June 27 - July 3, 2011 Vol. 14 — No. 11

Top Stories

  • MetLife eyes the Meadowlands

    MetLife is in advanced discussions with New Meadowlands Stadium to upgrade its corner sponsorship at the year-old facility to a full naming-rights deal. A source close to the deal described the negotiations as “very advanced, but not complete.”

  • Larry Scott's ability to find consensus helps change Pac-10's culture

    Larry Scott was 7 years old when his father would take him to Woodbury Country Club on Long Island and throw tennis balls to him. Forget about the net, his father would say. He wanted young Larry to swing hard enough to hit the balls over the 12-foot-tall fence that surrounded the tennis court. Scott’s been trying to do that ever since.

  • NFL shops new 8-game package

    The NFL is negotiating with TV networks about a new early-season eight-game package that would start as soon as next season, according to several sources.

    The potential Thursday night package could be worth as much as $700 million per year, the sources said. Such a windfall, providing a sudden increase in overall league revenue, could help soften the blow to the players from the emerging labor deal in which they are likely to receive a smaller percentage of revenue than they previously have received.

    The new package would not affect NFL Network’s schedule of live games, as the league has decided to keep its channel’s eight-game Thursday night slate in the second half of the season intact.

    The NFL declined to comment.

    The league is shopping the early-season package to interested networks. Sources said the league currently has the rights to take enough games from CBS and Fox’s Sunday afternoon schedules to fill the new eight-game package and does not have to wait for those contracts to expire after the 2013 season.

    The new revenue could offer solace to the league after it was rebuffed on its efforts to expand the schedule to 18 games from 16 games. The players have fought fiercely against that proposal, so in a way, the league is selling a new half-season this way.

    Turner and Comcast have emerged as the most serious bidders for such a package. Comcast wants the package for Versus, while Turner, which carried a Sunday night NFL package on TNT from 1990-97, has privately craved returning NFL games to its schedule. Turner could put the package on TBS, TNT or truTV.

    Fox is expected to kick the tires on a package for its FX network, but cable industry sources said cable operators have surcharge protection against FX, which would make it difficult for FX to afford such a package.

    No other dark horses have emerged yet, according to sources. It’s believed that ESPN would at least take a look at the Thursday night package, as would Spike TV.

    “There’s going to be another package because when this [labor] deal finally happens, somebody is going to have to pay for it,” said one network executive, who asked not to be identified. “Part of it is going to be paid by a new NFL package.”

    Thursday night games generally are not popular with coaches and players, and they usually don’t draw the audience that NFL games bring in other time slots. But the league views Thursday night as the best night to roll out a new package.
    ESPN and the NFL have agreed to the broad terms of an extension for “Monday Night Football” that would run through 2022-23. The cost there would average out to $1.8 billion per year.

    That deal, first reported in January, still hasn’t been signed, but ESPN sources said the delay is because of the NFL labor situation, not because of haggling over deal terms.

    The NFL has been making progress in labor talks with the players, and there is hope a final deal could be signed next month.

    In 2004, the NFL rejected an offer from Versus that would have paid an average of $450 million per year for an eight-game schedule. The deal also would have given the NFL an equity interest in Comcast’s all-sports channel, then called OLN, sources said.

    At the time, the NFL opted to put the package on its own network.

  • Asking 40 cents a subscriber, Longhorn Network looks to round up distribution

    Two months before its planned Aug. 26 launch, the University of Texas’ Longhorn Network is seeking its first distribution partner.

    Industry sources say that ESPN, which is selling the channel to cable operators, wants 40 cents per subscriber per month for placement on expanded basic cable tiers in Texas and various markets in three adjoining states: Louisiana, New Mexico and Oklahoma.

    At 40 cents, Longhorn Network instantly would become one of the 30 or 40 highest priced cable channels. But the price is relatively low compared with regional sports networks, which frequently command more than $2. A similar channel, Big Ten Network, charged in-market distributors 70 cents for the right to carry its channel when it launched four years ago.

    ESPN is far along in negotiations with several distributors, including two of the region’s biggest operators: Time Warner Cable and Verizon. Many don’t anticipate these carriage negotiations to be as bruising or public as Big Ten Network — which went a year after its launch without carriage on Comcast and Time Warner Cable. But distribution talks for new sports channels like Longhorn Network typically go down to the wire. Industry sources expect ESPN to be negotiating carriage deals with operators in Texas right up to the school’s season-opening Sept. 3 kickoff against Rice University.

    “Talks are ongoing and productive,” said David Preschlack, ESPN’s executive vice president of affiliate sales and marketing. “We’re in good shape for our launch.”

    ESPN appears to have made launching the channel a priority. It has been in talks with Fox Sports Net, which holds the cable rights to Big 12 games, about picking up at least one more Texas football game for the Longhorn Network, sources said. The Longhorn Network now has the rights to just one football game per season. If a deal could be worked out to pick up a second game, Fox likely would seek rights to at least one Big 12 game for its broadcast channel. ESPN holds the Big 12’s broadcast rights.

    The Longhorn Network made up a big part of ESPN’s presence at the cable industry’s annual convention earlier this month in Chicago. Basketball coach Rick Barnes and former football player Ricky Williams made appearances at ESPN’s booth and events. ESPN also has launched a website (GetLonghornNetwork.com) to whip up fan excitement as it tries to cut deals with Texas-area distributors. Outside of Texas and its surrounding states, ESPN is seeking sports tier carriage throughout the rest of the country. It has made several of its channels, including ESPN Classic, ESPN Goal Line and ESPN Buzzer Beater, available for sports tiers, which are premium programming packages that require subscribers to pay extra.

