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Volume 22 No. 7
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Not so fast: Conference USA/Fox deal faces scrutiny

The $43 million media rights deal that Conference USA signed with Fox last month may not be as final as the two sides originally thought.

The conference’s incumbent rights holders — ESPN and CBS College Sports — are questioning C-USA’s new deal with Fox, which was signed the first week in January.

ESPN believes its contract with C-USA gave it the right to match any offer. CBS College Sports, which has its own separate agreement with C-USA through 2016, believes it had the first crack at the package if it ever left ESPN, according to sources.

ESPN and CBS College Sports are questioning the conference’s new deal.
In a prepared statement, ESPN told SportsBusiness Journal: “Conference USA never fulfilled their contractual obligation relating to ESPN’s future rights. We are exploring possible solutions to resolve this situation but remain prepared to take any necessary steps to protect our rights.”

Conference USA spokeswoman Courtney Morrison-Archer disagreed, responding in an e-mail: “We have great respect for ESPN and have appreciated our partnership. We disagree with the assertion that ESPN was disadvantaged and are disappointed that they feel as if they were. On the contrary, ESPN had every opportunity to step up and address our concerns. Following a long and protracted discussion, the conference board of directors voted to move in a different direction. Conference USA reached an agreement with Fox on terms clearly more favorable than those offered by ESPN, and we believe the conference fully complied with its contractual obligations to ESPN.”

Relations between the conference and ESPN have become so strained that the network threatened legal action against Conference USA. Sources say that ESPN executives were angered when they were told the conference had a deal with Fox and believed that the conference had not negotiated in good faith. ESPN executives say they had an oral agreement on a new deal with the conference and were working to finalize it when the Fox deal was announced.

ESPN and C-USA had a meeting as late as Dec. 23 to negotiate final points of their potential deal, sources said. On Jan. 4, however, C-USA Commissioner Britton Banowsky called ESPN executives to say that the conference’s presidents elected to explore other opportunities. The next day, the conference announced its deal with Fox.

ESPN believed its contract mandated that the conference present it with a final offer, giving ESPN the right to match. That was never done, ESPN sources said.
Since the conference closed its deal with Fox on Jan. 5, it has spent the past several weeks talking with ESPN and Fox to see whether there’s a compromise that would allow both networks to share games, industry sources said. However, a source with knowledge of the talks offered little hope that negotiations would reopen and insisted that ESPN missed its opportunity to retain the rights.

The new contract is set to kick in with the 2011 football season and runs through the 2015-16 academic year.

Fox and ESPN executives have not met face to face. Rather, they have been making their pitches to Wasserman Media Group’s Dean Jordan, the consultant hired by Conference USA to negotiate the media deal, sources said. Jordan said last week that he could not comment and referred all inquiries to Conference USA.

ESPN, Fox and the conference, however, are no closer to finding a compromise than they were at the beginning of this process, according to those sources, and there appears to be little willingness from the conference to negotiate new terms.

CBS College Sports has not threatened legal action. But sources said the network would be placated with extra live game programming.

The Fox deal allows it to show a minimum of 20 regular-season football games. Fox picks the first 10 football games; CBS College picks the next 10; and Fox picks the final 10.

If the new contract holds up, the football championship game will be televised on FSN, Fox Network or FX. The deal also includes a minimum of 10 regular-season basketball games.

Conference USA lauded the contract with Fox at the time because it meant a nearly 100 percent increase in rights fees and that its football teams wouldn’t be playing regularly on Tuesday, Wednesday or Friday nights, as they sometimes did on ESPN. The Fox deal does call for some games on Thursday nights.