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The Southeastern Conference has completed the buy-back of its TV, digital and sponsorship rights from third parties, clearing the final hurdles to launch its TV channel with ESPN next year.
The conference and ESPN will make a formal announcement on the yet-to-be-named SEC channel, which will launch in August 2014, at an event Tuesday in Atlanta.
Like the Big Ten Network and Pac-12 Networks, the SEC’s version will be a national channel, with broad distribution within the SEC’s territory and sports-tier carriage elsewhere. Over the next 15 months, the conference will work with ESPN to build out its operation, possibly in Charlotte at ESPN Regional Television, and hire a staff, all while beginning talks with distributors.
The conference channel cleared its biggest obstacle in recent weeks when it reacquired the third-tier TV rights from IMG College, Learfield Sports and CBS Collegiate Sports Properties, the three rights holders that work with the conference’s 14 schools. Those third-tier TV rights represent one football game, eight men’s basketball games, baseball, women’s basketball and all other nonrevenue sports that are not picked up by ESPN or a syndicated partner.
Those live games will move to ESPN for the conference channel, which is an important development because it means that ESPN will control the entire inventory of SEC football games, with the exception of CBS’s single game each week. That gives ESPN a lot of flexibility to use specific games in markets where it’s having trouble gaining distribution. If, for example, one of Louisiana’s biggest distributors, Cox, is holding out and not agreeing to carry the channel, it will be easier for ESPN to place more LSU games on it to help it gain more leverage in those negotiations.
Such leverage is important, as negotiations with distributors have been the most difficult part in the launch of college conference networks. The Big Ten Network went through bruising carriage battles, particularly with Comcast and Time Warner Cable. The Pac-12 Networks still has yet to cut a deal with the nation’s biggest satellite distributor, DirecTV.
The value of the third-party rights the conference bought back is significant and comes after nine months of off-and-on negotiations. The rights holders agreed to give up TV rights valued at roughly $15 million a year. In return, those rights holders will lessen the guarantees to their schools by the same amount — a little more than $1 million a year for each school — for the next several years, industry sources said.
The conference also gained control of its digital and sponsorship rights that will be rolled over to ESPN as well. That will enable ESPN to have TV, digital and sponsorship rights for the conference under one umbrella. Being able to package TV and digital advertising in corporate sponsorship deals is considered a vital revenue component, and neither the conference nor ESPN wanted multiple partners selling those rights in the marketplace.
Digital rights for the SEC are coming back from XOS Digital, the company that created the SEC Digital Network in 2009, for an undisclosed sum. The SEC’s corporate sponsorship program has been sold and managed by IMG College in the past.
ESPN Regional will oversee the corporate sponsorship program. ESPN Regional also runs the Big 12’s sponsorship program. Ben May, general manager for IMG College’s SEC property, is considered a leading candidate to move with the sponsorship program over to ESPN Regional.
“The conference and the schools will be strengthened by this new arrangement,” IMG College President Ben Sutton said of the SEC. “It was a very productive negotiation. There’s always a little pain along the way, but both sides worked really hard to get this done.”
Sutton and Hunter Nickell, IMG College senior vice president, negotiated on behalf of the rights holders, since IMG College has the most schools in the conference at 10.
In an interesting twist, Tom Stultz of JMI Sports represented the SEC on the negotiations. A former executive at Host Communications and IMG College, Stultz actually wrote many of these multimedia rights contracts from the other side of the table. He parted ways with IMG at the end of 2011 and later joined JMI Sports.
SEC Commissioner Mike Slive, executive associate commissioner Mark Womack, and associate commissioners Mark Whitworth and Charlie Hussey were at the table for the conference. ESPN executives were not part of these talks, even though the network will benefit. The SEC said it would not comment on the network until a formal announcement is made.
The negotiations for third-tier TV was similar to what the Pac-12 went through when it bought back its third-tier TV to start the Pac-12 Networks in 2012. Even though the third-tier football and basketball games generally consist of the least attractive matchups, they have value to the conference networks because they represent live programming. That’s especially the case for the SEC, which typically draws the highest regular-season TV ratings in college football.
Meanwhile, ESPN is in the process of regaining its syndicated rights from Comcast SportsNet and Fox Sports Net. Both RSNs currently buy SEC games from ESPN. The syndicated deal with Comcast SportsNet ends after the 2013-14 school year. The deal with Fox ends after the 2014-15 school year.
Sutton said the new arrangement will not mark the end of IMG College’s relationship with the SEC. The company will continue to manage multimedia rights for its existing partners in the league — Arkansas, Auburn, Florida, Georgia, Kentucky, Mississippi, South Carolina, Tennessee and Vanderbilt.
Those multimedia rights include radio, individual school corporate sponsorships, signage on campus, hospitality and other promotional assets.
Alabama’s property is a joint venture between Learfield and IMG College. Learfield also has properties at Mississippi State, Missouri and Texas A&M. LSU works with CBS Collegiate Sports Properties.
In the past, IMG College, CBS Collegiate and Learfield exploited the third-tier TV rights by broadcasting games on a pay-per-view basis and packaging TV advertising into sponsorship deals. Those TV rights were more valuable at some SEC schools than others. Arkansas, Florida and Kentucky were among the schools where third-tier TV rights generated the most revenue.
Miami Dolphins owner Stephen Ross’ dream of transforming Sun Life Stadium into a center for soccer in the United States could get a big boost this summer by way of an international tournament involving some top soccer brands.