    In January, ESPN formally announced a 20-year, $300 million deal to own and operate the channel. The contract was negotiated with Texas and the Longhorns’ multimedia rights holder, IMG College.

    ESPN’s rights fees flow through the university and IMG College’s cut amounts to 17.5 percent.

    IMG College owns the advertising inventory on the channel and has been on the streets since the spring trying to sell ad time. There have been times, industry sources say, when IMG College and ESPN sales teams have jointly approached prospective advertisers, but the ultimate responsibility to move the inventory rests with IMG College.

    Scott Willingham, IMG College’s general manager for the Texas property, is leading the sales effort in the state. IMG also has a national sales team that it has been putting in place through the spring, and it will contribute as well.

    The distribution duties fall on ESPN, which early on talked with Time Warner Cable about taking a 20 percent stake in the channel. Those talks cooled, though.

    There are 7.75 million cable and satellite homes in Texas, according to MediaCensus 2011 from Media Business Corp. Time Warner is the state’s dominant cable operator, with close to 2 million subscribers.

    Cable operators are not expecting to cut a deal for Longhorn Network easily. It is a first-of-its-kind network centered on one school, and distribution sources say they worry about a domino effect that could lead to other schools launching similar channels.

    Cable operators reacted the same way to Big Ten Network, engaging in bruising carriage fights before launch.

    ESPN expects to have leverage from the university’s wild popularity in the state. It will carry up to 200 live events, including at least one football game, up to a dozen men’s basketball games and Olympic sports. It is building a studio in Austin and plans to produce several studio shows, as well. A complete schedule will be revealed later this summer, but the network has announced a nightly news show called “Longhorn Extra” and a pregame show, “Texas GameDay.” It also plans academic-related programming and cultural/lifestyle shows about living in Texas.

    “Our pitch taps into the passion of Texas Longhorn fans,” Preschlack said. “It’s not just football and basketball. It’s going to be for all things Texas.”

  • China tour could coincide with lockout

    Armed with its star-studded NBA client list, Wasserman Media Group is proposing a basketball exhibition tournament in China as the agency explores moneymaking options for its players should there be an extended lockout.

    In a “China Basketball Tour” proposal summary obtained by SportsBusiness Journal, Wasserman in April began floating a plan to bring 15 to 20 of its NBA clients to China for a two- or three-week tournament if there is a work stoppage. The agency represents 45 NBA players, including this past season’s Most Valuable Player, Derrick Rose.

    NBAE / GETTY IMAGES
    L.A.’s Gasol and Chicago’s Rose are among the Wasserman clients who could participate in the tour.
    Wasserman has partnered with Bruce O’Neil to pitch the concept. O’Neil is founder and president of the United States Basketball Academy and has ties in China as a consultant to the Chinese Basketball Association.

    Though hardly a done deal given the myriad challenges of doing business with the Chinese Basketball Association, the concept of a China tour is a direct example of ways agents are looking to counter the financial impact on players if there is a prolonged lockout. Under standard NBA player contracts, players are paid through mid-April, but many NBA players have provisions in their deals to be paid through October, regardless of a lockout, a union source said.

    “It is too early to give specific details for this promotion at this time, but predicated on a lockout, we are very enthusiastic for this and other events if there is [a work stoppage],” O’Neil said, declining further comment.

    The NBA’s current collective-bargaining agreement expires Thursday. At press time, no deal was close, raising the likelihood of owners voting to impose a lockout.

    The tour would take place only if there is a lockout. The summary does not identify specific players committed to participate.

    NBA labor coverage

    For breaking news on the NBA’s labor situation, visit sister publication
    www.sportsbusinessdaily.com.

    Wasserman initially targeted mid-July for the tour, but organizers now are looking at potential dates in late August or early September. Scheduling is tight, though, as FIBA’s men’s basketball Asian Games are set for late September in China, and the Chinese Basketball Association starts its season in mid-October.

    According to the summary, the proposed tournament aims to match NBA players represented by Wasserman with Chinese Basketball Association players to form at least four teams to play during the exhibition. Targeted locations for the tour include Shanghai, Beijing and Guangzhou, but no deals have been signed with any facilities.

    Wasserman is proposing to sell title sponsorships to the four teams, with the rosters created through a draft of the available players. The company also plans to sell local sponsorships, along with television rights in China for the tour. NBA players represented by Wasserman would receive undisclosed appearance fees as well as money from a performance bonus pool. Sponsorship and media rights would be used to fund startup costs of the tournament, according to the summary.

    Led by Arn Tellem, Wasserman’s player representation division lists such players as Atlanta’s Joe Johnson and Al Horford, Oklahoma City’s Russell Westbrook, Portland’s LaMarcus Aldridge and Brandon Roy, and Pau Gasol of the Los Angeles Lakers.

    Tellem did not return calls for comment.

    While the NBA operates its own NBA China entity, the proposed Wasserman-led tour would not be subject to any league oversight.

    A source said NBA players would not be restricted from playing elsewhere during a work stoppage, but there are major issues for organizers, such as securing player insurance, something that one sports marketing source doing business in China said could make any exhibition cost prohibitive.

    There are also complexities in doing business with the Chinese Basketball Association and various sports federations in China that would have to approve any exhibition.

    “If agents want to put together a group of players and go to China, it is not ultimately their decision to just pick up and go,” said Jeff Sofka, owner of Bendigo Co., a New Jersey-based sports marketing company with business ventures in China.

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