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SBD/April 14, 2011/MediaPrint All
Fox Sports and the Big 12 Conference have finalized a 13-year deal that will make Fox's cable properties the conference's exclusive cable home for football. Sources say Fox has agreed to pay $90M per year over 13 years. Fox had been paying $20M per year for the rights. In exchange for that fee, Fox will pick up the exclusive cable rights to 40 football games (up from 20 in the current contract) and all online, mobile and wireless rights. Most of the games will be available on FSN, though several also will be scheduled for FX. As part of the deal, Fox will get cable exclusivity for 40 Olympic sports events. "This landmark agreement positions the Conference with one of the best television arrangements in collegiate sports," Big 12 Commissioner Dan Beebe said in a release. "It exceeds the benchmarks as we move forward with our 10 members by providing significant revenue growth, increased exposure while allowing institutions to retain selected rights." There is no word on a proposed Big 12 channel, though the rights retained by the schools (which include one football game each), could be used to support such a channel, which sources say could carry up to 60 basketball games and Olympic sports. The channel would not include programming from the Univ. of Texas, which has partnered with ESPN on the new Longhorn Network, or the Univ. of Oklahoma, which is planning its own channel as well (Ourand & Smith, SportsBusiness Journal). Fox Sports Media Group co-President & co-COO Randy Freer "noted a Saturday afternoon window for FX games, but said nothing has been finalized." Beebe said gaining exposure on FX is "going to be tremendous for our brand and our product" (CABLEFAX DAILY, 4/14).
INCREASED EXPOSURE: In St. Louis, Vahe Gregorian reports "every Big 12 home game will be televised either by ABC/ESPN, a Fox network or by 'institutional platform' -- a school's own potential network." When asked "what contractual consequences are in place if one or more schools do leave" the Big 12, Freer said, "I don't think we need to get into the details here." Gregorian notes it also is "unclear what provisions were made in the deal on the matter of potential Big 12 expansion" (ST. LOUIS POST-DISPATCH, 4/14). Beebe said, "In the total context of media arrangements, we think we're in as favorable a position as anyone in the country." Freer: "There is no question that there is upward pressure on the value of sports rights. Sports and college sports have been undervalued comparatively to other content in the marketplace." In Houston, David Barron notes "existing contracts might prevent Fox's increased payments to the Big 12 from being passed on immediately to cable and satellite providers and to customers, but providers are expected to charge higher subscriber fees for Fox channels" (HOUSTON CHRONICLE, 4/14). Beebe said the Fox deal gives the Big 12 "one of the best television arrangements in college sports" from a financial standpoint. He added that it "should make it possible for other conference schools to meet a pledge made last summer to Texas, Texas A&M and Oklahoma ... that guaranteed those schools at least $20 million in league revenues in future seasons." Beebe: "It looks like this will make that issue moot in 2012 and beyond. We're counting on that going forward" (FT. WORTH STAR-TELEGRAM, 4/14). In Dallas, Chuck Carlton notes "everybody else will be at or near that $20 million figure at some point early in the contract, under the Big 12's revenue-sharing formula" (DALLAS MORNING NEWS, 4/14).
NOTHING TO WORRY ABOUT: SI.com's Andy Staples noted the $90M a year that the Big 12 will earn from the Fox deal is $30M a year "more than the first-tier deal with ESPN/ABC that runs through 2016." Staples: "Certainly, the 10 member schools will settle for more than quadrupling their money on the deal." Oklahoma AD Joe Castiglione: "This really validates why our media partners convinced us and encouraged us to stay together and stay committed to what we were doing." Staples noted the Big 12 will "rake in even more in 2016, when the new first-tier deal kicks in." That deal, which launched in '08, "brings in $60 million a year now from ESPN/ABC," so "imagine what a new deal will bring in five years." Staples wrote Beebe "made the correct argument last year when he claimed the Big 12 schools could stay together and still make the same money or close to the same money that five potential defectors would have made by joining a 16-team version of the Pac-10" (SI.com, 4/13). ESPN.com's David Ubben wrote, "Barring further realignment developments, the Big 12 is stable. The league's members agreed unanimously to the deal, and in signing it, essentially put action to words written over the past summer. ... Money heals plenty of wounds, and it looks like the Big 12 has plenty now." Ubben added, "Other than Notre Dame ushering in an era of superconferences, there's not a lot of dominoes in place that would cause the Big 12 to eventually fall. ... For now, the Big 12 looks secure, and Fox Sports' clear commitment to the league and members' commitments to each other are the biggest reasons why" (ESPN.com, 4/13). In Oklahoma City, Berry Tramel wrote the Fox deal "does give the conference hope of lasting beyond the next time some major school gets antsy." Tramel: "This league has a much better future than it appeared even last autumn" (NEWSOK.com, 4/13).
