Canzano: Pac-12 has a nasty Larry Scott hangover
In the spring of 2019, Larry Scott was in damage-control mode. The Pac-12 Conference commissioner was annoyed with a column I’d written about a $7,500-a-night hotel room he booked for himself in Las Vegas.
The Sky Suites two-bedroom Sky Villa at ARIA Resort and Casino included 24-hour butler service. It had its own private elevator, a marble jacuzzi soaking tub, a fully stocked bar, and a powder room.
Mark Shuken, the head of the Pac-12 Networks, was scrambling, too. I’d also written about how demoralized staffers at headquarters were after watching Shuken dart in and out of downtown San Francisco on the company dime. The conference was mired in troubling finances at the time.
Shuken lived in Southern California. When Scott hired him for $840,000-a-year in base salary, the commissioner assured the network president he wouldn’t have to relocate. The Pac-12 paid for chartered flights, allowing Shuken to wake up near the beach and work that same day in San Francisco. The conference also rented Shuken an apartment not far from the Pac-12 offices.
That apartment often sat empty, per sources. It quickly became a source of frustration for Pac-12 employees who were forced to bunk up, two and three to a place, amid soaring rents in the Bay Area.
Staffers weren’t satisfied when Scott issued a memo that spring, explaining why his use of the swanky Las Vegas suite was justified. The optics were awful. Shuken sent his own internal missive to staff at the same time, insisting the head of the conference’s network absolutely needed to dash between LA and the Bay Area.
Six months later, 15 conference employees were laid off due to the pandemic. Another 79 were furloughed. They must have spit soda through their nostrils when they learned that Scott accelerated the timeline and paid nearly $4 million in bonuses to himself and other high-level conference executives, including Shuken.
Scott wasn’t dumb. But the commissioner sure acted like the rest of us were, didn’t he? Count me among those who aren’t surprised at the damage left in his wake. The Pac-12 has quite a Larry Scott hangover.
USC and UCLA are gone to the Big Ten. That unfortunate development happened last summer. One current athletic director told me immediately after the defection: “Larry put us on the path here.”
On Friday, the conference terminated two senior executives, including Shuken, for failing to disclose overpayments by a media distribution partner on Scott’s watch. The other fired executive is Brent Willman, the Pac-12’s chief financial officer.
The Pac-12 dumped Shuken and Willman following an investigation by an independent, outside legal firm. Scott was interviewed as part of that process.
What did Scott know?
When did he know it?
Nobody I’ve talked with believes that Shuken and Willman kept what they knew from Scott. One former Pac-12 employee who worked closely with the commissioner said: “I would be shocked if Brent didn’t bring it up to Larry. I can’t imagine him just hiding it and not doing anything about it.”
It’s going to take some time to get answers. But this topic deserves sunshine. What we now know is that two Pac-12 executives were aware of a substantial overpayment by a distributor (i.e Dish Network, Comcast, etc.) and kept that information from the Pac-12’s presidents and chancellors.
The Pac-12 Networks struggled with distribution from the launch. The product was great, but fans struggled to consistently find it. That became a source of frustration for fans in the footprint. Scott and Shuken fielded constant questions on the subject.
Cable companies frequently perform audits to make sure the networks are charging them based on the correct number of subscribers. It appears Pac-12 leadership ordered an audit in 2016, found out there was a possible $50 million that would need to be paid back, and didn’t tell anyone about it.
It’s bizarre, isn’t it?
Order an audit. Learn there’s a major issue. Then, say nothing? Do nothing? We’re being told that none of the former executives benefitted directly from the overpayments. But the Pac-12’s books undoubtedly looked a lot better, didn’t they? Is it possible that Scott and cronies were worried about qualifying for their bonuses? Were they concerned the presidents and chancellors wouldn’t renew their contracts? Something else?
There’s so much to unpack here.
Scott was particularly guarded with the financials over the years. Once, several years ago at the NCAA Convention in Orlando, the conference ADs requested an audit of conference expenses.
Scott shot them down.
Said an ex-Pac-12 Conference athletic director who was in the meeting: “We, as ADs, were told that we didn’t have the authority to request a budget review. Only the presidents and chancellors can do that.”
One thing I keep thinking about is something Scott said in late 2018. I was at Levi’s Stadium in Santa Clara, Calif. to see Washington play Utah for the Pac-12 football championship. In his pre-game news conference, Scott announced that the Pac-12 wasn’t just an athletic conference.
“We’re a media company,” he declared.
I almost fell out of my chair. The Pac-12 was trying to be two things. It wasn’t good at either one of them. Now, I’m thinking it is the perfect time for the Pac-12 to get back to specialization.
Current commissioner George Kliavkoff inherited the conference’s woes. So did most of the current Pac-12 CEO Group. Only UCLA Chancellor Gene Block and Arizona State President Michael Crow were around when Scott was hired. I have to think the $50 million overpayment is challenging how the current presidents and chancellors view owning and operating the Pac-12 Networks.
The Pac-12 belongs in the “we’re a media-company” arena as much as I belong on a trapeze in Cirque du Soleil. You can say it out loud all you’d like, but if you’re not talented at it, you’re going to end up flat on your back.
Here’s a thought for the Pac-12: Sell the entire Pac-12 Networks operation to Amazon. Get out of the media-company business. Pay back the $50 million to Dish Network (or whoever is owed). Put the focus on trying to be a great athletic conference again.
But first get Larry Scott back in front of the public.
He has some questions to answer.
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The fact that he surely knew about this situation but still cashed in $4 mill worth of bonuses and THEN laid people off? Wow. Not only a low life, but apparently, perhaps, a criminal low life. Would love to see the PAC-12 lawyer up and force Scott to speak out of both sides of his face for weeks on end. It would be the very least they could do for him.
Any legal wrangling that can occur to wrestle back those performance bonuses? If not, seems a stock and pillory punishment should be in order at the PAC 12 Championships -- both football and basketball for the same number of years Larry ruled as commissioner.