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SBJ/December 10-16, 2012/MediaPrint All
The fact that Maryland and Rutgers are joining the Big Ten Conference doesn’t guarantee that their games will be on the Big Ten Network. In fact, several of their games may not be available locally at all — TV or broadband — when they kick off their Big Ten seasons in 2014.
Maryland and Rutgers face the possibility of having at least two football games and at least 15 basketball games go untelevised locally when they join the conference in a year and a half.
That’s because the Big Ten Conference is looking into a strategy that could keep all Maryland and Rutgers games — encompassing all sports — off of the Big Ten Network unless local distributors place the channel on an expanded basic tier. The Big Ten used that strategy successfully in Nebraska last year when the Cornhuskers joined the conference, and the conference is expected to use it again in 2014 when Maryland and Rutgers join.
That means Terps and Scarlet Knights fans should brace themselves for distribution battles with some of the country’s biggest cable operators just before the 2014 football season opens.
Comcast is the dominant cable operator in the Washington, D.C., and Baltimore markets, and carries the Big Ten Network on its sports and entertainment tier. In New Jersey, Comcast and Cablevision carry the channel on a higher-priced sports tier.
But the school administrations and conference officials do not want to place any live games on sports tiers in the Big Ten’s home markets. If the Big Ten Conference opted to sell Maryland and Rutgers games to the Big Ten Network from the beginning, Cablevision, Comcast and Time Warner Cable would have no incentive to move the network off of their sports tiers. Instead, if the Big Ten Network is unable to reach a deal with the distributors, local Maryland and Rutgers fans only would have access to ESPN-produced games.
The Big Ten Network is 51 percent owned by Fox and 49 percent owned by the Big Ten Conference.
The most likely scenario would have the conference selling Maryland and Rutgers games to the Big Ten Network once the channel’s distribution hits a specific percentage of the home markets, most likely around 70 percent.
The Big Ten did not have to employ this strategy in Nebraska last year, when the state’s biggest cable operators, including Time Warner Cable and Charter, cut deals for the Big Ten Network weeks before Nebraska was scheduled to open the season. But the conference was prepared to keep Nebraska’s football games out of the market if those deals were not made.
If only one distributor in Nebraska agreed to make the switch, the conference would provide games for that distributor to carry on a locally originated channel, sources said. The conference planned to sell rights to stations in the markets of Nebraska’s opponents. If Nebraska played Iowa, for example, the Big Ten Conference would sell the game to a local channel in Iowa, not in Nebraska.
The conference has not made any decisions on how it would proceed in Maryland and New Jersey. But sources say it is likely to use a similar blueprint that it used in Nebraska.
The switch to move the Big Ten Network off of sports tiers in Maryland and New Jersey will cost distributors. Currently, the network costs around 15 cents per subscriber per month outside of the Big Ten’s core market. Inside the conference’s core market, though, the price jumps to around 80 cents.
It’s unclear when the five-year-old Big Ten Network’s current carriage deals expire. But the network will have to try to convince some distributors to open up their deals early, which won’t be easy.
When the conference adds two schools, it triggers a clause that allows it to open its media rights contracts with ESPN and the Big Ten Network to account for the new schools. The Big Ten Network will use similar reasoning to open its contracts with cable and satellite operators. By adding local schools, the channel should re-set license fees.
It’s unusual for cable and satellite operators to open affiliate deals before they expire. The Big Ten is expecting the leverage of live, local games will convince them to do so.
Each December, executives with the World of Outlaws, a winged sprint car racing series, knew exactly which of their events would be broadcast on Speed in the coming year. But as of last week, the series was still waiting to finalize programming plans for 2013 and eager to hear what Fox Sports’ planned conversion of its motorsports channel Speed into an all-sports channel might mean for their sport.
The Rolex Grand-Am Series has a contract with Speed ending in 2013.
For years, Speed’s appetite for motorsports content, its distribution in 81 million homes, and its identity as a destination for motorsports enthusiasts made it a logical place for lower-tier racing series to place time buys and cut rights agreements. Now, series ranging from Lucas Oil Off Road Racing to AMA Pro Flat Track are trying to come up with alternative plans.
“Going after a traditional network makes sense for (Fox),” said Bob Patison, vice president and head of sports marketing at Lucas Oil, which owns a half-dozen motorsports series and bought 60 original hours of programming on Speed this year. “Unfortunately, it leaves out a segment of the motorsports world that may be without a home. It’s leaving a hole.”
NHRA President Tom Compton believes the conversion will divide the motorsports industry into the haves and have-nots. The haves will be the bigger, established bodies like NASCAR, the NHRA, IndyCar and others that will have more competition for their rights from all-sports channels. The have-nots will be grassroots series that lose their broadcast home.
“A lot of the smaller series depended on Speed and their thirst for that sort of content,” Compton said.
That type of division reminded Patti Wheeler, who ran the motorsports production company Wheeler Television for more than 20 years, of what happened to grassroots racing after NASCAR cut its first unified TV deals with Fox and NBC in 2001. Until then, networks like TNN and ESPN bundled NASCAR with smaller series like the American Speed Association, a Midwestern stock car series, and sold advertising across all of its motorsports broadcasts. A media buyer for Budweiser would buy NASCAR and get the World of Outlaws, Wheeler said, and that allowed TNN and ESPN to pay the smaller series modest rights fees. But when NASCAR moved to Fox and NBC, the business model no longer worked.
