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CBS, USTA Add Revenue Sharing
In Reworked U.S. Open TV Deal |
CBS and the USTA “quietly reworked their broadcast agreement” for the U.S. Open
late last year, with the new deal including a lower rights fee but also “revenue
sharing and commitments to broadcast other USTA tournaments,” according to Ourand
& Kaplan of SPORTSBUSINESS JOURNAL. The deal beginning in ’09 guarantees the USTA
$140-150M over six years, and that annual rights fee is believed to be “about
20[%] lower than the previous deal, which was worth a little more than $30[M]
per year.” USTA CEO Arlen Kantarian said, “The days of network rights fees will
be long gone sometime soon, save the NFL. We took a look at a model that took
us ahead of that curve.” CBS has similar agreements with the NCAA, PGA Tour and
PGA of America, and CBS News & Sports President Sean McManus “expects to set up
similar revenue-sharing arrangements in the future.” McManus said, “This is the
wave of the future. This is the way for leagues and associations to protect their
rights fees and for networks to keep premier events on their schedule.” McManus
said the former USTA deal was “a significant money-loser for us,” and the new
deal should be “relatively profitable.” Both McManus and Kantarian said that the
USTA “could wind up making more money” under the new arrangement. Ourand & Kaplan
note AmEx, JPMorgan Chase and MassMutual “have agreed to larger media buys in
their existing sponsorship arrangements” (
SPORTSBUSINESS
JOURNAL, 5/7 issue).
