Podcast Alert: Larry Scott- Pac-12
Episode recorded in June 2021, prior to the ending of Larry Scott’s Commissioner term.
Larry Scott – Former Commissioner of the Pac-12 – joins the show to talk about his experience leading a Power 5 conference, including his biggest successes and greatest challenges from the past 12 years on the job.
He and AJ discuss the Pac-12 Network, the reality of NIL, and how we almost saw a Pac-16 super conference in 2010 with the potential additions of Big 12 powerhouses like Texas and Oklahoma.
Transcript
+^Larry Scott: [00:00:00] I certainly think some of the same fundamentals that have made our campuses so great over the years are still there. You know, amazing schools, attractive locations, high-quality people, strong traditions.
AJ Maestas: Hello, and welcome to the navigating sports business podcast. I’m your host AJ Maestas, founder of Navigate, a data-driven consulting firm, guiding major strategies and decisions in sports and entertainment. We started this podcast hoping to share the interesting stories and experiences of the amazing people we get to work with at Navigate.
And even though they’re visionaries and famous in many instances, [00:01:00] their true stories aren’t often heard since they’re not on the playing field. Our hope is you get to know them better and learn from them as we have.
Today, I’m happy to be joined by Larry Scott commissioner of the Pac-12. How you doing, Larry?
Larry Scott: I’m doing great AJ good to be with you.
AJ Maestas: Good. Glad to have you. I’m really grateful for you joining us here today. Just for listeners that don’t know your background, you started, most of your sports connections are in tennis, right?
You played and were an All-American at Harvard. You played professionally and then went on to be the chief operating officer of ATB properties later, the chairman and CEO of the women’s tennis association and the WTA. Massively expanded revenue and the sport, a number of different ways, the broadcast and network partners and sponsorships, and what have you, and then became the commissioner of the Pac-12 and 2009, where you expanded the conference and added a championship game and signed a big new TV deal.
So that’s just for everyone who might not know your [00:02:00] whole or quicker at let’s call it truncated, resume. Any, anything I missed there, anything I should.
Larry Scott: No, you got all the major points. Thank you.
AJ Maestas: Yeah. Well, there’s other cool stuff. I mean, you lived in Europe and speak French and all this kind of cool stuff, but I’m hoping that comes up naturally.
So pack 12, you know, that’s a passion of mine. So, I would love to start there. You expanded the conference to 12 schools about a year after you joined as commissioner. I’d love to know what that process was like. Do you mind giving us an inside look at what happened?
Larry Scott: Not at all. You know, I was recently looking back as I’m getting ready to step down at those early years, looking at emails and files, and especially given what it’s like right now, as I’m ready to hand the Baton to my successor, I actually consider myself pretty fortunate that things were relatively calm when I started in July of 2009.
I had a period of time to really map out a strategic plan, do my hundred-day visits with all the campuses, and kind of plan an [00:03:00] offense in terms of what we wanted to do as a league, you know, fast forward to what it’s like now. And there’s a lot of defense going on and reacting to things outside of our control, but on that strategic plan that we developed in my first few months, In addition to focusing on an upcoming TV negotiation and other things we wanted to do in terms of the marketing and positioning of the League, expansion was on that list.
You know, I wasn’t the first one, certainly to consider expansion for the league as long history for the Pacific Coast Conference Pac-8 Pac-10. And there were different times when the league had flirted with Texas and Oklahoma. So, these weren’t new ideas, but they were dormant. And as part of that process, it became clear that our members were supportive of expanding under the right circumstances.
And we spent a lot of time determining what would represent growth and be worth moving from 10 to 12. So, you know, we developed [00:04:00] the whole list of criteria, academic and cultural fit. What would be credible In terms of markets and the fan base, what would add to our television value? What would add to our football and basketball prowess, things like that?
And we were kind of ready to consider it on our own timetable, leading up to television negotiations. But we did have to wreck. Thankfully, we had a plan because Jim Delaney at the big 10 good friend kind of started the well that latest wave of expansion -mania. When he started talking to Nebraska Maryland, other leagues, and we were, we were ready with a few different options, iterations, everything before.
Pac-12 up to a Pac-16, which really almost came to fruition. So, you know, as I think I look back we had the benefit of strategic planning kind of being ready, but we also had to be nimble and [00:05:00] opportunistic when the wheels started going in motion with some other leagues.
AJ Maestas: Yeah. We have this cheesy saying it, navigate that winners prepare more, but that’s a that’s a perfect example.
Right? The catalyst was the big 10 and Jim Delaney is action. Looking at expansion and taking action. And if you had not had a playbook, you’d start that entire strategic process at that moment in a rushed state. So good for you. You hinted it Pac-16. And I just assumed that the catalyst or motivation was the next TV deal, but it sounding otherwise.
Do you mind sharing what would have been at pack 1216 and how it ended up?
Larry Scott: It was pretty well-publicized, and we had deep discussions with Texas and Oklahoma. About the idea of six big 12 schools joining our league, that would have been Colorado, Texas, Texas A&M, Oklahoma, Oklahoma state, Texas tech that would have really allowed us to have a lot more heft from a market perspective, the states of Texas and California to dominant [00:06:00] schools and those markets, you know, Western Eastern divisions as well thought through in a way that could mitigate student-athlete travel, but really give us the benefit of multiple times over. You know, a much bigger fan base television markets, et cetera.
