News

SET Sets Performance-Based Tyson Rate Card

12/20/1998 7:00 PM Eastern

Cable operators will have to generate buy-rates of more
than 5 percent to earn a 50 percent split of revenues from Showtime Event
Television's Jan. 16 Mike Tyson-Frans Botha pay-per-view fight.

The performance-based rate card, agreed to by Viewer's
Choice last week, also requires operators to run at least 500 fight spots, which operators
said would be difficult -- but not impossible -- given the relatively short marketing
window.

Donovan Gordon, senior vice president of sales and
marketing for SET, would only confirm that the rate card would net SET 55 percent of the
fight's PPV revenues up to a "certain" buy-rate, at which point SET would
split revenues evenly with operators.

Sources close to the situation, however, placed the
required buy-rate at 5.75 percent for systems and 5.95 percent for MSOs.

Given the current addressable-cable-household universe of
28 million, the fight would have to generate 1.7 million buys for the industry to retain
50 percent of the split. That would make the event the second-biggest fight of all time,
behind the 1.9 million buys generated by Tyson's last ring appearance, against
Evander Holyfield in 1997.

"We're satisfied with the deal," Gordon
said. "This is the first big event after a slow 1998, so the industry should hit the
ground running with it."

The deal isn't much different from SET's past
Tyson rate cards. In fact, Michael Klein, senior vice president of programming for
Viewer's Choice, said the fight is the third of a four-Tyson-fight agreement reached
between SET and Viewer's Choice prior to the November 1996 Tyson-Holyfield fight.

"We executed a four-fight deal prior to
Tyson-Holyfield I, and this is a continuation of the deal, although some elements are
different and a little less complicated for operators," Klein said.

But the biggest difference is the marketing window. While
operators had months to promote each of the first two fights, the industry has less than
one month to push the Jan. 16 event, and it will be required to implement about the same
amount of marketing tactics as it did for prior Tyson events.

Along with running the required cross-channel fight spots,
operators will have to offer five marketing tactics, according to the rate card. Among
those tactics are running an additional 100 cross-channel spots, developing local retail
tie-in promotions, offering SET's 23-hour countdown show and conducting an
SET-approved theft-of-service campaign.

Further, 75 percent of required cross-channel spots must
appear weekdays between 6 p.m. and 1 a.m. and weekends from noon to 1 a.m., three weeks
prior to the event. The spots must air on such networks as ESPN, Fox Sports Net, Cable
News Network, MTV: Music Television, USA Network, Turner Network Television, Black
Entertainment Television, Comedy Central, Discovery Channel, The Univision Network and
Telemundo.

At least one Midwest operator wasn't sure if there
would be enough time to effectively meet all of SET's demands. "We're going
to try to do our best, but it's going to be difficult, to say the least," that
operator said.

But both Gordon and Klein believe that the marketing
requirements can be met within the short time frame. "We would have preferred more
time to take advantage of [promotional opportunities], but a lot of operators have already
made plans in preparation for a Tyson fight," Klein said.

And the fight should attract attention from the mainstream
media. The bout is the first for Tyson since he bit Holyfield's ear during their 1997
rematch. The Nevada Athletic Commission subsequently banned Tyson for life, but the
commission gave him his boxing license back in October.

Given the publicity surrounding Tyson, Klein believes that
the fight could approach the 1.6 million buys generated by the first Holyfield-Tyson
fight. "There's already a curiosity factor surrounding Tyson's first fight
back, and I think that there's a good possibility that the fight could match the
Tyson-Holyfield numbers, if not surpass them," he said.

March