CBS has retained the rights to the NCAA men's
basketball tournament and secured other collegiate
championships with a "record-breaking" $6B rights deal that
will run 11 years through 2013, according to Shapiro & Asher
of the WASHINGTON POST. CBS outbid both ABC/ESPN and Fox
Sports to gain exclusive rights for cable and satellite TV,
radio, Internet, marketing, licensing, publishing,
promotion, corporate sponsorship, merchandising and e-
commerce. Starting in 2003, the NCAA will receive an
average of $545M per year, compared to the current $215.6M
it currently averages. The first year payment will be
$360M, with increases of about 6-7% a year. Last night, CBS
Sports President Sean McManus said that the network "has no
plans to put early rounds of the tournament on cable
television and that the event, in its entirety, will be
carried over free over-the-air [TV] 'for the foreseeable
future.'" CBS has carried the Final Four since '83 and has
had exclusive rights to the tournament since '90. As part
of the new deal, CBS also "has the rights to all but 19 of
the NCAA's 81 national championships." Shapiro & Asher cite
sources as saying that Fox finished second in the bidding
and dropped out when it become clear that the "number was
unreachable" (WASHINGTON POST, 11/19). In N.Y., Richard
Sandomir calls the contract "stunning" for a three-week
tournament "which has had declining ratings." Sandomir adds
that the joint Fox/Fox Sports Net bid was estimated at $5.1B
and the ABC/ESPN bid was "a bit higher." McManus: "We made
what we considered a fair and reasonable bid that enables us
to make a profit. ... We had our N.C.A.A. numbers three
weeks ago, before the NASCAR bidding, but emotionally we
were more committed to picking up the N.C.A.A rights after
losing NASCAR. There was enormous pressure to keep it on
CBS. NASCAR was important to us, but we don't place it in
the same category as the men's basketball championship"
(N.Y. TIMES, 11/19). McManus said that CBS has an agreement
to work with Host Communications on marketing rights, but
the deal is not done. Meanwhile, the AP notes that ratings
for the NCAA tournament have fallen 28% this decade, a
bigger drop than the Super Bowl, World Series or NBA Finals
(AP, 11/19). USA TODAY's Michael Hiestand notes that CBS'
fee for the tournament tops the $500M it pays annually for
NFL rights (USA TODAY, 11/19).
OPENER AFTER YEAR EIGHT: The WALL STREET JOURNAL's Joe
Flint reports that "there is a window after the eighth year
that allows the contract to be renegotiated." Flint: "With
the Internet and new-media rights as part of the deal, some
industry observers wondered if CBS didn't get a bargain."
MediaCom co-Managing Dir Jon Mandel: "I do question why the
NCAA would sell some of the content in areas such as the
Internet so far into the future -- perhaps they sold too
cheaply" (WALL STREET JOURNAL, 11/19). Sports Business
Group President David Carter: "At first blush, what seems to
be an obnoxious amount of money might make sense if you peel
back all the layers of the agreement" (BOSTON GLOBE, 11/19).
Pilson Communications President Neal Pilson said the deal
was $1B "higher than I thought" (AP, 11/19).
BIG BIZ HELPS: In Baltimore, Milton Kent reports that
yesterday's announcement "means that major American networks
have committed themselves to about" $30B in rights fees to
major sports organizations. McManus said the pending CBS-
Viacom merger was a help in the talks: "It would have been
more difficult to convince the NCAA that we had the ability
to take care of all of [the tournament]. It (the merger)
made us a much more attractive participant." CBS will
produce and air "two one-hour specials to highlight NCAA
championships, as well as an annual NCAA special and nightly
NCAA shows from March 1 through the end of the tournament"
(SUN, 11/19). DAILY VARIETY's John Dempsey reports that CBS
TV President Leslie Moonves and CBS CEO Mel Karmazin "got
personally involved" in the talks. CBS' stock hit a 52-week
high at the end of Thursday, reaching $55, "likely in
anticipation of the deal." Observers say that "it's almost
certain that CBS will sell early-round games to one or more
cable networks." TNN is a "logical partner," and one source
said Viacom's Showtime may be a possible suitor for a few of
the tournament games. Dempsey: "But CBS doesn't rule out
offering cable rights to the highest bidder, with overtures
already reported by both ESPN and Fox Sports" (DAILY
VARIETY, 11/19). But Moonves said, "We didn't pay this kind
of money to farm it out" (CBS SportsLine, 11/19). McManus
said fans could use DirecTV to see all the tournament games:
"We also have to protect our affiliates. Putting the games
on cable would hurt them" (CHICAGO TRIBUNE, 11/19).
OUTSIDE LOOKING IN, AGAIN: ESPN spokesperson Josh
Krulewitz: "The ABC-ESPN bid offered the best opportunity
for exposure and growth for the NCAA men's basketball
tournament. With over 2,300 college basketball games, the
women's championship tournament, 277 other NCAA
competitions, and nearly 100 college football games, ESPN
remains the home of college sports" (BOSTON GLOBE, 11/19).
EYE ON TV: On "Sports Tonight," CNN/SI's Fred Hickman
reported on the CBS/NCAA deal at 27:27 into the broadcast,
ESPN's Dan Patrick reported on the deal at 35:50, while
FSN's Keith Olbermann reported on it at 15:40. Olbermann,
noting the deal equals $544M per tournament, $182M a week:
"OK, but what does that leave them for bass? What happens
when all the star kids go straight to the NBA?" (THE DAILY).