And then the timing was tied to TV to be clear when it really makes sense to expand, like after you did a TV deal and then had to go back to a partner to renegotiate existing terms, it was felt that the best way if you were going to expand would be to do. Before going to market with your television rights, that would be the best way to maximize it.
You know, hence some of the timing considerations,
AJ Maestas: I’m going to keep asking about this for a second because I think we’re in one of those moments again, here come a bunch of the major TV deals for the major, you know, for the power five conferences and the CFP, you know, is it’s clear. It’s going to expand to 12 members, which.
The dynamics and scheduling. And what gets you access to that, you know, play off versus it only being for you have to run a pretty flawless season to get in that, right? As one of the. [00:07:00] So, if you don’t mind sharing what happened, what prevented it from being 16 and how did Utah enter the conversation?
Because as we all know, it ended up being Colorado and Utah that joined the Pac-12.
Larry Scott: It was a combination of factors. There’s a lot of interest, I think at the end of the day, Texas and Texas A&M weren’t getting along very well. No surprise that shortly after we didn’t move forward with the Pac-16, Texas A&M left for the SEC
and the, and Missouri left. So, there was some real friction there and a lot of it stemmed from the Longhorn network and Texas is, you know, that they want it to be first amongst equals in that league, we were going to require, you’re going to do this. We’re going to do it right in our league.
There’s a very egalitarian culture and set of shared values. And I think at the end of the day, Texas, in addition to not being able to bring Texas A&M along, had the view that they’d be better off in a smaller, big 12, where they could keep their own television network, as opposed to being an [00:08:00] equal member.
In something bigger and more powerful. And they were able to cut a deal with ESPN to kind of solidify the Longhorn network and kind of keep the big 12 alive. So that was really a strategic and philosophical call. That they decided the end of the day, I’d rather stay where they were with their own independent TV network, as opposed to joining what would have been the first super league, the first super conference.
I think this was the vision for, we would have been the first of what I predicted would have been four super conferences at the time, but it wasn’t meant to be. And thankfully, going back to your tome about planning and preparation, you know, we had scenario ABC. Ready to go. And if that wasn’t going to have, we were ready to go to Colorado, Utah, which were great, great fits.
That was all teed up. And we moved very swiftly to the Pac-12 and they have been terrific fits great members of the league. I’ve been competitive and football, basketball right away. Utah, Colorado have been terrific markets, but obviously, the Pac-16 with Texas [00:09:00] and Oklahoma included would have been a whole different animal.
And probably would have started to set a Domino’s too for a super conference and probably a 16-team playoff, all these dots connect somehow. But you know, someone once said to me, you can have an exciting idea, the right idea and the timing, you know, not meant to be for some reason. And as I look back, I kind of put that in this case.
AJ Maestas: Yeah, timing is a factor, but that is really interesting, especially A&M you know, and the power I think a lot of people on the west coast might not realize the influence and power of Texas A&M. So, what a conference that would have been, and it makes a lot of sense, right? I mean, let’s think about, you know, an alien lands on planet earth today and looks at the college landscape and the playoff, and it’s just, it’s maddening.
It doesn’t make sense geographically or otherwise it’s unbalanced scheduling. What have you. So yeah. Four power conferences with 16 teams is pretty. It sounds a lot like an NFL type structure. Right? So, what a shame, maybe we missed something great, but who knows, what’s meant to be, is there anything you do different in that process?
You know, [00:10:00] is there, was there a moment that things could have pivoted in a more exotic way that we might have.
Larry Scott: Well, I don’t know that we could have done much. And, you know, in terms of the relationships with A&M and Texas, I mean, the obvious thing we could have done differently as a league is we could have compromised on our principles about, you know, TV networks are rolling everything up collectively.
And you know, Texas might’ve joined on that basis with Oklahoma and, and other schools. But I also am a believer, things happen for a reason or don’t happen for a reason. And I’m not sure that would have been a better result at the end of the day. So I think we could have been some things we would have done differently, compromises we would have made to have had them joined and pulled off the Pac-16, but it’s hard to know that the harmony and relations in the league would have been better as a result of that.
I don’t spend a lot of time looking backward cause there’s so many factors involved in these things and you can’t really predict what would have happened in a scenario where you had new members in the [00:11:00] league at the time there was really no question about that amongst our members. It was kind of one for all, all for one.
AJ Maestas: Well, it’s just interesting to me because we believe, you know, that another wave of these considerations or scenarios are, are coming, right?
So it’s it’s fun to look at the past, to possibly predict what the future holds. You did an excellent TV deal. And the tier one deal was, I think it was what 5x, the prior deal or somewhere in that range. Do you remember off the top of your head with the leap was from the prior deal?
Larry Scott: So we went from an average annual TV deal about $60 million a year to $250 million a year.
The first year of our television agreement with ESPN and Fox in 2012 we went from about, a little over 60 million that year to over 180 million. So three times or triple the growth. From the last year world TV deal to the first year of our new TV deal and substantially more over a 12 year period.
And I remember those numbers specifically because one [00:12:00] of the issues we had to work through as a league was getting schools to agree to pool all their rights. On the one hand previously schools would sell individual RSN deals, but also I was a big believer school should share revenue equally. And at that stage, USC and UCLA were getting more than other schools in the conference because they were on TV more often and only half the TV revenue was shared equally.