“It was ugly,” Wheeler said. “NASCAR got bigger and bigger. Everything else fell further behind. Now it’s going to be worse.”
Patison and Lucas Oil hope to mitigate the loss of Speed by shifting programming to MavTV, the cable channel that the company bought last year, and launching an online grassroots motorsports channel. MavTV, which is in 6 million homes, will pick up six prime-time hours of motorsports programming a week.
“Grassroots is a cornerstone of our marketing and has been for 24-plus years,” Patison said. “It is the foundation of all motorsports, and if it starts to die, it’s like the roots dying on a tree. Sooner or later it’s going to affect the entire tree. That’s why we’re fighting to preserve it.”
World of Outlaws and AMA Pro Racing are both in discussions with Speed about programming for next year. They plan to explore opportunities with outlets such as CBS Sports Network and ESPN in the future if they can’t find a place on Speed.
“Losing Speed takes away a natural home,” said Ben Geisler, chief marketer at World Racing Group, which runs the World of Outlaws. “Everyone could have to work harder to find a home for programming, but it might spread it out a bit and not have [motorsports] so saturated in one place.”
Several series aren’t concerned. The Monster Energy AMA Supercross series has a deal with Fox Sports through 2014, and Ken Hudgens, chief operating officer at series owner Feld Entertainment, said he expects it to be part of Fox Sports’ plans. The Rolex Grand-Am Series, which recently acquired the American Le Mans Series, has a contract with Speed that ends in 2013, but Grand-Am CEO Ed Bennett believes the changes at Speed and the merger of the series will create more demand for TV rights to sports car racing.
> Get ready for Fox Sports 2.
Fox still hasn’t formally announced its plans to turn Speed into Fox Sports 1 yet. That should happen early next year, with a formal rebrand in August. But don’t expect Fox’s plans to end with that. Fox is going to switch Fuel into Fox Sports 2 next year, as well. Fox has enough programming to support two cable sports channels, and the name Fuel does not fit within the Fox Sports brand. Fox Soccer as Fox Sports 3? That’s a prediction for next year’s column.
> The NBA will renew its media rights deals with ESPN and Turner.
The NBA’s deals with ESPN and TNT end in 2016. But league Commissioner David Stern wants to complete one final media rights deal before he leaves in 2014. ESPN and Turner will pay a substantial increase to extend their packages. The NBA will try to carve out a third package for a digital media company such as Google, but ESPN and Turner will pay enough to prevent that.
> NASCAR signs a deal with NBC; leaves ESPN and Turner.
NBC will outbid ESPN for NASCAR’s end-of-season packages that currently are on ESPN and Turner. The move complements NBC’s recent purchase of Formula One rights. It also provides highly rated live programming (through several NASCAR Sprint Cup races and the Nationwide Series) for NBC Sports Network, which has struggled to find viewers. With the move, NASCAR runs the risk of having fewer highlights on “SportsCenter.” Ultimately, it decides to move to the highest bidder and NBC.
> The Big East splits its rights package between ESPN and NBC.
Remember last year, when the Big East rejected ESPN’s media rights offer of an average of $130 million per year? The Big East won’t come close to that figure this year, but ESPN and NBC will split a package of Big East games that will pay out around $60 million per year on average..
> The NFL’s Thursday night experiment will continue.
The NFL has heard complaints about the quality of games on Thursday nights, but the package’s ratings success ensures it will continue on NFL Network next season. By 2014, the league will carve out some of the games in a package that ultimately will land on Turner.
> NBC Sports Group opens talks to buy Root Sports’ three RSNs from DirecTV.
Fox Sports is on a regional sports network buying spree, grabbing YES Network and SportsTime Ohio, as well as renewing the Dodgers rights. NBC Sports Group wants to keep pace and will try to buy DirecTV’s three Root Sports RSNs. I don’t expect a deal this year, but that doesn’t mean I won’t write about it.
> Cable carriage deals
This feels like the do-or-die year for Longhorn Network. I get the sense that cable operators will continue to resist cutting a deal with the channel. … The Pac-12 Networks will cut a DirecTV deal. … Another year will pass, and Tennis Channel will remain in its current packages on Comcast despite all the court proceedings to date. … Fox won’t have big problems persuading distributors to allow it to switch Speed into Fox Sports 1. Expect the real fireworks to occur when it starts to negotiate its new RSN deals with distributors.
Next month’s BCS title game on ESPN will become the most-viewed show in U.S. cable TV history. If it’s a close game, it will get 31 million viewers, which will wipe out the old cable record: 2011’s Auburn-Oregon game, which averaged 27.3 million viewers. … MASN’s dispute with the Nationals will not be resolved and will end up in court. … Small cable operators will make a lot of noise about a la carte. Nothing will happen.
Those are my predictions for 2013. I expect you to hold me to them.
John Ourand can be reached at email@example.com. Follow him on Twitter @Ourand_SBJ.