GETTING BACK IN THE GAME: USA TODAY's Michael Hiestand writes Fox is "emerging as a bigger player in TV college sports that could bid against ESPN and help raise the values of TV rights fees overall." Having lost BCS games to ESPN, Fox "picked up TV rights to next season's Pacific-12 and Big Ten conference football title games." After yesterday's deal with the Big 12, Fox's "next possible target" could be "TV rights to Pac-12 regular-season action, which is up for grabs" (USA TODAY, 4/14). Freer said that Fox is "ready to further beef up its collegiate cable portfolio following the Big 12 deal -- even amid stiff competition and escalating fees" (CABLEFAX DAILY, 4/14).
WELL PLAYED, SIR: In K.C., Sam Mellinger writes Beebe "pulled a subtle bit of brilliance in making sure the deal expires one year after the SEC's television contracts." The Big 12's commissioner when the new contract expires can "use the SEC's next contract as a framework for negotiations" (K.C. STAR, 4/14).
The NHL is "poised to take advantage of the labor unrest of its brothers" as the Stanley Cup Playoffs get underway, and by June the league is "hoping to parlay its red-hot popularity into a new TV rights deal that could double the $75 million annual agreement it holds" with Versus and NBC, according to Rich Thomaselli of AD AGE. ESPN, Fox and Turner, "as well as the incumbents, are all in the running for the right to broadcast hockey games." The timing "might be especially prudent for ESPN, given that the sports giant broadcasts 'Monday Night Football' for the NFL as well as live NBA games from October through June." MillerCoors "recently inked a seven-year exclusive sponsorship deal with the NHL estimated at" $400M, and the company last month "strongly hinted at its distributors' conference that ESPN and the NHL could be joining forces soon." But many sports-marketing and sports-media experts "believe the rights will remain with Versus and the new NBC/Comcast venture" (ADAGE.com, 4/13). Bloomberg TV's Michele Steele reports the NHL is "not planning on splitting up the rights among several networks," and the current deal with NBC/Versus "has the advantage over the other bidders because it has the right of first refusal and the ability to match competing bids" (Bloomberg TV, 4/14).
NHL TO SCORE IN NEW DEAL: In this week's SPORTSBUSINESS JOURNAL, John Ourand cites sources as saying that the NHL is "poised to sign its biggest media rights deal within the next two months, as the presence of three bidders" in ESPN, NBC/Versus and Turner is "pushing the annual rights fee above" $200M. Fox, "which had early talks with the NHL, is not believed to be in the running to pick up the rights." But the "presence of three bidders will help to push the league's rights fee well beyond the $77.5 million per year that Versus now pays." Ourand writes the "most intriguing potential bid comes from Turner, which is looking to add sports to its truTV lineup." The net "was a big part of Turner's NCAA tournament coverage, and Turner executives were happy with the channel's performance" (SPORTSBUSINESS JOURNAL, 4/11 issue).
SPRING MADNESS? The GLOBE & MAIL's Bruce Dowbiggin reported the NHL as part of its U.S. TV negotiations "wanted to present the postseason as the NCAA does its basketball March Madness, which is over within three weeks." Packaging a "leaner schedule is seen as a real bonus in the U.S." Dowbiggin: "It's no secret that the first two rounds of the playoffs are the best, and that momentum flags by week six. The problem is that four seven-game series in three time zones are hard to compress" (GLOBESPORTS.com, 4/13).
SHINY ICE: The NHL is on pace to set several business records and milestones this season. All North American TV partners experienced viewership increases, and 17 of the 30 teams' RSNs saw ratings increases or were even with season. The league also is on pace for its fifth consecutive year of record revenue and is projected to bring in more than $2.9B by the end of the playoffs. NHL Enterprises' revenue is projected to increase by 14.8% and will set a new best, while sponsorship sales set an all-time record with gross sales increasing by 33% (NHL).
Strikeforce last Saturday held its “first major event since being purchased” by UFC parent company Zuffa, and the MMA promotion “apparently stooped to the amateur-hour vindictiveness of its new ownership,” according to Jeff Wagenheim of SI.com. Two reporters assigned to cover Saturday's event “by major media outlets" -- ESPN.com's Josh Gross and CBSSports.com correspondent Loretta Hunt -- were "denied press credentials, just as they have been refused access to all UFC events in recent years" by UFC President Dana White. Hunt's exclusion was “especially bizarre, since CBS shares ownership with Showtime,” which televised the event. It was “curious” that Strikeforce “would bar writers representing such prominent outlets as ESPN and CBS Sports from press row.” Gross and Hunt are “two of the most experienced and respected journalists covering MMA.” Hunt indicated that “after her credential application was denied, editors at CBS Sports not only decided to go without original coverage Saturday night but also indicated to her that ‘they're not going to be covering the UFC for a while.’” But CBSSports.com Dir of Media Relations Alex Riethmiller “took a softer stance,” and ESPN.com's response “was similarly noncombative.” Wagenheim wrote, “White is himself the de facto commissioner. He can do whatever he wants. Until the media call him on it, which to this point only a few MMA blogs -- none with significant UFC access to lose -- have dared to stand up and do” (SI.com, 4/13).