SBJ/December 11 - 17, 2006/This Weeks News

USTA buys into Tennis Channel

Spurred on by the growth of single-sport networks such as the NFL Network, NBA TV and The Golf Channel, the U.S. Tennis Association has decided to invest in The Tennis Channel as a way to grow the network and the sport.

The USTA, the governing body for the sport in the U.S., is set to announce today that it is paying several million dollars to take a small stake in the digital cable network. As part of the deal, USTA CEO Arlen Kantarian will join the network’s board as an “observer.” The companies would not disclose specific terms of the deal.

“We want to play a bigger role in helping this channel succeed,” Kantarian said. “What better way to show that than to put some skin in the game?”

The deal by the NGB furthers a larger trend of having leagues, teams and college conferences launch their own channels. These groups are attracted to the business model because it allows them to handle their own rights, cutting out a middleman. Plus, these groups can use their networks as promotional vehicles to promote their specific sport or conference. By investing in this channel, USTA will adhere to its mission to grow the game of tennis.

“We’ve seen what these destination sport channels — which seem to be the wave of the future — are doing for other sports,” Kantarian said. “This is our version. Instead of us doing it, we’re going to partner with The Tennis Channel to do it.”

The deal does not include added rights to USTA events, such as the U.S. Open, which remains with CBS, with additional coverage on USA Network. The Tennis Channel already carries early-round matches from the USTA’s U.S. Open Series, and it has covered some matches from the Davis Cup and the U.S. Open. Earlier this year, The Tennis Channel carried some men’s singles and mixed doubles matches from the U.S. Open, said The Tennis Channel chairman and CEO Ken Solomon said.

But expect The Tennis Channel to obtain more match rights in the future. The USTA owns Pilot Pen Tennis in New Haven, Conn., a combined event held the week before the U.S. Open, and a women’s event in Palo Alto, Calif. It also owns 25 percent of a women’s event in Los Angeles. Executives would not speculate if these events would wind up on The Tennis Channel. But the trend is for single-sport networks to obtain rights such as those. The NFL Network is in the middle of its eight-game package and The Golf Channel begins its first year of showing early round coverage of PGA Tour events in January.

But The Tennis Channel is particularly excited about getting access to the USTA’s video library, which features classic matches. It plans to use that library material for ancillary programming on the network, video on demand and DVDs, Solomon said.

“Have we done it yet, and have we formalized how it’s going to work yet? No. But we’re going to create businesses together based on what they bring and what we bring to the party,” Solomon said.

Both sides clearly hope that the partnership will drive distribution for the network, which has been stuck at nearly 10 million homes since February, when it signed a deal with satellite provider EchoStar. Part of the reason the network’s distribution has slowed is its insistence to stay off cable operators’ poorly penetrated digital sports tiers.

The deal also marks a thawing of a relationship that started out frosty three years ago when Steve Bellamy launched the network. Solomon joined the channel in spring 2005, and Bellamy left in May.

“This is certainly a vote of confidence for the new leadership at The Tennis Channel,” Kantarian said.

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