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SBJ/November 24 - 30, 2003/SBJ In Depth
ESPN Regional becomes a player in staging bowl games
Published November 24, 2003
ESPN Regional Television's involvement in bowl game operations began with a lunch in the summer of 2000 with officials from the Las Vegas Convention and Visitors Authority.
Originally the lunch was scheduled to discuss other business matters between ESPN Regional and the convention agency, which at that time owned the Las Vegas Bowl.
Company: ESPN Regional Television
What they do: ESPN Regional, a subsidiary of ESPN Inc., is a syndication, sports marketing, event management and production company
Bowl operations: Las Vegas Bowl, Sheraton Hawaii Bowl, PlainsCapital Fort Worth Bowl
That lunch evolved into one that gauged ESPN Regional's interest in taking over the bowl game, and "the next thing you know we had the opportunity to add to what were two viable businesses [in Las Vegas]," said Pete Derzis, senior vice president of ESPN Regional. He was referring to the group's involvement with UNLV's athletic department and as the operator of the Las Vegas Showdown, a basketball event, of which the local convention and visitors authority is a sponsor.
The success of Las Vegas bowl operations in year one for ESPN Regional led the group to launch a bowl game in Hawaii last year and a new bowl in Fort Worth, Texas, this year.
The new bowls reflected a company mandate to grow the events side of ESPN Regional's business. ESPN Regional produces more than 600 events a year, which translates to more than 2,000 live or original hours of programming; is the largest producer and syndicator of college sports with syndication rights to conferences including the Big East, Big Ten, Big 12 and Conference USA; and holds multimedia marketing rights to select university athletic departments including Iowa State, Kansas, Oregon and UNLV.
The bowl business is seen as "a way to reward and build equity in the leagues we own rights to," Derzis said. Bottom line, though, is the events have to make sense and they have to complement the company's existing portfolio.
The Las Vegas Bowl, for instance, made sense because ESPN Regional already had multimedia marketing rights to UNLV's athletic department and had the Las Vegas Showdown.
In Hawaii, bowl discussions began after the University of Hawaii, a member of the Western Athletic Conference, which has ESPN Regional as its television partner, got passed over for a bowl invitation in 2001 despite posting a 9-3 record.
And in Fort Worth, ESPN Regional officials saw an opportunity to build on existing business in the area and create a new community event. ESPN Regional already had an office in Fort Worth, which works on Texas Christian University marketing rights.
"ESPN as a corporation primarily rents rights," said Chuck Gerber, ESPN Regional's executive vice president. "This was a way of actually owning events that we have interest in to secure our future."
Last year, ESPN televised 20 of the 28 bowl games played. ABC carried five of those games, which means the Walt Disney Co., through ABC Sports and ESPN, televised almost 90 percent of the bowl games last year.
Though headquartered in Charlotte, ESPN Regional has offices in each of its bowl markets. The company also has tapped a group of bowl experts and community leaders to head up the bowls in their respective locations, something that is seen as a plus by the NCAA's bowl certification group, said Dennis Poppe, managing director for baseball and football at the NCAA. The NCAA bowl certification committee encourages bowl organizers to make their events community supported and community oriented, he said. "ESPN Regional's done a good job in getting that local involvement," he said.
Derzis would not reveal specific costs for operating ESPN Regional's games. But they each include at least $1.5 million in payouts to participating schools (each team receives a minimum of $750,000), the cost of ancillary bowl functions, gifts to the players (limited by NCAA rules to $300 maximum per player), stadium costs and staffing costs.
Offsetting those expenses are revenues from corporate sponsorships, ticket sales, television and radio rights, and things such as program sales. Television-wise, ESPN Regional is treated no differently than other bowls vying for ESPN exposure. ESPN Regional sells to ESPN the rights to televise its games and in exchange for a rights fee, ESPN keeps advertising revenue from the game.
While ESPN Regional has an interest in growing its events, which in addition to bowl games includes basketball tournaments and golf's skins games, Gerber said there were no immediate plans to add another bowl.