CSTV Gets $10M from Coke
By Simon Applebaum -- Multichannel News, 4/7/2003 7:58:00 AM
The Coca-Cola Co. is jumping into an equity bed with a cable channel for the first time, investing $10 million in College Sports Television, the niche digi-net premiering Monday night.
Under a letter of intent signed by Coca-Cola, the beverage maker will also spend $5 million on advertising on CSTV, supplemented by integrated marketing and promotional activities connecting the channel with cable-operator affiliates.
Coke will also have a membership on the network's board of directors, occupied by Chuck Fruit, senior vice president of worldwide media and alliances.
DirecTV Inc. is the only multichannel distributor signed up for CSTV. Cable-operator contract talks continue, with some agreements projected to be finalized by the end of April.
Coca-Cola's agreement "not only brings in a substantial new investor, but redefines the way an independent network gets launched and branded," CSTV CEO Brian Bedol said during a press-conference call Monday morning. "It gives us an opportunity to tap into their legendary branding power."
With the deal, Bedol's channel also expects to benefit from Coca-Cola's new $500 million sponsorship contract with the National Collegiate Athletic Association, covering 87 championship events over the next 11 years.
Coke anticipates having some spots on CSTV's debut show Monday night, recapping the college-basketball season. The channel's Sunday-night block of Notre Dame sports, announced last week, will also have Coke presenting spots. That venture premieres this fall.
"This creates a true partnership between content providers, media distributors and marketing partners," Fruit added. "You'll see more of these equity deals in the months ahead."
Anheuser-Busch Cos. Inc. has such a deal going with Brief Original Broadcasts, the digi-net offering short independent films and videos that anticipates starting later this year.
Fruit acknowledged that Coca-Cola president and chief operating officer Steve Heyer -- hooking up there last December after several years in the same capacity at Turner Broadcasting System Inc. -- played "a significant role" in the CSTV equity negotiations.
For opening night, Bedol said, the channel has "a handful to a handful-and-a-half" of advertisers signed up, including Sports Illustrated magazine. More advertisers and marketing deals will be released in the weeks ahead.
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