SBJ/April 11-17, 2011/MediaPrint All
The University of Southern California has moved into exclusive negotiations with Fox Sports for the school’s multimedia rights, according to industry sources.
While USC and Fox have not completed a deal for the rights, the two are in talks for a comprehensive package that would include radio, corporate sponsorships, venue signage, digital and other marketing rights.
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Fox is expected to hire Wasserman Media Group as sales agent if it signs USC.
A deal with USC would represent Fox’s first move into the multimedia rights space since 2008, when its Sun Sports RSN signed a media rights deal with the University of Florida worth about $100 million over 10 years. In the Florida deal, Fox retained IMG to manage the property.
The USC deal would be a different model for Fox, as it would work directly with the school. Fox has extensive experience selling college inventory on the West Coast through Pac-10 Properties, the sales, marketing and merchandising arm for the conference.
Additionally, Wasserman Media Group, which worked with Fox on a valuation for the USC property, is expected to work with Fox as a sales agent if the network secures an agreement with the Trojans, but Fox would take the lead on the relationship with the school.
It’s also possible that Fox could use the executives and resources at Pac-10 Properties to manage the marketing relationship with USC.
The Trojans have handled their marketing and media rights in-house in the past. This marks the first time under new Athletic Director Pat Haden that the school has investigated an outsourcing model.
Fox began talks with USC last month after the network posted the highest bid among a group of competitors that included IMG College and Learfield Sports. Fox’s bid was believed to be close to $10 million a year over a 10-year period, which is believed to be well above the estimated $6 million a year USC currently makes by selling its rights in-house.
There remains no guarantee that USC will move forward with selecting a partner for its rights or that it couldn’t move on to IMG College or Learfield if a deal can’t be reached with Fox.
If Fox does land the USC rights, it does not signal a shift that would see the company aggressively seek other schools’ multimedia rights, sources said. USC presents a convenient opportunity for Fox, since they are both based in Los Angeles and Southern Cal offers a premier football program with a national appeal.
Fox initially went into the process with Wasserman Media Group and Legends Hospitality Management as partners. Legends was on board as a licensing and merchandising agent, industry sources said. Since then, USC’s talks have focused on Fox, while the merchandising negotiations with Legends have become a separate conversation.
IMG’s Collegiate Licensing Co. is the industry leader in collegiate licensing, and Licensing Resource Group has a healthy list of college clients as well, but USC has kept its licensing rights in-house over the years.
This would mark the first collegiate merchandising property for Legends, which works with the Rose Bowl and the University of Connecticut on premium seating sales.
Live video from every Class AAA baseball game will be available online this year after a further expansion of Baseball Internet Rights Co., the interactive firm owned by Minor League Baseball and operated by MLB Advanced Media.
The rebuilt MiLB.TV package will feature live games online from all 30 Class AAA parks, roughly double the availability from 2010, as well as about a half-dozen other teams from lower affiliated classifications.
The game package will be sold for $29.99 for the season, or $6.99 a month. Subscribers of the MLB.TV package can add the minor league games for an additional $10. Archived games and expanded highlights will also be new to the product.
The games will be part of a rebuilt MiLB.TV package that will be sold for $29.99 for the season or $6.99 a month.
More than 2,000 live games will be shown in the MiLB.TV package as a result of the infrastructure build-out at the additional Class AAA ballparks enabling the online feeds, a sum thought to be larger than any other single U.S. sports property aside from MLB itself.
“Having all the Triple A games bundled together is a big step forward for us,” said Art Matin, Mandalay Baseball Properties chief executive who also was recently named the new chairman of BIRCO. “It’s perhaps taken a little while, but we’re seeing big momentum coming out of this agreement, not only from the video content, but also sponsorship, ticketing and several other key areas.”
A Minor League Baseball mobile application, offering similar features as the award-winning MLB.com At Bat app, such as detailed Gameday scoring and access to the live video feeds, is under development and is slated for release later this spring.
NBC Sports and corporate sister Versus this week will begin a digital integration for the NHL playoffs in which NBCSports.com will become the online hockey hub for both networks.
Eyed as an initial move toward a larger, forthcoming digital integration within the NBC Sports Group, NBCSports.com will pool existing hockey content, such as its growing ProHockeyTalk blog, along with exclusive online analysis, video and social media material from Versus’ NHL talent.
The online integration effort will also include live streaming and alternate camera angles from NBC’s network coverage of the NHL playoffs.
