ESPN interested in bidding for the rights to March Madness

[TMC1982]

http://www.usatoday.com/sports/coll...interested-in-bidding-for-march-madness_N.htm

By Michael McCarthy, USA TODAY
NEW YORK — If the NCAA opts out early next year from its 11-year, $6 billion contract with CBS for the men's basketball tournament, ESPN would be interested in bidding for the rights to March Madness, said Burke Magnus, ESPN's senior vice president of college sports programming.

CBS' contract runs through 2013. But the NCAA has the right to opt out by July 31, 2010. If it does, it would leave CBS's annual rights fees, according to NCAA numbers, of a little more than $2.2 billion for 2011-2013 in search of a bigger payday from another TV partner.

"We do 1,100 college basketball games a year and they all lead to one thing and that's the NCAA tournament," Magnus told USA TODAY Wednesday. "If it were to become available, and fit the definition of a business decision for us, I'm quite certain we'd be interested."

Mike Aresco, executive vice president of programming for CBS Sports, declined to comment on whether the NCAA might opt out early: "We have a great relationship with the NCAA. We expect to be in business with the tournament for a long time."

ESPN annually carries the play-in game on Tuesday night of the tournament's first week. Prior to the current contract, ESPN carried some early round men's games.

But it has been under the CBS banner that March Madness took off in popularity, virtually dwarfing the regular season.

If ESPN were to get the Big Dance, nobody would be happier than analyst Dick Vitale, who is reduced to studio duty in March instead of being courtside.

"I know Dick would be the first one on line there. It would be great for him and great for the sport," Magnus said.

ESPN already has the NCAA women's basketball tournament, is taking over the Bowl Championship Series games next year and has said it would be interested in the Olympics.

The NCAA did not return phone calls and e-mails seeking comment.

 

[BlackLantern]

if ESPN is willing to pay the price tag, why not?

 

[Raiden]

ESPN is already showing alot of NCAA football, so why not? I watch more ESPN than CBS Sports anyway.

 

[Dr. Evil]

ESPN interested in March Madness? Why not? It will only help enhance their network further. Of course, then you will probably have Brent Musberger calling games, which I don't know if it's a good thing or a bad thing.

If ESPN getting the Olympics means that we get to see Jeff Van Gundy and Marc Jackson get into a shouting match during Olympic Basketball, then that's a win for ESPN/ABC.

 

[BlackLantern]

ESPN shows a lot of regular season college ball, so I always felt they kinda got the shaft once the tourney came around...they couldn't even show live highlights until certain games had finished or something

 

[Shifty]

Do you think Comcast would ever make a bid now that they have the NBCU Family of channels? They could air games on NBC and USA plus they have Versus and other Comcast regional channels.

 

[Dr. Evil]

Do you think Comcast would ever make a bid now that they have the NBCU Family of channels? They could air games on NBC and USA plus they have Versus and other Comcast regional channels.

It's possible if NBCU loses the broadcast rights to the Olympics after 2012.

 

[TMC1982]

http://www.sportsbusinessjournal.com/article/64263

Though it has floated the ideas of expanding the tournament and moving it to cable, the NCAA is not committed to making any changes. It also is talking with TV networks about whether they are interested in the tournament as is. The NCAA’s current deal with CBS is heavily backloaded. More than a third of the total value — $2.13 billion — is due to the NCAA in the final three years.

But the potential expansion of the NCAA tournament has support in collegiate circles, particularly from college basketball coaches. The idea talked about with TV networks would likely take it from its current field of 65 teams to 96 teams and add another week to the competition, with the top 32 teams receiving byes. The move has been characterized as folding the NIT into the NCAA tournament.

The NCAA clearly expects that the added week of games would significantly increase the tournament’s rights fee. A larger field would mean more content, more scheduling opportunities and theoretically more revenue for the broadcaster and the NCAA, which derives more than 90 percent of its total annual revenue from the tournament’s media deal. Nearly all of that revenue passes through the NCAA and is distributed to its member institutions.

The study of an expanded tournament is simply part of the analysis, sources said, and there’s no certainty that the NCAA will go in that direction. The governing body of intercollegiate athletics also is discussing the current tournament format with broadcasters.

The NCAA also believes a move to cable could increase its revenue, especially given last year’s deal ESPN signed with the BCS, which agreed to move its five annual games to cable in exchange for a 50 percent increase in its rights fee. ESPN paid $495 million over four years for those rights.

ESPN’s dual revenue stream of affiliate fees and advertising allows it to outspend broadcasters, and the NCAA is looking to see if it can get a piece of that revenue.

The NCAA also has an out in its deal with ESPN after this season for its collegiate championship events, like the women’s NCAA tournament and College World Series. It is gauging interest in those as part of the same package as the NCAA tournament.

