SBJ/Nov. 23-29, 2015/Media

Projecting how Big Ten rights race will play out

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The Big Ten Conference is expected to start negotiating its new media rights deal in the spring. The last big sports rights deal of the decade, common wisdom has long been that the conference will command huge increases over the 10-year, $1 billion deal it has with ESPN and the six-year, $72 million deal it has with CBS for basketball. Both deals run through the 2016-17 seasons.

Common wisdom, however, could run into market realities, where a smaller cable TV universe will put pressure on how much networks can afford to pay out.

My bet is that the conference will see a huge rights fee increase and that ESPN and Fox Sports will come up with money to split the rights. Two significant factors, though, bear watching — either of which could throw a wrench into the Big Ten’s aspirations for a big payday.

First: Will ESPN’s recent round of cost-cutting affect how much the Disney-owned channel can offer?

Second: Fox Sports already has a massive rights portfolio that could keep its bid from reaching the heights that the sports market saw last year.

WHAT THEY'RE SAYING
Are you interested in Big Ten Conference rights?


SAM FLOOD, executive producer, NBC Sports: “We’re interested in anything that makes business sense.”

JAMIE HOROWITZ, national networks president, Fox Sports: “Of course we’re interested in the Big Ten. It’s an incredibly valuable property, and these things only get more valuable. There’s not a lot out there right now.”

LES MOONVES, president and CEO, CBS Corp.: “We’d always look at it. We look at every deal.”

JOHN SKIPPER, president, ESPN: “We love the Big Ten. We want to remain in business with the Big Ten.”

So far, every TV network is singing from the same songbook when it comes to the Big Ten. Over the past month, top executives with CBS, Fox, NBC and ESPN announced their interest in at least kicking the tires on the conference’s media rights when its current deals end after next season.

The presence of four networks bidding up the rights suggests that the conference is going to benefit from a bidding war and see huge increases from its current deal.

But that interest is not as strong as it may appear.

Nobody considers CBS Sports a serious bidder. CBS has been disciplined when it comes to bidding on sports rights. It didn’t bid on the NBA or MLB deals, satisfied with its NFL, SEC, NCAA basketball and PGA Tour relationships.

“We are really happy with this portfolio,” CBS President and CEO Les Moonves said. “There comes a point where you have to decide what business you’re in.”

Similarly, NBC Sports Group appears to be a long shot for the Big Ten rights. NBC has employed a strategy of courting sports that it carries exclusively. NBC is the only place fans can watch the NHL, EPL and Olympics. It exclusively carries the second half of the NASCAR season.

Given that NBC is not a big player in college sports — other than its deal with Notre Dame football — it’s hard to see it committing the money it would take to share the media rights for one college conference.

That leaves the same two networks that dominate the college sports media scene: a trimmer ESPN and a fully scheduled Fox. ESPN and Fox already share rights to the Big 12 and Pac-12 conferences.

ESPN made headlines over the last several months, losing subscribers, paying more in rights fees, laying off about 300 employees and refusing to pay some of its best-known on-air talent enough to keep them in Bristol. Even in declaring ESPN’s desire to keep Big Ten rights, company President John Skipper referenced limits to how much ESPN could pay for any media rights.

“I would call Big Ten top-tier, great programming,” Skipper said at the Sports Media & Technology conference last month. “You can’t call anything must-have, because there is a point in time when you may have to walk away from any programming.”

Urban Meyer and Ohio State make the Big Ten Conference a hot college property.
Photo by: GETTY IMAGES
Even in the current environment, ESPN has showed that it will pay for the rights that it really wants. Last month, for example, it paid more than $110 million for a package of European soccer rights, outbidding BeIN Sports, Fox Sports and NBC Sports.

I would not be surprised to see ESPN go after a reduced package that would give it access to, perhaps, 12 or so football games each season alongside a regular basketball schedule. With Jim Harbaugh at Michigan and Urban Meyer at Ohio State, it’s essential for the network to have access to two of the biggest brands in college sports.

Fox has not been as public as ESPN with cost-cutting moves. But its relatively new Fox Sports 1 channel has absorbed several big rights deals, from the World Cup and U.S. Open golf to MLB and NASCAR.

Fox Sports already has a relationship with the Big Ten — it owns 51 percent of Big Ten Network. It has deals with big conferences like the Big 12, Big East and Pac-12. It’s hard to envision a scenario where Fox does not put forth a strong bid.

The market may not be as frothy as it was in 2011, when ESPN, Fox Sports and NBC Sports vied for the Pac-12’s rights. But all it takes is two networks to create a bidding war.

I expect ESPN and Fox Sports to at least double the conference’s annual average payout and share the rights.

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

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