The other half was shared based on how often you were on TV or how many so-called units you would get. I was a big believer that everyone should share equally on conference generated TV revenue for a variety of reasons. And we had agreed that we would move to more revenue share. After five years or when we tripled our TV revenue, whichever happened first.
And you remember that that three times lift the first year. Cause we went to equal revenue sharing in the first year of our new TV deals,
AJ Maestas: Day, one day one. Yeah. Someone under predicted the potential. But I think a lot of people under predicted that, I mean, that was big news at the time. I think it made a lot of conferences look inward and say, wait.
Pac-12, you know, just let past us. Well [00:13:00] looking back that clearly the tier one deal was a success. We know it’s been discussed ad nauseum, you know, in the press, the challenges and the headwinds at the Pac-12 network has faced. I’d love for you to take us through anything you’d do differently.
Looking back now at the wholly owned conference network, as well as your tier one deal.
Larry Scott: Yeah. Well, the first thing that’s probably a good level set and you around at the time and following this. On the heels of a record-breaking TV deal with ESPN and Fox, that kind of blew away all pre predictions.
I’ll have to dig out what Navigate’s estimates were that the model you want Navigate, because I’m sure we blew them out of the park.
AJ Maestas: We weren’t Navigate, Navigate started in ’06. Actually. We have some really accurate stuff out there on that, but it would have underestimated what you did tier one and overestimated what the network said.
Larry Scott: And just to be clear, and to be clear, there was a lot of serendipity involved in that. I mean, I think there was good planning, but you do also have to get fortunate and lucky, and we were for variety of [00:14:00] reasons. So be that as it may on the heels of exceeding any expectations in terms of what we would generate from our tier one, tier two deals, it was a strong desire to create.
Our own TV network, primarily to give exposure for Olympic sports. There was a lot of. About what the big 10 was doing. It was the only conference that had its TV network. They were getting exposure for Olympic sports that we weren’t getting. Pac-12 has always prided itself on being the conference of champions, winning more NCAA championships than any other, having the best Olympic sports athletes.
And there was a feeling we should have our own network, too. We should get exposure for our athletes. Why are we falling behind the BIG 10 in this regard? So that was a highlight. But it was not a financially motivated venture. I remember the business plan I had to present to our presidents and chancellors, and it was a commitment that we were breakeven, and I showed him the math, how through the guaranteed distribution agreements we had, even without any advertising or at least break even, and we’d right size it.
And they had that commitment and [00:15:00] there were of course models that would show. Significant revenue coming back if certain things broke but the network wasn’t created on the basis that it was going to be a revenue spinner for the universities at the time. Now over a 12-year period as other leagues created networks like the SEC.
ACC, more recently, BIG-10 was very profitable. It became clear that we were not generating the profits that others were, and as new people came along in our conference and you know, weren’t part of that decision as to why we’re creating the network priorities change. I get that it came under heavy criticism for not getting the same distribution that others were getting.
Not generating the revenue that others are getting, but obviously still delivering on a mission. If you look at our success in Olympic sports and talk to any of our women’s basketball coaches, they will credit the Pac-12 network for what we’ve been able to do and helping them recruit and get the kind of exposure and recognition they deserve.
And I was certainly believer that owning and controlling. [00:16:00] The network with best position as long-term and the upcoming TV deal allow us to be nimble as we move to things like streaming and the Fanga companies getting involved. And I think the wisdom of that will prove itself in 2023, when the team goes out and negotiates, our next deal is I think people will look back at that decision.
And the patient’s strategic patients. We had a show as you know, and be grateful for that, but it certainly has been a painful a few years as you watch the SEC with better distribution and the BIG 10 with better distribution and more TV revenue where they’ve sold the equity to other partners surpass us in that regard.
So, of course, there’s things I would do differently. You know, one thing is it probably would have been shorter. So that we would have had a chance to reset and kind of hit the promised land. But I know it was coming sooner because the last few years have been tough with a lot of new people in the league that don’t value the exposure and the strategic reasons.
We created a network and [00:17:00] are struggling, trying to keep up with the Joneses financially and to get a lot of pressure from fans. So, I certainly get it, I guess that’s the one thing we could have done differently. I think people have said, well, why wouldn’t you have taken a media partner, and then like that as well.
There weren’t really any great options for us at the time. And so, it’s kind of a hypothetical, but I guess that that’s, you know, if I could hit rewind, do it different. That’s probably what I would have done.
AJ Maestas: That’s interesting. One. I appreciate you mentioning the strategic priorities. I remember seeing a bulleted list.
I can’t remember at what time I was seeing this, but I’m certainly we’ve worked together. Thank you for that. And I appreciate your trust it, maybe at some point in that process. This bulleted list showed the priorities of what was desired from the Pac-12 network. And it was seventh or eighth of saying, you know, financial stability and potential growth or something along those lines, you know, it was about sharing the academic story.
It was about Olympic sports. It was. So forth and so on, but again, you know, that’s what have you done for me lately? Right. People forget that. It’s interesting. You point back at having a partner as well. I appreciate your timeline on history [00:18:00] on that. Most people forget the big 10 took a really big risk in launching a network their own network in partnership with Fox a lot of the major distributors didn’t want them to, because if they did, they knew that the systemic effect of that would be each league eventually wanting their own network and they’d have to carry.
So, there were, there was, you know, there was real headwinds that Jim Delaney, your friend, our friend is you mentioned, you know, face to face. And there were none others until the Pac-12 and now it’s sort of par for the course, right. Everyone in some form or another. Before I move on from the TV stuff.
