Cable Nets Tee Up Pricier Rights Fees

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With one major deal announced last week and another likely to be done this week, the cost of sports rights continues to escalate for cable networks.

ESPN last week inked a $200 million, 11-year deal for 21 National Collegiate Athletic Association championship events, highlighted by expanded coverage of the women's college basketball tournament.

And the Professional Golfers' Association (PGA) — riding high on the appeal of golf sensation Tiger Woods — is expected this week to sink a hefty rights-fee gain from the broadcast and cable networks. Industry executives believe its take could reach $1 billion over a four-year pact, beginning with the 2003 season.

Sources said ESPN, USA Network, The Golf Channel and Turner Network Television are all bidding for a number of marquee tournaments that could help boost ratings, but would likely drain a substantial amount of cash. Sources said the PGA could announce its new deals as early as July 11.

While PGA officials did not return phone calls seeking comment, a number of reports have the organization poised to score a major increase from its current four-year, $575 million package with broadcasters CBS, NBC and ABC and cable networks ESPN, USA, Fox Sports Net, Turner Network Television and The Golf Channel.

Already a major college-sports player, ESPN last week positioned itself to become the de facto home of most NCAA championships. Beginning in 2003, ESPN will televise all women's NCAA college basketball tournament games, as well as 20 other college championships — including the men's baseball College World Series — under an 11-year agreement valued at more than $200 million.

The estimated value of the pact represents a major jump from the $2.7 million in rights fees ESPN was paying each year. CBS, as part of the $6 billion, 11-year deal it inked for the men's basketball tournament in November of 1999, offered some $200 million for the aforementioned college championships.

Had CBS secured the rights, Black Rock may have apportioned a number of the games to two of parent Viacom Inc.'s cable holdings, TNN: The National Network and Black Entertainment Television. ESPN's negotiating window expired on July 2.

ESPN officials would not say whether the package would trigger new license-fee increases, but president George Bodenheimer called it a significant value-added programming acquisition.

"Cable operators want value for what they pay for, and if you look at the package on a dollar-by-dollar basis, any rational [person] would say this is a high-quality deal for the operators," Bodenheimer said.

ESPN — which televises 23 women's college basketball tournament games under a current deal with the NCAA that expires next season — will offer all 63 games from the spring tournament, the network said. The early rounds will be available via pay-per-view as part of the network's Full Court out-of-market college basketball package, ESPN senior vice president of programming John Wildhack said.

The women's NCAA tournament has been a strong ratings producer for the network, particularly the latter-round games. Last March's semifinal and championship games averaged a 2.64 cable rating, up 9 percent from a 2.43 average in 2000.

As part of the new agreement, the Women's Final Four and championship contests will be moved from Friday and Sunday to Sunday and Tuesday, a change that could occur as early as next year. The schedule shifts, subject to approval by the NCAA Division I Championships and Competition Cabinet, would also include moving the first two rounds from a Friday/Saturday format to a Saturday/Sunday setup, and spreading the regional semifinals and finals over four days, rather than two.

In addition, ESPN will air a special program from the open practice sessions at the Women's Final Four, said NCAA president Cedric Dempsey.

Expanded Promo Plays

The network will also provide eight highlight programs during the women's tournament, as well as an annual promotional campaign to run from November to March on ESPN and ESPN2.

"This new agreement allows the Association to continue its relationship with the network that has helped establish the Division I Women's Basketball Championship as a premier event," Dempsey said. "The enhanced primetime exposure is a great improvement."

ESPN and NCAA executives would not break out the cost of the tournament relative to the more than $200 million deal, but Bodenheimer said it was the "cornerstone" of the agreement.

ESPN executives also said a significant portion of the $200 million plus price tag is based on yet-to-be-determined "promotional campaigns," which ESPN will develop for the tournament and other NCAA events through the length of the deal.

"No one delivers more national exposure and cross-promotional value than ESPN," Bodenheimer added. "This is great for college sports and the women's basketball tournament."

Along with increased women's college-basketball coverage, ESPN will also add two contests to its coverage of the men's College World Series, including the final game, which CBS had aired.

Other NCAA championships in the new package include men's ice hockey, gymnastics and wrestling, and men's and women's indoor track and field, soccer, swimming and diving, tennis and volleyball.

ESPN will also partner with CBS on a number of promotional efforts that will take place during the broadcaster's coverage of the men's "March Madness" tournament. ESPN will telecast the play-in game of the NCAA men's tournament, which TNN carried last March, and air a special from the Friday practice sessions at the Men's Final Four.

On Course

As to the PGA's play, Paul Kagan Associates sports analyst John Mansell believes the golf organization is well-positioned to ace the networks. He said that golf's recent broadcast ratings success — outside of NASCAR, it's the only marquee sports property consistently generating year-to-year ratings growth — and the still-growing appeal of Woods could net the PGA a sizeable jump in rights, despite the sluggish economy.

"I wouldn't be surprised if the PGA receives an increase well above projections, given the number of networks bidding and their need for the programming," Mansell said.

Hoping to make a major move is Comcast Corp.-owned The Golf Channel. With 38 million subscribers, the 24-hour, golf-based service could benefit from expanding its current PGA slate of early-round coverage from 10 tournaments and full-round coverage of four other events.

A Golf spokesman would not comment specifically on the network's bid.

Sources said ESPN, which holds TV rights to 19 PGA tournaments, is expected to retain most of its golf package. Network executives would not comment on ongoing negotiations.

Fox Sports Net executives said the company has talked to the PGA about securing future tournaments but would not comment further. TNT, which currently telecasts two PGA tournaments, also declined to comment on its negotiations.

USA Network, which televises 14 PGA events, is also in the negotiations mix, sources said, although representatives from the Barry Diller-owned channel would not comment on its participation.