Details are sparse, as organizers had yet to finalize deals with the teams or media outlets by deadline. But talks have progressed far enough that Ross’ RSE Ventures has scheduled a press conference for Tuesday in Miami to unveil the single-elimination tournament.
Stephen Ross will bring international teams to Sun Life Stadium.
Photo by:GETTY IMAGES
Financial terms of the Fox deal are not known.
The tournament will feature eight teams playing matches on both U.S. coasts in as many as seven stadiums. The tournament’s format will be single-elimination, featuring at least one team from the top leagues in England, Germany, Italy and Spain. A Major League Soccer club, most likely the Los Angeles Galaxy, also will participate, sources said.
Veteran soccer executive Charlie Stillitano is handling negotiations with the teams for RSE Ventures, which will pay for the teams to participate. A source said a marquee team like Manchester United could command as much as $2 million. Smaller upper-division clubs would cost around $500,000.
The tournament will culminate in two games at Sun Life Stadium in early August. It’s expected that the tournament winner will get a cash prize of around $1 million.
Insignia, a New York marketing firm that is a supporting company for Ross’ RSE Ventures, is handling branding and sales.
“Sometimes, the guarantee for a big European team will be bigger than a million, so this may be more of a marketing ploy than anything else,” said Mark Noonan, former MLS executive vice president of marketing, who now heads consultancy FocalSport. “You can make some decent money if you control the venue, so that may be Ross’ play here.”
Ross announced plans for a $400 million upgrade of the 26-year-old facility earlier this year. The renovation would include a canopy roof, in the style of many Euro soccer stadia, with plans to have this in time for the 2016 Super Bowl, which the stadium hopes to host.
Local officials have been meeting to determine the date of a referendum on the portion of the renovation to be publicly financed.
MLS has its sights on adding an expansion franchise in Miami, with Ross as the owner. A strong showing with the pair of matches in August would help push Miami as a top soccer city in the U.S. The Miami Fusion joined MLS in 1998, but the club was under-financed and folded in 2001.
Organizers have shopped the tournament around to other media outlets. ESPN, which previously carried the World Football Challenge — a collection of “friendly” matches — passed on it, sources said. ESPN2 averaged 220,000 viewers for the five World Football Cup matches it carried last year, down considerably from the 419,000 viewers it averaged in 2011 for nine telecasts.
CAA Sports used to own the rights to the World Football Challenge but sold the rights last year to RSE Ventures, a company founded by Ross and Matt Higgins in 2012. In October 2012, RSE hired Stillitano and Jon Sheiman from CAA Sports to be CEO and COO of the company’s soccer division.
International Champions Cup organizers say their event is different because it’s set up as a single elimination tournament and not just a round of friendlies.
The move comes as Fox is in the process of rebranding its Fox Soccer Channel into an entertainment channel called FXX. It will launch an all-sports channel called Fox Sports 1 in August.
Fox lost rights to the English Premier League to NBC starting this season. But it still holds rights to the 2018 and 2022 World Cups.
Last June, Miami’s Sun Life Stadium carried an exhibition match called World Soccer Masters that drew a crowd of 48,000 in a driving rainstorm. Fox Soccer Channel carried the match live. This won’t be RSE Ventures’ only soccer push this year, as it’s organizing a pair of Manchester City-Chelsea friendlies this spring: May 23 in St. Louis and May 25 in New York. It also is organizing an Ireland-Spain match for New York and a Spain-Haiti match for Miami this spring.
Staff writer Christopher Botta contributed to this report.
The NBC Sports Group is halfway through its move to Stamford, Conn., with 250 employees already working out of the company’s new headquarters and four shows already being produced from there.
The remaining 250 or so NBC Sports Group employees will be in place by July 1, completing a move that will make the Nutmeg State home to two of the country’s biggest sports media companies, ESPN and NBC.
NBC Sports Group’s digital, creative and operations departments are working out of the facility’s 220,000-square-foot sports production building. The building eventually will house a newsroom, six studios and control rooms, and more than 50 edit rooms. NBC programming, including “NHL Live” and coverage from its Formula One races, has been produced in Stamford since early December.
Some shows, like “Football Night in America” and “The Crossover,” will continue to originate from studios in NBC’s 30 Rock building in Manhattan.
David Mazza, senior vice president and chief technical officer for NBC Sports Group, is overseeing the project. A veteran of 12 Olympic Games, Mazza is responsible for building NBC’s operations at the International Broadcast Center every two years. This project reminds Mazza of building the IBC, even if it is four to five times bigger.
By the end of this month, an additional 25 to 50 executives from the digital and creative departments plan to relocate to the Stamford offices. The rest of the NBC Sports Group — including public relations, human resources, programming, finance and legal — will move in June.
Ad sales will remain in Manhattan, and senior executives will keep offices in both locations.
The 100,000-square-foot administration building still is being renovated but should be ready by June.
NBC is making the move to take advantage of tax breaks that Connecticut offers to the TV and film industry. It also will save money by moving out of high-rent offices in Manhattan and downtown Philadelphia.
The move consolidates four offices. In addition to Manhattan and Philadelphia, NBC Sports Group operated two offices in Stamford, where NBC Sports Network had a studio and NBC Sports Group’s digital and Olympics Web team had an office. Golf Channel will remain in Florida.