And anything else come to mind? You know, you, you, you look at that bet you made you, you said earlier, you know, you feel confident that that will pay off. You mentioned Fanga right. And all these tech companies, all of which are based out there in the west, you know, so many Pac-12 alumni, as a founders owners, you know, major executives at those organizations.
Is there anything you’re willing to make as far as a prediction of what will happen with the Pac-12 net? Yeah.
Larry Scott: Well, we’ve had conversations with Amazon, with apple. It kind of got brought them to the table and be [00:19:00] surprised if they’re not at the table again given the relationships we’ve developed and their interest in us.
We recently went out in the last couple of years and talked to a bunch of private equity companies and agencies that were considering investing in a Pac-12 media co. And we were just blown away by the interest and what people would have invested based on predictions about where TV rights are going.
So, I’m going to predict significant, significant growth. And 12 media values, you know, whatever gap exists between us and the other leagues, I think it’s going to close significantly and may surprise some folks in terms of those that jump above. But you know, keep in mind, these TV deals all have different durations and lens.
And I think you’ll see the Pac-12, my, you know, team is going, and my successor is going to have to balance the need for exposing. With the desire to catch up and close the gap, which is going to mean doing some streaming and working with some type of companies that will overpay.
It’s not this similar age. You’ve been following this for a while to the [00:20:00] migration from network TV to cable. That we saw, you know, in the 90s and 2000s and there was a period of time when cable was coming up, that they would overpay for properties. And if you were a content owner, you’d have to wrestle with that balanced between exposure of network and cable, where I’m going to get the money, but there’d be a more limited audience.
And this is very similar. It’s going to be very important for league like the Pac-12 to maximize eyeballs for its biggest football and basketball games. And that’s going to mean being with traditional legacy broadcast.
AJ Maestas: I mean, I remember ESPN getting Monday night football and it was still somehow to be, even though their reach was just as much as broadcast, it was still sort of this.
Yeah. Is everyone going to have access to it? If it’s on paid TV?
Larry Scott: And now we can consider cable and network kind of in one bucket, right? There’s not much of a difference between a Fox and an ESPN, for example, or an ABC for that matter. So, I think what, you’ll see the leagues like the Pac-12, but also, I put the BIG 10 and BIG 12 in this category.
All are doing deals around the same time frame. [00:21:00] There’ll be a premium on getting your biggest games on network or cable that gets a massive audience, but in order to keep up with the Jones. And chase the BIG 10, the SEC, you’re going to put some games on streaming and or with a tech company. That’s got much more limited exposure.
AJ Maestas: Right.
Larry Scott: And you’re going to do that because they’re going to overpay. They’re going to pay you more than the platforms that will give you the broadest reach. That’s a prediction, but I think there’s a way to balance that Pac-12, of course, we’ll have to figure out a way to, and, but there are many options now.
To give exposure for Olympic sports which is, which is going to be important, and you know, figure out a way to maybe play less night games. I think that’s the other thing that, you know, if I could go back, we would have probably taken less. And allowed less night games based on the way our campuses have reacted to the pressure from fans.
I think that’s a trade they would have made at the time. In 2011, it was about maximizing [00:22:00] revenue and eyeballs. What fans in the stadia cared about was real low on the priority list. And that was a miss, right? Because. I, it surprised me how much traction, the kind of fan upset about night games. got. So I think most of our campuses would have traded some words. For
AJ Maestas: less than needling. It’s funny. My younger self loved night games. I loved the opportunity to tailgate or have a day and make that your evening activity or what have you. But with time and age, it is a pain, you know it’s games, you know, kicking off when I’m wanting to go to bed.
But it is a common complaint, but it’s not just the Pac-12. I think west coast fans might be under the impression that because of their times. They’re put in this position for late kickoffs, but this is actually a really common fan complaint across all the major conferences. It’s interesting to say, you’d make that financial trade-off though.
Cause I don’t know if we’re ever going back, actually let me say that differently. What would your advice be to the next commissioner? What would [00:23:00] you, I’m sure you actually had this conversation in assessing those trade-offs as you approach this next TV deal. And I appreciate what you said about streaming too.
It’s important that people understand this. I think you’re absolutely correct here. We’re doing some work right now with ESPN around the you know, the, their new NHL relationship. And a big piece of that is that a very large percent of those games will be on streaming on ESPN plus.
So you will not just turn on your traditional cable network and get the game. If you don’t mind me unwinding all that and saying what would your advice be to the next commissioner as you consider those trade-offs or just in general?
Larry Scott: Well, I have spent time with George giving the background to the trade-offs that we made the political dynamics, because these are all, trade-offs where the Pac-12 is not in a position where, you know, kinda identify exactly how much money it wants and exactly what they’re are going to be trade offs.
And there’s going to be pressure points for fans. So, you know, I’m not giving unsolicited advice. To my successor, I’ve got to stay out of his way and a good, very experienced executives. He’ll do great in that space. But [00:24:00] I did spend my time on is giving the background, the history, the goals, the priorities, the trade-offs that were made and lessons learned in terms of how those deals aged and how our members reacted to them.
And fans reacted to them over time. So, you know, I’ll stop short of giving advice in terms of.
AJ Maestas: Oh, well, that’s actually, you know what, that’s very presidential of you, right? To say sort of here’s where the bodies are buried. You know, here’s why we do what we did and what happened. Good luck.
