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
Coke will also have a membership on the network's board of directors,
occupied by Chuck Fruit, senior vice president of worldwide media and
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
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.