SBJ/July 18-22, 2011/Media

IndyCar, Indianapolis Motor Speedway extend bargaining window with ESPN

Faced with an expiring broadcast TV deal, the IndyCar Series and Indianapolis Motor Speedway extended their exclusive negotiating window with ESPN for rights to the Indianapolis 500 and four other races.

The exclusive negotiating window, which was set to end in June, was extended until the end of July. IndyCar officials are optimistic that they will be able finalize a new deal by the end of the month. Their clear preference is to keep the races on ABC, which has held the rights to the Indy 500 for 46 consecutive years. The parties held their first negotiations in late April for a new deal to replace the $6 million a year agreement that is set to expire this year.

Negotiating a new deal has been challenging for IndyCar. In 2008, the sanctioning body signed over exclusive cable rights to Versus, which televises 12 races annually as part of a 10-year, revenue-sharing agreement. The deal means that all races that are part of the package ESPN buys must be aired on broadcast television.

But ESPN has been spending the past two years moving sports off of its broadcast outlet onto cable. Earlier this month it signed a deal to move all live action of Wimbledon to cable. In January, it set cable viewing records when it moved the BCS to cable. And last year, it moved the British Open from ABC to ESPN.

IndyCar CEO Randy Bernard said that Versus’ cable exclusivity will not make an agreement with ESPN/ABC harder. The series is trying to add races to its broadcast schedule, which it believes will provide more content for ABC and increase the series’ network exposure. But ESPN is primarily interested in the Indianapolis 500 and does not relish the prospect of adding smaller races to its broadcast schedule.

“We believe Versus is a very solid partner,” Bernard said. “What we will try to do now is determine how we can best have a network deal to complement [cable].”

If ESPN does not close a new deal with IndyCar, the series will have to look elsewhere. NBC Sports, which includes Versus, has expressed some interest in getting the races for NBC, sources said. Fox, which has been at the table for many recent rights deals, has not showed much interest. Bernard said he expects the series to have a new deal by October at the latest.

Barry Frank, IMG Media executive vice president, who is advising IndyCar, said there’s nothing to read into the extension of ESPN’s exclusive negotiating window. He said IndyCar wanted to give its longtime partner more time to make a decision.

“We want to do the right deal,” Frank said. “There’s no need to hurry it.”

Viewership for IndyCar races are up 14 percent this year. Through eight races on ABC and Versus, the series is averaging 1.832 million viewers, up from 1.606 million in 2010, according to Nielsen. That excludes one rainout this year and one rainout last year.

Bernard has been outspoken about the need to improve ratings, going so far as to offer to resign if it doesn’t earn a 1.2 Nielsen rating for its last race of the year in Las Vegas on Oct. 16, broadcast on ABC. That means it would have to quadruple the 363,000 viewers the race drew on Versus last year, which Bernard is confident it can do because the race is on network TV this year.

“I love what I’m doing, but if I can’t drive our ratings up, I’m not the right person,” Bernard said.

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