It’s now yours. That’s fair. Well, this is a bit of a cheesy question in talking about the trade-off of Olympic sports and winning in football and basketball, but everything you read about the Pac-12 directly addresses this subject, you know, it’s the first thing the new commissioner says in his opening press conference. Do you think that there is a friction in, you know, is it mutually exclusive to Excel at Olympic sports? The way the pectoral does, whether that’s socioeconomic cultural, whatever it is that drives that, you know, on the west coast versus excelling at men’s basketball and football and the things that it will take to get there.
Larry Scott: I Don’t think it’s mutually [00:25:00] exclusive necessarily. I would like to think that prior to that prior ties in football, men’s basketball, doesn’t have to come at the expense of caring about inclusion opportunities. Women’s sports as well as men’s sports and that matter. So, no, I don’t believe it.
AJ Maestas: You know, it’s hard for me not to see some of those frictions, not to disagree with you, but you know, money is fungible.
And so if you look at an athletic department’s budget and you say, you know, where do the resources go? And we know there’s federal law, right? With title nine and sort of balance access to benefits for athletes. But it’s hard not to see the average Pac-12 university sponsoring far more sports than say, the SEC.
And if you are managing a portfolio of 30 sports versus 20 sports, clearly that’s time and energy and, and so forth and so on that you can put into the money-making, the cash cow serve products, right in basketball and football. Again, I don’t mean to necessarily disagree. It’s just more of one of those things.
I ask myself as a pack 12 fan, I’m a pack 12 fan, and are these missions in competition with [00:26:00] scarce resources with. Well,
Larry Scott: I appreciate you pushing on it. So I think this a push and pull, give your listeners some insights. So I’ll tell you what informs my perspective. Please do. Shortly after I came, I watched the cow try to cut a bunch of sports and then they did it recently.
Stanford, same thing, tried to cut 11 sports and the blow back was so significant that they couldn’t, I’ve seen other schools consider it. The truth is there’s not a lot of money. Right and cutting those sports. They are generally operating really low expense. There’s a lot of donor support for these sports.
And it’s a misperception that there’s a lot of money to be saved if you cut some of these smaller sports. The other thing I’d say is what I found is that the donor bases are different for football than other sports and some of our big programs don’t really have a resource challenge when it comes to deciding how much they want to put into [00:27:00] football.
They’ve got big donors ready to step up. They’ve got a lot of revenues. When you look at what they would put it into coaches salaries, assistant coaches pools, other things. In my experience, AJ, it’s more that the leadership of the campuses. The culture is such, they don’t want to be breaking records in that area and they don’t want to spend certain amounts.
They’re uncomfortable with it for a variety of reasons. I really haven’t seen the case. I have to tell you that there was a big desire to do something that would directly relate to success in football recruiting coordinator, or this or analyst. I mean, name what you would spend on in football. I really haven’t seen an example where our school could look in the eye and say, I can’t afford to do that if I wanted to, they choose not to do it.
AJ Maestas: Interesting. That’s a big statement. And I know we’ve done some homework for you on this exact subject. Right. But, but that, it’s a big statement and I don’t think that’s crazy. [00:28:00] Right. They don’t want to be in the news for breaking records for coaching deals, right. That, that just doesn’t fit with this sort of ethos
Larry Scott: coaching salaries, coaches, buyouts.
Yep. What we’re going to pay the strength and conditioning coach. I think if you peel back the onion a little. You’ll see, it’s more about culture and what people are willing to do and support and can get through their board of Regents or their board of trustees because of the culture. And I think a healthy balance and perspective, not because they couldn’t find the money from a donor to step up and do it.
AJ Maestas: Interesting.
That’s interesting. I think that’s probably news to 90% of fans, if not more. Right. That they actually can afford it. And that it’s a choice and that it’s a political, it’s a very political job, right. Running any university. And then, just like a politician, you fit your constituency and the west coast is different than the rest of the country measurably.
So what about football is it can given that limitation and let’s call it that self-imposed regulation, or, you know, sort of ceiling, [00:29:00] can the Pac-12 compete with the SCCs of the world? Are there other factors that would prevent them or are there methods and ways in which they can be hoisting the trophy at the end of the year at a representative rate.
Larry Scott: Yeah, I think so. Granted, as we sit here and do this podcast, the world is changing.
AJ Maestas: Yes. Yeah.
Larry Scott: NIL is an absolute game changer in terms of competitive balance and the landscape that Congress has not acted to have a national solution here, I think is big in that regard as well. And there’s more change coming.
So, but I’d say in terms of where we are now, and then that may result in a much wider gap between the haves and have nots ultimately. And you know, maybe there’ll be a different answer to this question a year from now, but I certainly think some of the same fundamentals that have made. The campus is so great over the years are still there.
You know, amazing schools, attractive locations, high quality people and coaches, [00:30:00] strong traditions. And you know, I think enough of a commitment to want to win and be successful. I think they can not the same commitment. As you know, the cultures are different and that’s the fan support.
They’ve got our stadiums stadia size. You look at attendance. You look at TV viewers. And you look at, you know, kind of the mindset and culture. It’s just different in different parts of the country. And I don’t come from the west coast, come from different part of the country. I see it. And I see the differences.