“Mergers are always interesting things, but we’re combining our best assets, and what’s happening here with hockey is the first step of more such moves we’ll make in this area,” said Kevin Monaghan, NBC Sports senior vice president of business development and managing director for digital media.
Ultimately, all of Versus.com will likely reside within NBCSports.com, Monaghan said. More immediately, a similar digital integration effort is likely to occur for Tour de France coverage this summer.
NBC and Versus, meanwhile, will conduct a social-media-oriented promotion this week in which a Zamboni redecorated to look like an ice cream truck will travel to several NHL playoff markets. Staffers will hand out free ice cream and numerous hockey-related prizes such as playoff tickets, jerseys and other autographed merchandise, with a key goal of boosting viewership of the playoff broadcasts.
In an effort to boost its prime-time hockey coverage, the NHL Network is transforming the league’s popular “NHL Live” radio show into a live two-hour television program for the Stanley Cup playoffs. Starting Wednesday, “NHL Live” will run from 4 until 6 p.m. ET on weeknights and will precede the “NHL on the Fly” pregame show, which previews each evening’s games.
“The network will now be live from 4 p.m. until whenever the last game of the night finishes,” said Mark Preisler, executive producer for the NHL Network.
Deb Placey will become part of the show’s permanent on-air talent.
The show will also receive a major bump in infrastructure, including a new temporary set and revamped graphics package. “[“NHL Live”] is going to look more like a real television show, not a radio show that is on TV,” Preisler said.
The NHL will design a permanent set for the show at the NHL Store in midtown Manhattan for the 2011-12 season. Preisler said the show will stay in the 4 to 6 p.m. time slot through the 2011-12 season.
The changes to “NHL Live” come after a season of new hires for the NHL Network. Preisler joined the league in January, just weeks after the league hired David Proper as the executive vice president of media strategies and distribution. In September, the league hired former NFL Network executive Charles Coplin as executive vice president of content and brought on Bob Chesterman as vice president of programming.
The NHL is poised to sign its biggest media rights deal within the next two months, as the presence of three bidders is pushing the annual rights fee above $200 million, sources familiar with the discussions said.
The NHL is expecting to entertain offers from ESPN, NBC/Versus and a surprisingly strong push from Turner. Fox, which had early talks with the NHL, is not believed to be in the running to pick up the rights.
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. The fee also is expected to exceed – by far – the $120 million per year average that ESPN paid from 1999 to 2004, which is the NHL’s largest contract to date. The league’s current deal with NBC is a revenue-sharing deal that does not involve a rights fee.
It’s difficult to declare a front-runner, sources said. But NBC and Versus hold a significant advantage over the other bidders. Their current contracts give them the right to match other offers the NHL gets, from either ESPN or Turner.
NHL Chief Operating Officer John Collins has been leading the negotiations for the league.
Versus and NBC’s exclusive negotiating windows ended earlier this year, allowing the NHL to engage other networks for both the cable and broadcast packages.
Sources close to the discussions said Turner is more interested in bidding for the NFL when that league’s rights come up in 2013. While it’s interested in the NHL, it’s not willing to break the bank on it.
ESPN has talked with the NHL about placing the league’s entire television package – broadcast and cable – on ESPN2. But an ESPN source also said that ABC remains a viable option, particularly for the Stanley Cup Final.
It’s been no secret inside the NHL that many of the league’s executives favor ESPN. They believe a deal with ESPN will guarantee more coverage on popular shows like “SportsCenter.”
Many observers believe it would make sense for Versus to retain the package, since the NHL produces its highest profile programming and accounts for the network’s biggest ratings.
Staff writer Fred Dreier contributed to this report.
Here are three quotes from the World Congress that struck me, because they demonstrate the power of live sports:
• “You can look at the NFL and bet the house they’re going to double their rights fees in the next negotiation.” — Tim Leiweke, president and chief executive officer of AEG
At a World Congress in 2003, CBS President and CEO Les Moonves delivered a keynote address in which he said, “The days of networks paying ever-escalating rights fees may be over.”
When Moonves’ quote was read to Leiweke in 2011, the AEG chief executive laughed. “Who said that? Les Moonves?” Leiweke asked. “That’s because he’s the guy paying.”
