NBC Universal and Fox are bidding for rights to the FIFA World Cup, currently held by MLS subsidiary Soccer United Marketing and sub-licensed to ABC and ESPN.
The rights for the 2010 and 2014 men’s World Cups, along with two women’s World Cups and a host of other tournaments run by FIFA, will likely be awarded by the end of the year or January at the latest, said several people involved in the talks.
SUM, ABC and ESPN say they’d like to keep rights to the sports property, which is rivaled only by the Olympics for its global following. But NBC Universal is making a joint bid that would include Spanish-language rights for Telemundo, which NBC acquired in 2002. Telemundo’s much-larger rival, Univision, has held World Cup rights since 1982, and is paying $150 million for the 2002-06 package, which also included the 2003 Women’s World Cup.
 |
| Soccer United Marketing picked up World Cup rights not long before the 2002 event. |
Fox likely will bid only on the English-language package, which sources say cost Soccer United Marketing $40 million for 2002-06. Games would appear on the broadcast network and Fox Soccer Channel, which reaches about 25 million homes, and possibly other Fox Cable properties such as Fox Sports Net.
The 2010 men’s World Cup will be held in South Africa. The 2014 site has not yet been awarded but will likely be in Latin America, meaning a more U.S.-friendly time zone.
Various people involved in the talks said they expect FIFA to command a sizable rights fee increase on both the English and Spanish sides, which could take the total well north of $250 million.
“In 1998, there was really only one entity remotely interested in the whole thing and that was ABC and ESPN, and it was sort of a push to get them involved,” said Doug Quinn, president of SUM. “The fact that multiple parties are interested in getting involved in World Cup is now absolutely a sign that soccer in America is not only growing as a sport but as a business.”
The shift happened in the last four years.
When SUM negotiated its initial deal with FIFA in late 2001, it faced no competition, as the U.S. team finished last in the 1998 World Cup, and NBC, Fox and CBS all said they had no interest in obtaining the future rights. SUM then reached a deal with ABC and ESPN, which agreed to show the games for a fee, with SUM handling all advertising sales and covering production costs.
The United States then made it to the World Cup quarterfinals in East Asia in 2002, but broadcast ratings suffered because almost all games were shown on tape delay, with ABC dipping from a 2.6 average in 1998 to a 1.4.
The live games on cable, though, were somewhat of a round-the-clock sensation, with ESPN jumping 18 percent in ratings and 39 percent in households, and ESPN2 up slightly despite carrying games from obscure countries in the wee hours of the morning.
Univision had similar success across its broadcast network and multiple cable networks, with about as many people watching in Spanish as in English nationwide. In Los Angeles, twice as many people watched the final on Univision than on ABC.
Since then, the World Cup also has emerged as more of a strategic fit for the major media companies, all of which own multiple networks and have an eye on the exploding Hispanic market.
Fox has rebranded Fox Sports World as a soccer channel, and is looking to greatly expand that network’s distribution base.
NBC Universal and parent General Electric paid nearly $2 billion in stock and assumed debt for Telemundo, which is outpaced in prime-time ratings by Univision by nearly a 4-1 margin. The World Cup represents the sort of appointment viewing that would be a quick avenue to steal share from its dominant competitor, and GE has been willing of late to invest in major sports properties to help lift overall network ratings, as evidenced by NBC’s recent $600 million-a-year deal for NFL rights.
NBC, which had broadcast rights to the World Cup in 1986, also has had success spreading the Olympics across multiple cable channels such as USA, CNBC and MSNBC, as it likely would do with the World Cup.
NBC Universal Sports spokesman Mike McCarley would not comment on the talks other than to say, “World Cup is one of the very best properties in all of sports.” But sources say NBC Universal Sports Chairman Dick Ebersol is leading the negotiations, side-by-side with top officials from Telemundo.
Tony Vinciquerra, president and CEO of the Fox Networks Group, is taking the lead for Fox, which wouldn’t comment.
Quinn said SUM would likely work with ABC and ESPN again if it keeps the rights, but did not rule out sub-licensing to NBC Universal or Fox. He said that would largely be contingent on who ends up having television rights to MLS. The league’s ABC/ESPN deal expires at the end of the 2006 season, and he said renewal talks are happening now. He also noted that SUM works in some capacity with all the bidding entities, as Fox Soccer Channel carries MLS games and Telemundo carries the Mexican national team, which SUM represents. In the past, MLS games have been on both Telemundo and Univision.
FIFA World Cup was the first rights package that SUM picked up, finalizing the deal in early 2002 and not hitting the market with advertising packages until February of that year, just five months before the tournament.
For the current cycle, SUM was pitching official sponsors more than a year ago and other advertisers in January of this year.
Quinn said Adidas has purchased a $10 million presenting sponsor package for all the ABC and ESPN telecasts. An additional three or four “platinum” sponsors will pay about $8 million for ad strips and enhancements across every game. He said close to half the inventory has already been sold, and the platinum sponsors will be announced in the coming weeks.
“This will be profitable now,” he said.
SUM does not have a right of first refusal in its FIFA agreement, so the rights could go to a rival at any time.
ESPN has held the rights to every World Cup since 1982 with the exception of 1990. ABC has held it since 1994.
ABC/ESPN spokesman Mac Nwulu said the company would not comment on active negotiations but that it has every intention of keeping the rights.
“We are interested in the World Cup,” he said. “We have a long history with all the World Cup events, including the Women’s World Cup. It’s a big product on the air and we are the only outlet that provides multiple platforms to show all the games live.”