I know it’s kind of hard for some fans that are out on the west coast that don’t have a feel for what the culture is in other parts of the country, till we see that. And you’ve commented to me over the years as well. I know you recognize that there are differences that maybe some fans out here in west coast don’t see, that are fundamental. But I absolutely think that Pac-12 can can win again at that level if the fundamentals are there at least in terms of what the landscape looks like at the moment.
AJ Maestas: Yeah. There’s a lot of fan apathy in the west and we can all cite anecdotal evidence of it, but [00:31:00] generally speaking you know, this is what navigate does, right? Yeah. I can speak from a perspective of large data over time, the west coast is less passionate about sport. Of course there’s outliers and examples, right?
The Lakers or what have you, but despite great cities, great universities, great history, a lot of winning, a lot of talent there, isn’t that level of support that you’d find. And I keep using the sec as an example, but big 10, whatever it might be. I I’m glad you brought up name, image and likeness. Cause it’s hard for me not to think that that is a giant opportunity and threat at the same time.
And I don’t feel universities, I’m not talking about just Pac-12, I don’t feel them fully grasping what I believe it will mean. I know you and I’ve had some personal off the record conversations on the subject. I’d love for you to share anything you’re willing as far as your perspective, as I see it.
It becomes a recruiting enticement quickly, you know, without the NCAA really getting in front of it and could they even enforce it, they have challenges, enforcing what they currently oversee. And with law favoring the rights of the athletes earn whatever they want, however they [00:32:00] want, you know, what have you, I do believe there’ll be a federal law at some point we’ll get to that place, but not just in the interim, but long-term, I just don’t picture the Pac-12 taking the kind of action that you’ll see and other conferences and the action of a NIL not being an endorsement or camps. Well, it’s going to be that, but it really being recruiting enticement, it really being a form of compensation for that young person to come play at your Alma mater. Please tell me I’m wrong or tell me what you do if you’re in the Pac-12.
Larry Scott: I have some of the same worries. I mean, I think this is a great opportunity for many student athletes that truly have publicity value and can earn some extra money. There’ll be really meaningful on, on the one hand about, I am saddened to see so little discourse and appreciation for the value of the education.
You don’t hear a lot of discussion about that in the media. You don’t hear many members of Congress. Or many in state legislatures talking about the amazing opportunity that college athletics provides for so many student athletes who [00:33:00] wouldn’t have a chance to go to some of these high academic quality institutions that get in ahead of other kids because of their athletic prowess.
And certainly in the full scholarship sports or having a chance to graduate that frame. I mean, as a former student athlete myself and as a parent of a three college aged kids now it’s, it’s a sad day when there’s so little value on the opportunity and the education more focused on the entitlement and what the 2% deserves in the raw deal they’re getting and lack of appreciation for the benefits that 98% the student are getting so the system’s about to change in a way that could lead to negative outcomes for the majority of the student athletes. That benefit because, you know, at some point there spite what we said before, there is a zero sum game. You said it to play back. Your words, resources are fungible.
And at some stage [00:34:00] it will be difficult for schools to continue to support as many opportunities and student athletes, if they do. If there are no gardens or they get loosened to the point where a significant amount of booster and donor contribution to schools and the revenues, otherwise coming into schools are going to student athletes in revenue, generating sports.
So, I worry about that. But you know, given the decision in the courts and the action by politicians, In states, these laws are getting passed in a way that it’s going to be impossible for schools and the NCAA to police NIL to avoid it being used for industry. I believe in that, that’s my biggest worry.
I think you know, the idea of how many athletes are going to see on the cover of a Wheaties box, right? Or how many are going to have a legitimate advertising in their social media feed? That’s awesome. I fear that NIL will be window [00:35:00] dressing for enticing players to go to one school over another.
Twin that, now we’re really getting wonky here at twin that with the liberalized transfer rules. Yep, exactly. And there’s going to be a lot of resource spent that way and that’s that’s unintended, but I think that’s what’s happened now that the NCAA, the schools and conferences have lost control and lost control of the narrative and a no longer involved in the policy making here policy is now being made by the court and by politicians.
AJ Maestas: I really appreciate you saying that NCAA or just collectively, you know, industry not being in front of it. So then you have to react to what non-experts put into law. And to your point, it looks like a free for all. I appreciate you saying that I’m really appreciative of you noting the transfer policy, which those who are listening and may not know it’s pretty much a free transfer policy.
And so if you combine low and [00:36:00] possibly ineffective oversight or regulation from the NCAA or whoever has the right to, with the freedom to transfer and name, image likeness becomes a shield for recruiting inducement then it’s not just 17 year old, 18 year old recruitable athletes about to sign up for their college experience.
It’s a boy, you know what? I could really use that middle linebacker. And there’s a, there’s a void in my roster. Like anything there’ll be winners and losers, but to your point, and this is true when a new franchise moves to a city, right? We’re done a bunch of work recently with the NHL Kraken and Oak view group and the NHL and everything in the selection of Vegas and Seattle.
As expansion, it is not dollar for dollar, $1 in that market for that new NHL club, doesn’t take a dollar away from the existing franchises, but there is some cannibalization right there, it’s a mixture of those. And I think that’s what referring to is this mixture of these dollars in which if donors are far more motivated to see football win and have an impact on that winning and losing.
And their dollars are in their control and where they give it. And it [00:37:00] affects how much they give to the general university fonder athletics fund. Right now we’re talking about Olympic sports. Non-revenue sports that are heavily to your point, subsidized by donors. It’s a problem. It’s hard for me not to see that exactly.
