SBJ/March 18-24, 2013/Media

TBS poised to get Final Four two years early

Turner likely to exercise its option for next year

TBS appears likely to carry the Final Four and two Elite Eight games next year, two years earlier than planned, thanks to an option in the agreement that CBS and Turner signed when they jointly acquired the NCAA’s media rights more than two years ago.

When the two networks won the NCAA’s rights in 2010 for $10.8 billion over 14 years, the original plan called for CBS to broadcast the Final Four and Elite Eight through 2015, with Turner picking up the Final Four and two Elite Eight games in 2016. The two networks then would alternate carrying the Final Four, while splitting the Elite Eight, for the remainder of the contract.

A little-known clause in the deal gives Turner the ability to take over the Final Four beginning in 2014.

No official decision has been made, and nothing is expected to be announced officially until later in the spring. But several industry sources expect Turner to act on that right and put the Final Four and two Elite Eight games on TBS next year.

Kevin O’Malley, a veteran media consultant who worked with Chuck Gerber to assist the NCAA on its media deal, said, “CBS and Turner do have the ability to make changes. It’s fair to say that a few years ago, they probably wanted to keep the finals on over-the-air TV, but that time really has passed. Cable now is considered just as good of a platform for big events as over-the-air TV. There used to be a rigid line there, but it really has blurred. This contract was sort of a sign that such a time was coming.”

Such a move, obviously, would benefit Turner. Picking up the Final Four two years earlier will help as it renews its cable and satellite affiliate deals. The Final Four is the type of marquee event that networks use to pressure distributors into agreeing on affiliate deals. Distributors currently pay 62 cents a subscriber per month for TBS, according to SNL Kagan. TNT brings in $1.27 and truTV makes 12 cents. Turner, through programming like the NCAA tournament, wants to increase those payments.

Moving the Final Four next year to TBS would continue the migration of big sports events from broadcast to cable. ESPN carries the BCS championships exclusively and an NBA conference final. Turner Sports carries an MLB league championship series and an NBA conference final. NBC Sports Network carries two exclusive Stanley Cup Final games.

CBS has broadcast the Final Four every year since 1982. The network certainly would miss out on the exposure that comes from hosting the highly rated Final Four and national championship game. Last year, the championship game generated an impressive 12.3 rating, while the Final Four’s late game posted a 9.6.

But sources said any potential move would not hurt the network financially, because the share of money CBS and Turner make through their partnership stays constant regardless of the channel that hosts the game. Through their deal, Turner is responsible for capping any potential losses CBS might incur each year.

No money or other assets are expected to change hands as part of the negotiations for the 2014 Final Four, sources said.

The NCAA has little, if any, role in the current negotiations. It has no veto power on the Elite Eight and Final Four’s potential move to Turner next year, sources said. The NCAA did not respond to questions about the CBS and Turner talks.

“You would think that, by signing the contract with both media companies, the NCAA’s approval would be implicit,” one source said.

The NCAA media deal is more complicated than most rights deals because CBS and Turner share the rights. The NCAA has one deal with CBS and Turner. The two networks also have a separate agreement that outlines how they will manage the rights jointly.

A statement from CBS and Turner last week acknowledged: “As part of the original 14-year deal, there was a provisional option for rotation of the Final Four and national championship to begin in 2014. There is currently no timetable for a decision.”

The original deal calls for the two media companies to operate as one team on broadcasts, marketing and sponsorship sales, and digital — essentially encompassing all of the rights included in the NCAA deal. When it comes to the NCAA tournament, CBS and Turner share everything from sales teams to their on-air talent during the tournament.

For example, the Final Four broadcast team is made up of Jim Nantz and Clark Kellogg from CBS and Steve Kerr from Turner. On the sales front, Turner’s Will Funk and CBS’s Chris Simko have worked to merge their sales teams when it comes to NCAA corporate sponsorships. The production trucks typically have a CBS producer sitting next to a Turner producer.

The first four rounds of the tournament are shared between CBS and three Turner channels: TNT, TBS and truTV.

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