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SBJ/June 4-10, 2012/MediaPrint All
It was two and a half months ago that ESPN and Fox agreed to a 13-year, $2.6 billion deal with the Big 12 Conference.
What’s the catch? The agreement with ESPN and Fox is in the lawyers’ hands.
What’s the holdup? Blame the lawyers.
Sources say the contract is now in front of the attorneys and will lead to a signed deal eventually. But the original agreement in March created a level of strife with some in the Big 12 because the conference declined to take the rights to the open market.
The old ESPN deal with the Big 12 was set to run through 2015-16. While the new terms represent sizable increases in revenue for the conference, some league officials wanted to wait and see what the open market would bring in a few more years rather than tie themselves up in a long-term deal. There was a concern within the Big 12 that the conference might have left some money on the table by not waiting to open up the bidding to other networks. In the past few years, other sports rights holders have found that open-market bidding has helped push rights fees higher.
The problem was that the Big 12 couldn’t have gone to the open market with a full rights package. The only package that was expiring was ESPN’s broadcast-only football package. Last spring, Fox tied up the conference’s cable rights through 2024 as part of a long-term deal. The conference would not have been able to take those rights to market.
Sources said a round of new talks never really got off the ground and the three parties are back to hammering out the details of their original agreement — a single contract that outlines the specifics for ESPN and Fox, which have a similar joint arrangement with the Pac-12.
“This is just a radically different kind of deal,” one source said. “What started with maybe 100 issues is down to about a dozen. It’ll get done.”
All this is going down just as the conference looks ahead to the change in commissioner from interim Chuck Neinas to the newly hired Bob Bowlsby, whose first day officially is June 15.
The new television deal will pay the Big 12 schools an average of $20 million per year, making it among the most competitive college sports deals on a per-school basis. Big 12 schools also have the ability to monetize games that are not selected by ESPN or Fox.
Though the total value is not as rich overall as the Pac-12’s $250 million-a-year deal or the ACC’s recently completed contract with ESPN for an average of $240 million, the Big 12 is distributing the revenue to only 10 schools, not 12 like the Pac-12 or 14 like the ACC.
The average of $20 million per school per year is a sizable jump from the $15 million-a-year average the schools had just a year ago when the conference first extended its Fox deal, which at the time was separate from the ESPN deal.
The Big Ten and Pac-12 will distribute a little more than $21 million per school per year as part of their media deals, while the ACC and the SEC are around $17 million per school annually.
The SEC is in the midst of negotiating increases for its media rights agreement with ESPN, which is expected to include a new SEC cable channel. The Big Ten and Pac-12 schools do not have the ability to monetize any of their football and basketball games because they have pooled their rights with the conference to form TV networks. The ACC and SEC, like the Big 12, currently have greater flexibility to monetize games not picked up by the networks, either through pay-per-view, local TV broadcasts or online broadcasts.
Several reports of possible Big 12 expansion have mentioned Florida State and Clemson from the ACC, Louisville from the Big East, and independent BYU as potential targets, but the conference’s leaders have consistently stated their desire to stay at 10 schools for the near future.
TCU and West Virginia were added after the conference lost Texas A&M and Missouri to the SEC, and earlier lost Colorado to the Pac-12 and Nebraska to the Big Ten. TCU and West Virginia begin play in the Big 12 this fall. Missouri and Texas A&M start playing in the SEC this fall as well.
Fox Soccer Channel does not hold the rights to Euro 2012, the European soccer tournament that starts this week.
“We made a decision more than a year ago that in order for us to evolve as a brand, we need to own the soccer conversation whether or not we own the rights,” said Fox Soccer General Manager David Nathanson.
The channel also plans to set up “Mobile Viewing Parties” in eight U.S. cities to watch certain games. The parties will be hosted throughout June in New York City (June 8 and 11), Boston (June 10), Philadelphia (June 13), Washington, D.C. (June 15 and 16), Portland (June 18), Los Angeles (June 22 and 26), San Diego (June 24) and San Francisco (July 1).
Nathanson said he was gratified enough by FoxSoccer.com’s traffic during last year’s World Cup — another event to which it didn’t hold rights — that it wanted to extend its coverage to include television, too. Last year, Fox picked up rights to the 2018 and 2022 World Cups, plus the Women’s World Cup in 2015 and 2019.
“FoxSoccer.com’s traffic during the last World Cup proved to us that if we extend this to television, we are the place that people will find to talk about the sport,” Nathanson said. “We think we will be a complement to ESPN’s coverage.”
Held every four years, the Euro event is Europe’s premier soccer tournament involving the national teams of 16 European countries. This year, the monthlong event will be held in Poland and the Ukraine.
Fox Soccer will pool video from News Corp.’s international networks, such as Sky Sports News (Britain), Sky Italia (Italy) and Sky Sports News (Germany). The U.S. channel is sending two crews to cover the event — one based in Poland, the other based in the Ukraine. Fox is committing to telecasting its “Fox Soccer Report” nightly from June 3 through July 1.
MindGames Inc., a Los Angeles-based social gaming startup, has secured a group license with the NFL Players Association for its initial product, MindSports Football.
The company was founded by veteran digital media executive Larry Tobin, formerly of Yahoo, Fox Sports Interactive and NHL Interactive, and Eric LaVanchy, founder of online game development company Bottle Rocket.
MindSports Football is a trivia-based game on Facebook that seeks to incorporate elements of social gaming, digital card collecting and fantasy football. The game includes photo identification, various puzzles and virtual NFL player trading cards that can be used for in-game bonuses and, ultimately, real-world prizes.
Company executives have described the game as sort of a sports-themed blend of “Who Wants to Be a Millionaire?” and “Magic: The Gathering.” The company’s revenue model is based on a combination of microtransactions and advertising.
“We’re looking to take seasonality out of the gaming business,” Tobin said. “This is something you can play at any time, and challenge friends whenever it suits you.”
The NFLPA license gives MindGames Inc. rights to use NFL player images and will be supplemented with player promotional appearances. Financial terms were not disclosed.
MindGames Inc. has developed on early-stage seed funding, and is seeking a more formal, institutional Series A round of venture capital funding. A baseball-themed title similar to MindSports Football is in development.
A shuffling of personnel at Raycom Sports has moved producer Jimmy Rayburn into the role of chief operating officer, the media company said.
Rayburn, an executive producer at Raycom since 1986, will oversee the daily operations, strategy and budget as COO. President and CEO Ken Haines will remain in his current roles.
Rob Reichley, another Raycom veteran who has been with the company since 1993, has been elevated to executive producer. Becky Smith, with Raycom since 1985, becomes controller.
Along with these changes, Haines announced that the sales, marketing, client services and promotions departments will be restructured and rolled into one unit under Jeff Tennant, Raycom’s senior vice president.
Raycom also filled the new media vacancy created when Colin Smith went to NASCAR by promoting Chad Swofford to senior director of new media and business development. He will oversee all of the Web and mobile initiatives for Raycom Sports, the ACC Network and the ACC Digital Network.
Raycom’s partnership with the ACC and ESPN gives it syndicated TV rights to the conference for football and men’s basketball and an array of mobile and digital rights.