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Levy laughs last: Despite industry doubts, NCAA deal pays off

Turner’s NCAA tournament deal was supposed to mark the death of David Levy’s career.

Critics allege that the Turner Broadcasting System president overpaid for the rights and assumed too much of the risk for the deal that was signed in 2010. The theory went that Levy got into bed with a declining sport, one that was oversaturated on television and decades removed from its heyday.

When Levy signed the 14-year, $10.8 billion deal in 2010, rival sports media executives rolled their eyes. In private conversations, many smart, high-profile executives predicted that Turner never would be able to make money off the event. The fact that the deal called for CBS to cap its potential losses offered further proof that the Turner executive signed a bad deal, they said.

Fast forward five years to 2015, and it’s clear that those predictions were way off base. The deal may not be a bargain at an average of $770 million per year. But in what’s perhaps the best sign that it’s a good deal, it’s clear that Turner executives would cut the same deal again in an instant.

I caught up with Levy last Monday to ask how the deal has progressed now that Turner and CBS are five years into it. He admitted that he has heard all of those complaints about the pact, which at the time was the largest sports deal ever written in terms of total dollars.

Those complaints, though, aren’t being voiced anymore.

LEVY
Speaking a few hours before the NCAA championship game would tip off, Levy was energized as he talked about what the deal has meant for Turner. What’s most interesting about Levy’s responses is that he barely mentioned the TV ratings for this year’s tournament, which were the event’s biggest in two decades.

Rather, he spoke of Turner’s digital growth, pointing out that the company didn’t have Bleacher Report when this contract started. He talked about CBS and Turner’s sponsorship and activation efforts, which have grown significantly since Turner first became involved with the 2011 tournament. And he talked about carriage fees for TNT, TBS and truTV, all of which he said have grown thanks to the NCAA tournament.

“This event has just gotten bigger and bigger,” Levy said. “When we first looked at taking this on, our vision was to treat this like a three-week Super Bowl.”

Turner executives say they would cut the same deal again.
Photo by: GETTY IMAGES
In that vein, Levy was particularly happy to see the way advertisers treated this year’s tournament. He pointed to the TV commercials, many of which were tailored to the event. He specifically referenced Capital One, which featured spots with Charles Barkley, Spike Lee and Samuel L. Jackson, and Amazon, which used Reggie Miller and Steve Smith to promote its Kindle Fire.

“Our advertising strategy was twofold,” Levy said. “The first was to get them to produce ads around the tournament. The second was to get them to produce enough of them so that throughout the tournament, you could rotate the ads so there’s not that frequency with the same ad where it becomes almost annoying.”

Some advertisers, like Capital One, created advertising to run exclusively on digital.

The big game-changer with Turner’s involvement is that every game now is available on TV, which has led to the bigger audiences. The Final Four always has been a big and successful event. Levy believes it has grown even bigger since that 2010 deal.

The atmosphere in Indianapolis certainly carried that big event feel. Levy talked about weekend concerts, where Rihanna drew more than 20,000 people to a Saturday night concert and the Zac Brown Band drew a similar crowd for a Sunday night performance. Organizers had to turn people away both nights because White River State Park had reached capacity.

“What happened on Saturday night was really why we purchased and why we became a part of this event,” Levy said, pointing to TV ratings and on-site concerts. “Plus, March Madness Fan Fest was packed. When I first came and saw what was happening and where it is today — it is just night and day with the sponsors that are in there now. That’s all managed through the partnership.”

Next year, TBS will carry the championship game for the first time. Levy said his executive team has not yet met to plan for the event. But it seems obvious that viewers can expect the Team Streams to return. “The Team Stream was more of a success this year, after last year when it had some challenges, with people really, truly understanding what we were doing,” he said.

It also seems obvious that CBS and Turner plan to continue to expand the Final Four into one of the year’s marquee sporting events. Turner will use the event to lead into its NBA playoff coverage in April and May.

“Here we are outdelivering 19-year-old ratings,” Levy said. “This is what we bought. This is why we bought it.”

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.

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