As you just laid it out, playing out as we are discussing, playing out. And I feel like that’s not being openly discussed or contemplated by any of these parties. It’s disappointing to me, honestly, that we’re not at least being honest about the likelihood.
Larry Scott: Yep. And from a pack 12 perspective this development saddens me because our schools care deeply about the academic mission.
Students should be focused on getting this opportunity and the education first, and with these revenue generating options. Obviously the focus of young people and their families is going to shift, generating revenue is going to become a much higher priority in that balance with getting an education and the opportunity to have to have a successful life with a strong academic underpinning.
And I think the other thing for Pactiv look, we have smaller population, less avid fan base, less [00:38:00] eyeballs, you know, strong, clear national rules benefit the Pac-12. In terms of an even playing field where the SEC, BIG 10,BIG-12, ACC, et cetera, to the extent that becomes more unregulated. I don’t think that’s great news for our school.
So we fought hard to try to work with leaders to have a national solution, have clear guardrails. Unfortunately, you know, that battles.
AJ Maestas: I agree with you. I agree with you. And I haven’t been able to get too many people to share that, that feeling that this is a net loss for the Pac-12, based on all the things we just discussed.
I think a lot of people are seeing as this amazing opportunity, cause a big markets and big cities and all the wealth in the west, but it’s about where their priorities are. And will they write a check for that student athlete and will the others, and as a Pac-12 fan, I view it as a threat and a net loss coming our way, as far as attracting and retaining talent.
Larry Scott: And obviously there are opportunities being in markets like LA, San Francisco, for some level of marketing deal and opportunity. [00:39:00] Don’t get me wrong. What I worry about is that the bigger market becomes about recruiting.
AJ Maestas: Yep, exactly.
Larry Scott: And that’s a market. We don’t win.
AJ Maestas: Yeah. That’s exactly right. Yeah. The authentic name image, and like this marketplace in the pro sports world is a handful of athletes.
Very small percent of athletes in. People are acting as if and you hinted at this earlier the 2% versus the 98% that you know that it’s going to have be material benefit. Well, my final comment on I knowing you were a student athlete as well, and it’s a lot different when you choose to go to Harvard. I think you have a different set of priorities and objectives you’re achieving than an average student athlete.
But I know for myself, if a very small amount of money would affected whatever, the choices I made, you’re a young person. You don’t have the total perspective, you’re on a tight budget. And I’m thinking how small, like a thousand or even $10,000 could do to affect many student athletes choices and where they go to.
That would be highly influential as compared to the total picture of the academic experience. They might all say [00:40:00] that when they’re making their choices, but realistically, yeah, I think it has a massive influence on where kids go. Anyway. I don’t mean to beat a dead horse, but it’s, it’s interesting to hear you share that perspective cause I don’t think it’s one that’s being openly discussed by many. In our world in the world of collegiate athletics.
Well, you’re about to retire. I know you’re not retiring, but that’s what this question is about. I know you’re going to take some time off and good for you. I think it’s a great idea to reset, but do you mind sharing with us what you think the future holds for Larry Scott?
Larry Scott: Yeah, well, 2021 will be about my wife and I traveling. Our youngest will be going off to college in the fall. So we are going to take full advantage of that post COVID empty-nesters. And we’ve lived all around the world and in Europe, the east coast, the Southeast, and, you know, reconnecting with friends and relationships, and we’ve had a lot of shared passions, sporting interests, other interests.
So we’ve got a long list filling this up between now and the end of the year. [00:41:00] Also a chance to reconnect with friends in different industries that worked in pro sports and globally, and just take some time to kind of figure out what’s next. So, I’m 56 and you know, definitely have. Another chapter or two is left in terms of what I want to do.
It’ll be in sports entertainment and media tech. There’s been a lot of convergence, really exciting time with a lot of disruption that’s happened intellectually. I’m very interested in that, but I don’t anticipate diving into something new. Till 2022.
AJ Maestas: I don’t mean to make this an advertisement for what you’re doing next.
But if you just for fun, if you were to predict, where are we going to next see Larry Scott, like, when are you going to next pop up in the news for us? What, when, when is that? What will you be doing in 2022, as you said?
Larry Scott: It may very well be something that doesn’t get a lot of news. You know, I’ve been working for leagues you know, very public membership organizations.
For the better part of 30 years with the [00:42:00] ATP men’s pro tennis store commissioned a women’s tennis store commissioner here. My track I’ve really loved working with groups, transforming, building growing, and you know, what I haven’t done is something a little bit more private, a little bit more venture oriented.
And so, it wouldn’t surprise me if what I do next you don’t read about in the news.
AJ Maestas: I like that. Good for you joining me here in amenity and the private world where you can control your destiny a bit more. This, I hope this isn’t offensive to you or anybody who sat in those seats, but it’s a nightmare to me to think about the politics and the herding of cats and Being a public figure and having to manage, you know, those personalities and varied agendas and nowhere does it get more splintered than in the collegiate athletics world and at the commissioner level where you have all these constituents with each campus, now you’re rolling up a dozen or however many universities.
I think you should give yourself an incredible break by not coming back to that kind of world. Do you mind if I ask you a couple of just [00:43:00] quick hitter questions, so people get to know you a little better before we break? Okay. Cool. All right. What are your top passions and hobbies? I assume you still play Tennis.
