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SBJ/November 12-18, 2012/Media
ESPN homes in on 12-year BCS package
Total for postseason payout put at $7.3B
Published November 12, 2012, Page 1
ESPN is close to securing media rights for the entire college football playoff system, with industry sources pegging the new 12-year BCS package at $500 million a year.
That means ESPN would own college football’s postseason for a total of $7.3 billion over 12 years, beginning with the 2014 season. That figure, which averages to around $608 million per year, takes into account the $215 million annual payout ESPN has committed to the “contract” bowls — the Rose presented by Vizio, Champions and Discover Orange — in addition to the playoff package.
While a formal announcement could come at some point this month, industry sources cautioned that the two sides still have some contract details to hammer out. Sources say the TV committee, made up of five commissioners, must ultimately approve the deal before it becomes official. A final version of the contract has not yet gone before the TV committee.
However, sources say ESPN and the BCS commissioners have reached a broad agreement that will keep the games on ESPN, which still has two seasons left on its current deal.
Four years ago, ESPN surprised the sports business with a daring $495 million deal for BCS rights over four years. The deal was far higher than the incumbent Fox was willing to pay and convinced the BCS to bring its five games per season from broadcast to cable for an average of $125 million a year.
This year, it appears ESPN is not willing to test the BCS’s strength on the open market. The two sides are still working inside an exclusive negotiating window, which opened Oct. 1. Many rights holders like to wait out the exclusive period, believing that they will see bigger rights fees once their rights hit the open market. In the case of the BCS, Fox was waiting to kick the tires. NBC and Turner also were rumored to show interest in the package. But ESPN long has been considered the front-runner to secure the rights to the new playoff. The only question was whether ESPN might share those rights with another network.
It’s not an uncommon arrangement these days. ESPN has joint media rights agreements with Fox for the Pac-12 and the Big 12, while CBS and Turner Sports share the rights to the NCAA men’s basketball tournament.
But as the negotiations between the BCS and ESPN have progressed, it’s become clear that ESPN plans to keep the rights to the playoffs for itself.
With a total package of BCS bowl games, including the playoffs, going for $608 million annually, the BCS’s rights fee will approach the money the NCAA makes for March Madness. The NCAA’s package with CBS and Turner pays an average of $771 million annually over 14 years.
In total, the BCS package includes 12 national championship games and 24 semifinal games within the new college football four-team playoff that begins with the 2014 season, as well as the rights to three “access” bowls that will be in the BCS mix: likely the Tostitos Fiesta, Chick-fil-A and AT&T Cotton. The BCS has not finalized the lineup of access bowls.
There have been reports that a seventh bowl could be added to the package to grant access to the BCS for the five non-power conferences — the Big East, Mid-American, Mountain West, Conference USA and Sun Belt — but sources say the BCS will stick with its original plan of six games.
One “contract” bowl, the Champions Bowl (a matchup of SEC and Big 12 teams), will become the Allstate Sugar Bowl, which won the bidding for the game last week.
Back in the summer, ESPN negotiated separate deals for the Rose and Champions (now Sugar) bowls, at $80 million annually apiece. ESPN’s deal for the Orange Bowl will pay $55 million a year.
The Big Ten and the Pac-12 share the revenue for the Rose Bowl, while the SEC and Big 12 share the Sugar Bowl money. The ACC and its opponent will split the Orange Bowl revenue.
When those games are plugged in as semifinals for the playoff, that money will be distributed to all of the FBS conferences through the BCS.
One of the complications in the talks between ESPN and the BCS has been the structure of the playoffs. The BCS still has not announced how often the Rose and Sugar bowls will be included in the four-team playoff and how often those games will remain separate from the playoff.