But there are more voices … willing to express an opinion.”

Another source called Scott’s future and the media rights strategy “inseparable” issues.

If the presidents want Scott to formulate the strategy and lead the negotiations in late 2022 or early 2023, he would need a contract extension.

If the presidents want new leadership, then Scott’s contract must be bought out in order for a replacement to be hired in time to craft a strategy.

(The hiring process for commissioner-level positions can take more than six months.)

“If they’re going to make a change,” a source said, “the sooner the better so that someone can understand the conference and its strengths, weakness and complexities.”

mercurynews.com

__________

TrojanDailyBlog members  —  Always feel free to add information or topics to the TDB which don’t necessarily pertain to any particular moderator post or member comment.