Joe Ravitch, a partner and co-founder of the investment banking and advisory firm recently hired by the Pac-12 to help chart its future in the ever-evolving, has an interesting vision of the future media landscape of the conference.
During a 30-minute conversation about the future of sports media rights in general and the Pac-12’s options in particular, Joe Ravitch used a series of qualifiers.
“I’m not going to prognosticate today on how distribution will look.”
“I don’t know what the right business model will be.”
And so on.
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But Ravitch has a vision.
He gets paid to have a vision.
He’s getting paid by the Pac-12 to have a vision.
“What we’re doing here is creating an entity that goes beyond a couple football games, beyond a linear network, beyond DirecTV carriage,” Ravitch said.
“It’s an enterprise that has all the Pac-12 content on a global basis.”
Ravitch is a partner and co-founder of The Raine Group, the investment banking and advisory firm recently hired by the Pac-12 to help chart its future in the ever-evolving, ultra-lucrative media rights game.
Ravitch was part of the group that helped create the YES (Yankee Entertainment and Sports) Network and NBA China. He has done extensive business in Asia. He once worked for Goldman Sachs. He’s on the board of Vice Media.
All those stops, all those experiences, will shape his work for the Pac-12 as the conference navigates conflicting aims.
The jackpot is a half-decade away, but the campuses are in need of cash sooner than later.
To satisfy those issues, commissioner Larry Scott devised a plan by which the conference would create a holding company (‘Pac12NewCo’) for its media rights.
Everything currently available through ESPN, Fox and the Pac-12 Networks would be bundled, then sold when the current contracts expire in 2024.
But the conference wants a strategic partner for that long-term endeavor — a partner that would own a portion of ‘Pac12NewCo’ in exchange for an up-front payment of hundreds of millions of dollars that would be funneled to the schools.
That’s where Ravitch comes in.
He’s not the long-term strategic partner; he’s the short-term advisor helping the conference find the long-term partner and establish the business model that would maximize its position for rights negotiations in advance of 2024.
In that role, Ravitch’s view of the future media landscape matters a great deal.
“I’m not going to prognosticate today on how distribution will look,’’ he said. “I just know the value (of sports rights) is growing and the competition will be fierce.”
* In Ravitch’s vision, Over-The-Top rules the world in a few years and linear TV is an afterthought.
“Amazon is 100 percent focused on sports. Apple is looking at sports rights deals. Look at ESPN+,’’ he said. “The OTT wars are just starting.”
* In Ravitch’s vision, the ‘Pac12NewCo’ — the Oregonian was the first to report the plan — could not only sell but acquire rights … and do so both domestically and internationally.
The Pac-12 presidents, don’t forget, have cast an eye to Asia for branding, athletic and educational initiatives.
“It could become a really big company internationally,” Ravitch said. “We’re creating an entity that thinks about long-term value creation … for the universities.”
* In Ravitch’s vision, ‘Pac12NewCo’ is an entity “that could someday go public.”
It’s a whopper of a vision, for sure, but the incredible changes in technology and consumer consumption of the past five years auger a future media landscape where anything’s possible.
At its core, Ravitch’s vision is based on one fact and one theory.
Fact: The Pac-12 will have every football, men’s basketball and Olympic sports event — more than 900 in total — available for sale at the negotiating table in a few years.
Theory: “By 2021-22,” Ravitch said, “Over-The-Top will be the dominant form of distribution.”
I listened to Ravitch lay out his vision, then asked a series of questions.
Hasn’t the marketplace already spoken? The only Pac-12 content with real value is the premium football package currently owned by ESPN and Fox. There doesn’t appear to be much demand for all the inventory on the Pac-12 Networks. Do you see that dynamic changing in some fashion?
“What the Pac-12 has,” he responded, “is a massive amount of tonnage, and SVoD (Subscription Video on Demand) is for cult audiences. Think about Netflix. So it becomes about attracting cult audiences in sports.
“There are a ton of ways to slice and dice the (Pac-12) content. There are an infinite number of ways you can license the content to Amazon or OTT.
“All the Tier 2 events (Olympic sports) that don’t rate on broadcast television? There’s room for those in the OTT world.
“The future is all about smaller sports (packages) and the ability to slice and dice, so you’ve got, let’s say, Colorado games for $10 a month for fans living anywhere.
“If it’s done right, maybe you get Pac-12 basketball games on Tencent,’’ he added, referring to the Chinese internet giant.
“A lot of decisions need to be made,’’ Ravitch said. “But more important is who the partner is.
“I’m very optimistic about a deal. It’s a matter of who wants it and who appreciates it. And do we bring in a distributor into the company as a partner, or stay neutral?”
His best guess on when the Pac-12 will have clarity on its options and be in position for a decision.
“End of May.”
The next few months, and year, will be fascinating.