Live sports has never been more important for TV channels, which means rights fees should continue to soar, Leiweke said. He pointed to the fact that NFL games made up 18 of the top 20 TV shows last year as evidence that networks need to keep live sports on their schedules. “You’re going to see a doubling and tripling of rights fees going forward because they need that live content,” he said. “We live in a world that has attention deficit syndrome, and they have to find something that’s relevant.”
While live sports undoubtedly is important, IMG’s George Pyne said leagues also will begin to reap more money from highlight rights. “Think about ESPN without highlight rights,” he said. “If you couldn’t watch highlights on ESPN, would you watch?”
Garber sees a “massive positive mess” on the media landscape that can benefit sports.
Garber confidently predicted that MLS will see “multiple increases” when its media deals with ESPN and Univision expire in 2014. One main reason Garber believes rights will increase is that new bidders will emerge. He referenced YouTube’s deal with the Indian Premier League, which saw up to 50 million people stream cricket matches through the site.
“Ten years ago, we weren’t thinking about YouTube as a customer,” Garber said. “Maybe what ESPN has done to show you what that value could be through a cable sports channel, sometime in the near future could be a value for us through Netflix. We don’t know what that is today. But we think it’s going to be there somehow.”
Garber pointed to changes in the media landscape — from Time Warner Cable’s service streaming channels to iPads to telecom companies continuing to move into the cable business, as potential opportunities for sports leagues like his.
“It’s just this massive positive mess for all of us in the business,” he said, “and I think we’ll be the beneficiaries of it all.”
• “If it takes past May or June [for the NFL and NFLPA] to make a decision, I don’t know if these advertisers can wait it out and buy football hoping that it does turn around.” — David Levy, president of sales, distribution and sports for Turner
The TV advertising market for live sports — particularly the NFL — is as strong as it has ever been. But networks will start to feel the effects of the NFL lockout if there’s no resolution by next month.
That’s because advertisers typically commit to an NFL schedule during the upfront selling season, which wraps up by the end of May. Networks are concerned that advertisers will be reluctant to commit to such a schedule if there’s a possibility that games will be canceled. “If advertisers have to lay down their money in the fourth quarter, and there is no football and there is no NBA, that’s going to cause short supply, high demand and high pricing,” Levy said.
Some of that money can move to other sports, like college football and postseason baseball. “But there’s only so many slots,” Levy said. “There’s a huge amount of money put down on NFL football and NBA basketball that has to be absorbed in other places.”
Boston sports radio hub WEEI and Washington, D.C.-based national blog network SB Nation have signed a content-sharing and sales partnership, expanding the interactive local efforts of each outfit.
The two will share each other’s work on their sites.
The initial contract is for one year, though both sides are eyeing a longer-term relationship, and possibly replicating the pact in other Entercom radio markets. Financial details were not disclosed, but the deal is built primarily around revenue sharing.
The deal marks the first time SB Nation has partnered with such a market-leader station.
“The distinguishing feature about this partnership is that it’s so much more integrated than typical deals of this type you usually see,” said Jim Bankoff, SB Nation chairman and chief executive. “Very often, all you see is link shares and very little contact between the parties until the contract is up for renewal. Instead, we’re after a very high degree of collaboration and a real joint sense of how we can each push ourselves to create something really relevant and new.”
For WEEI, the deal continues an aggressive push into digital content over the last three years. In addition to a fully featured WEEI.com website that attracts more than 1.1 million unique visitors a month, the station has ventured into mobile applications for the iPhone, Android and BlackBerry platforms, generating more than 420,000 total downloads. The station holds contracts with New England Patriots coach Bill Belichick and quarterback Tom Brady, Boston Red Sox manager Terry Francona and Boston Celtics coach Doc Rivers, among others, for exclusive weekly on-air interviews, in turn becoming a frequent source of breaking news.
“This is an incredibly competitive sports market, and we’re creating a strong, integrated multimedia strategy to reach fans wherever they are and whatever they’re doing,” said Tim Murphy, Entercom vice president of digital strategy and enterprise platforms. “With SB Nation specifically, we think the combination of our brands and the scope of our content will allow us to leapfrog the competition.”
SB Nation, meanwhile, in the WEEI deal expands a local-market strategy first launched last June. Boston was among the first batch of local-market sites SB Nation created, and its current total of 21 local hubs combines for nearly 4 million unique visitors a month, according to internal metrics.
“We see a great deal of traction in our local strategy, and this [WEEI deal] is definitely an instance where joining forces puts us in an even better position to go after local and super-regional sponsors,” Bankoff said.