Get ready for more changes in the college sports media landscape. The BCS, Big East and SEC are in the middle of negotiations that have the potential to reshape the marketplace yet again.
The BCS opened its media rights negotiations with incumbent ESPN earlier this month, and the network has an exclusive negotiating window through the end of October. ESPN also is in the midst of an exclusive negotiating window with the Big East that started in early September and also ends this month. But the BCS talks are far more likely to close quickly, as ESPN looks to complete a sweep of the new college football postseason that begins in 2014.
ESPN acquired the rights to the Rose and Champions bowls, paying an average of $80 million a year for each game over 12 years. Industry sources say the network also has reached an agreement for the Orange Bowl for $55 million a year over 12 years. That deal has been negotiated by the ACC because it has the tie-in with the Orange Bowl and it will collect the revenue from the game under the new arrangement.
The Big Ten and Pac-12 share the rights fee from the Rose Bowl, while the Big 12 and SEC are partners on the Champions Bowl.
Now that terms have been reached on the Orange Bowl to go with the Rose and Champions, ESPN has secured all three of the “contract bowls” in the new playoff structure. Each of those bowls will likely be the site for four of the 24 semifinal playoff games during the 12-year cycle.
The rest of the games — the other semifinals, all 12 championship games and other BCS bowls, like the Fiesta and possibly the Cotton and Chick-fil-A — are the games included in ESPN’s current talks with the BCS.
The conference commissioners, Notre Dame Athletic Director Jack Swarbrick and BCS Executive Director Bill Hancock are leading the talks for the BCS, along with consultants Chuck Gerber, a former ESPN executive, and Dean Jordan from Wasserman Media Group.
Sources expect ESPN to maintain its aggressive stance to lock up the rest of the BCS package. Estimates have the total rights fees for the new playoff structure exceeding $700 million a year. ESPN already has $215 million tied up in the three contract bowls.
Fox also is in the running for the BCS rights, though it is not considered a formidable contender. Turner Sports also has been mentioned as a potential bidder, though it remains a long shot at best. Industry sources do not expect ESPN to partner with another network for the college football playoff rights.
The Big East, meanwhile, is not expecting to cut a deal with ESPN during its exclusive negotiating period and will take its media rights to the open market after its window with ESPN closes at the end of the month. Bevilacqua Helfant Ventures and Evolution Media Capital are representing the Big East in its media rights negotiations.
But that does not mean ESPN is out of the running. One of the Big East’s most valuable properties is its men’s basketball tournament at Madison Square Garden. Sources say the conference is attempting to leverage that tournament as much as it can to drive up the value of the overall package. But ESPN, because of its desire to keep rights to a tournament that it has carried for more than three decades, is still expected to maintain a portion of the Big East package.
Fox, NBC Sports and CBS Sports also are expected to talk to the conference when ESPN’s window closes. Sources say the conference is almost certain to split its package among two or more networks. NBC, CBS and Fox need programming to fill the schedules at their all-sports networks — NBC Sports Network, CBS Sports Network and the expected Fox Sports 1. The Big East also is planning to reach out to nontraditional media companies such as Apple, Google and Netflix to gauge their interest in acquiring live sports rights.
The league is hoping that the number of media companies vying for rights will create a bidding frenzy that would push up the value of its media package. In April of last year, the conference turned down an offer from ESPN that would have been worth more than $130 million annually.
But the conference’s membership has shifted dramatically with the loss of West Virginia this year to the Big 12, and Syracuse and Pittsburgh next year to the ACC. With four new schools coming from Conference USA and two from the Mountain West, the Big East will be hard-pressed to build its value. The media deals for Conference USA and Mountain West range from $10 million to $12 million a year.
Finally, in Birmingham, Ala., the SEC is working with CBS and ESPN to renegotiate its rights fee, which experts believe will grow from $205 million a year to close to $300 million annually. The conference also is making plans with ESPN to form its own branded network.