SBJ/20091207/This Week's News

NCAA, TV talk about bigger men’s tourney

The NCAA has started meeting with broadcasters to explore the media value of expanding the men’s basketball tournament field, industry sources say.

As part of that process, the group also is gauging the feasibility of moving the tournament from broadcast to cable.

Though the discussions are being characterized as preliminary, they shed a light on the NCAA’s thinking as it decides whether to exercise an escape clause in its 11-year, $6 billion deal with CBS, the NCAA’s longtime partner.

CBS has a long-standing relationship with the NCAA, having broadcast the tournament since 1982, and is expected to move aggressively to keep the tournament on its network.

The NCAA can opt out of its CBS deal after
this season.

But the NCAA has the ability to opt out at the close of the 2010 Final Four. One source said this is just the beginning of a process that will conclude in summer  2010, at the earliest. Greg Shaheen, the NCAA’s senior vice president of basketball and business strategies, is leading the exploration with assists from a pair of well-known college media consultants, former Turner and CBS executive Kevin O’Malley and former ESPN executive Chuck Gerber.

The NCAA still is searching for an executive to replace former President Myles Brand, who died in September.

The trio has been contacting several broadcast and cable networks to judge interest in bidding for the basketball tournament.

Though it has floated the ideas of expanding the tournament and moving it to cable, the NCAA is not committed to making any changes. It also is talking with TV networks about whether they are interested in the tournament as is. The NCAA’s current deal with CBS is heavily backloaded. More than a third of the total value — $2.13 billion — is due to the NCAA in the final three years.

But the potential expansion of the NCAA tournament has support in collegiate circles, particularly from college basketball coaches. The idea talked about with TV networks would likely take it from its current field of 65 teams to 96 teams and add another week to the competition, with the top 32 teams receiving byes. The move has been characterized as folding the NIT into the NCAA tournament.

The NCAA clearly expects that the added week of games would significantly increase the tournament’s rights fee. A larger field would mean more content, more scheduling opportunities and theoretically more revenue for the broadcaster and the NCAA, which derives more than 90 percent of its total annual revenue from the tournament’s media deal. Nearly all of that revenue passes through the NCAA and is distributed to its member institutions.

The study of an expanded tournament is simply part of the analysis, sources said, and there’s no certainty that the NCAA will go in that direction. The governing body of intercollegiate athletics also is discussing the current tournament format with broadcasters.

The NCAA also believes a move to cable could increase its revenue, especially given last year’s deal ESPN signed with the BCS, which agreed to move its five annual games to cable in exchange for a 50 percent increase in its rights fee. ESPN paid $495 million over four years for those rights.

ESPN’s dual revenue stream of affiliate fees and advertising allows it to outspend broadcasters, and the NCAA is looking to see if it can get a piece of that revenue.

The NCAA also has an out in its deal with ESPN after this season for its collegiate championship events, like the women’s NCAA tournament and College World Series. It is gauging interest in those as part of the same package as the NCAA tournament.

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