 

[Shifty]

CBS and Turner may be teaming up for a joint bid but ESPN looks to have them beat, interesting info about cable channels.

Will ESPN Outbid CBS, Others for Rights to NCAA Basketball Tournament?

Posted on 03 February 2010 by Robert Seidman

Without anyone seemingly paying much attention, ESPN has become the Google of cable TV sports. How long before regulators set their sights on it?

On Monday, the Sports Business Journal wrote of CBS and Turner considering a joint-bid for the rights to the NCAA Men’s basketball tournament if the NCAA opts out of its current deal with CBS. The article focuses on a lot of things, including the potential expansion of the tournament to as many as 96 teams and how Turner and CBS might split the telecasts in the event the NCAA opts out of the current contract and a joint CBS/Turner bid wins.

What’s more surprising to me is what the article doesn’t focus on. First, why the NCAA might want to opt out to begin with.

The NCAA is considering whether to opt out of its 11-year, $6 billion contract with CBS after the Final Four in April. The deal has three years and $2.131 billion remaining.

OK, so it’s a no brainer that just like the reasons to consider expanding the tournament, the reason to opt out of the current contract is money. Which brings me to the thing that surprised me most in the article: that ESPN is only mentioned once, and merely in passing as a potential bidder at that.

I know hardly anyone is interested in cable network carriage fees, and broadcast network retransmission fees — the amounts paid by the various cable and satellite providers to the networks. But this is a good context to have that discussion.

In fact, if I’m the NCAA, aside from expansion — which just makes sense from a “more teams = more games = more money” perspective — it’s the cable carriage fees that have me interested in considering rebidding the rights.

Particularly ESPN’s, because ESPN is so much higher than anyone else. The estimates from SNL Kagan for 2010 shake out that on average, ESPN makes $4.10 per month/per cable or satellite subscriber. Just for ease of rounding, figure 100 million subscribers, so ESPN is raking in nearly $5 billion dollars a year just in subscriber revenue — that doesn’t count any of the advertising. The reason Turner makes a good partner, I suppose is that TNT is at least in the top 3 when it comes to carriage fees — but it’s less than a fourth of ESPN!

Here are the top 3:

* ESPN: $4.10/subscriber/month
* FOX Sports Net $2.37/subscriber/month
* TNT: $.96/subscriber/month

Because the various FOX Sports Nets are regional and not national, I’m not sure what its coverage is nationwide and because of its regional nature, Nielsen doesn’t roll it up into its coverage estimates. As of December, Nielsen estimated ESPN was available in over 99 million homes. I’d guess Fox Sports is in less than that, but how much less, I can’t really speculate.

Clearly, winning the bid for the NCAA Men’s B-Ball tourney rights if CBS opts out of its current contract and puts it up for bid would put FOX Sports Net on the map.

Turner has a little more in its war chest since it could include the revenue from TBS (estimated at $.47/subscriber/month).

But clearly ESPN is in the best position as far as a war chest full of cash goes. ESPN has already snagged up future BCS rights (college football) and it surely will be considering making a bid for the Olympics when it becomes available.

From my perspective, unless I’m missing something (usually a safe bet) the interesting angles to this story are what motivation ESPN’s war chest of cash plays in the NCAA’s thinking and that it’s pretty clear it plays a big role in CBS’ thinking. Why partner with Turner? Because it probably can’t afford to compete with ESPN on its own.

Without anyone paying much attention, ESPN has become the Google of cable TV sports. How long before regulators set their sights on it?

For the record, I’m not saying ESPN has an unfair advantage due to revenue derived from cable carriage fees. But clearly it has an advantage. I’m sure ESPN’s competitors consider it unfair.

I don’t think it’s “unfair”, and I’d say good for ESPN. That said, I do think ESPN’s revenue from carriage fees is more than it should be for what it offers. ESPN’s carriage fee revenue is bigger than TNT+ Turner + USA Network + Nickelodeon + FX….combined. Those 5 networks combine for $2.79 a month vs. ESPN’s $4.10.

And that doesn’t even include the $.54/month/subscriber estimated for ESPN 2.

ESPN is a big network, even with the Nielsen ratings. But so much of that is fueled by Monday Night Football. Last week, even with the highest-rated, most-watched Pro Bowl in a decade, ESPN still trailed USA Network, both in total day viewing and in primetime.

I think ESPN certainly deserves a premium due to the popularity and demand for live sports. Whether that premium should be set at more than twelve times more than MTV ($.33/mo/subscriber) or more than seven times more than USA Network (which routinely beats ESPN in the ratings) is another story.

 

[NewYorkSpider]

Didn't ESPN want to broadcast the Super Bowl as well?