Larry Scott: I do.
I still play competitive tennis play in leagues and at my club avid golfer. So, one of my goals over the next six months is to get to be a single-digit handicapper, which I’m not right now. And some determined to prove that I’ve got a lot of fun golf outings planned with friends around the country.
Pickleball is a new passion of mine. For a tennis player, kind of had a quick improvement trajectory, but it’s the fastest growing sport in America. And my wife and I enjoy playing mixed doubles. Got a great group of friends at club, actually played my first tournament already. So, I’ll probably play some competitive.
AJ Maestas: How’d you do?
Larry Scott: I came in second in a mixed doubles tournament with my sister-in-law. Who’s a very avid player in Southern California. So, that was fun. Skiing is a passion of mine and my wife, and I really enjoy travel together. We’ve got a lot of shared interests. [00:44:00] As I mentioned, we met and got married in.
And I’m lived in New York, lived in Florida. So, we’re going to travel and enjoy reconnecting with friends around the world a lot too. So those are, those are some of my number one passion. Then I’ll have two kids playing D1 college sports next year.
AJ Maestas: Oh, what sports?
Larry Scott: My daughter’s a lacrosse player.
And my son is a basketball player. So, in the big 10 schools, so we’ll be traveling and enjoying them and being active parents, but you know, making sure not to yell at the refs,
AJ Maestas: please, please. Don’t I won’t bring up any pack. 12 reffing John’s. I’ve heard it enough. Maybe you should be yelling at the refs who knows?
I won’t ask you what schools, the kids can have some kind of like private life, but that’s pretty impressive. That’s incredible to collegiate athletes at a three, and that would be fun. It would be really fun to be a parent and be able to follow them. I’ve just taken up a pickleball by the way the neighbors put in a court.
And it’s pretty, did not come from a tennis background, as you can imagine, being from Alaska, but it’s pretty quickly addictive and fun and easy [00:45:00] entry. You know, how about the best piece of advice you’ve ever received?
Larry Scott: So, I’ve been very fortunate. You know, I’ve worked with some great people over the years and mentors but say one of the pieces of advice that have stuck with me the most when I was a young executive at the ATP, the men’s pro tennis tour.
And I got to know David stern, who loved tennis, used to come out to the U S open. Had him come speak to my board when I was chairman of the WTA tour. And I used to go visit them from time to time. Anyone said to me, you know, when you’re going to make very big decisions and you’re not sure kind of which way to go, you know, imagine you’re going to be in this role for 20 years and make the decision that you think you’ll look back and was the best long-term decision, as opposed to short short-term decision.
You know, you’re not an owner per se. When you’re in these commissioner roles, but make strategic decisions as if you’re the owner and you’re going to be there a long time. And that stuck with me when had tough decisions to make, getting advice in these roles as commissioner, you usually getting [00:46:00] conflicting.
Right. Yeah. So we want to go this way, that way, and it can be lonely at the end of the day, when you got to make the final call and, and commissioner Stern’s wisdom has often been my true north when I had to make a final call on something.
AJ Maestas: Well, you know, we had Val Ackerman on the podcast recently, she brought up commissioner stern.
A number of people have that we’ve had as guests. He was obviously a great leader. If you look at. Quickly, radically he globalized, you know, the MBA and the game of basketball. It’s amazing to think that he wasn’t thinking short-term that it wasn’t long-term vision, but that has been a reoccurring story that we’ve heard about, you know, God rest his soul.
I wish we could have a conversation with him to learn more about his leadership. I wish bubble companies and the leaders of public companies would carry that long-term vision because that’s not what most people do. What most people do is in my near term. Best interest. I won’t be here in a few years, so not my problem.
That’s good. That’s good. Any advice that you could give to a young person wanting to follow in your footsteps?
Larry Scott: You know, I didn’t come [00:47:00] from this world, so I’m a real believer in developing an expertise, you know, and an ability and a real skill set that is transferable, you know, having some sales expertise early in your career, I think is important. You know, people that can generate revenue are always, there’s always going to be a place for them. I think those are important skills to get along the way. And obviously relationships and networks. At, at a young age, I think a lot of young people have found that a relationship, whether it’s in college or shortly after, you know, cycle back and a lot of different ways.
And certainly, if someone’s interested in collegiate athletics, I think it’s still a pretty, I say this a nice way. Ancestry. Industry, most people have been in it and moved from one organization to another conference, to another school to another. So, I think particularly in this area, having a cohort of people in your generation that you’re close to have relationships with as stood people in good stuff.
[00:48:00] And staying connected to those people throughout the years at least in college sports has been something that I recommend.
AJ Maestas: Yeah, that’s good. It’s good advice. I feel like I might’ve been doing that at one point in my life without even really knowing what that meant, but it’s pretty incredible how friends become clients and vice versa and who you get to work with when it’s all said and done.
I mean, it’s a pretty small world that we live in. Well, I’m so grateful for you joining. I’m really grateful. You’d share your time. I know this is a moment where you’re going to disappear and recharge, and I’m really grateful to catch you before you do with the ability to reflect on your time with the Pac-12 and just your career in general.
And yeah truly. Grateful for your time today. Thank you, Larry.
If you’d like to join the conversation, email us@infoatnvgt.com. Or check out our [00:49:00] website@envygt.com. I’m AJ Maestas. Join us again next week for Navigating Sports Business.