ESPN Continues Its Rights Scoring Spree With BCS Acquisition

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ESPN continued adding to its sports rights collection last week, reaching a comprehensive, four-year pact to bring the Bowl Championship Series games to cable, beginning in 2011.

The deal, announced Nov. 18, will put the Fiesta, Orange and Sugar Bowls on the total sports network from January 2011 through January 2014, as well as the BCS championship game in 2011, 2012 and 2013. As such, college football's top games --ESPN also will unveil the weekly BCS standings on Sundays when they begin in mid-season -- will migrate to cable from broadcast TV, where they will continue to be televised on Fox through 2010.

The BCS pact, said to be worth some $500 million, followed a Nov. 17 decision by Fox — whose counter offer reached $100 million annually and came to include FX as a home for the three bowl games following ESPN's cable-centric proposal — not to match the ESPN bid.

George Bodenheimer, president of ESPN and ABC Sports, said on the conference call announcing the agreement that the pact would not result in any surcharge for distributors. ESPN collects more than $3 in monthly subscriber fees, the most in basic cable.

The agreement comes on the cleats of a bevy other ESPN multiplatform rights acquisitions and long-term contract extensions this year, a spree encompassing: a $200 million, eight-year deal for the exclusive coverage of the British Open golf tourney from 2010 through 2017; Western Athletic Conference action through 2017; a far-reaching, 15-year, $2.25 billion pact with the Southeastern Conference for football, basketball and Olympics sports until 2023; a sublicensing agreement with Setanta Sports for English Football League and Carling Cup soccer for broadband service ESPN360.com; a shared contract with MLB Network for the 2009 World Baseball Classic; cable and other vehicles for the U.S. Open tennis championships, some of which are sublicensed to Tennis Channel; and Wimbledon.   

Bodenheimer called the championship rights deal the “icing on the cake” for ESPN, which televises college football programming 365 days per year and will lead to further growth for the BCS. He said the Rose Bowl, which has a contract with ABC through 2014, will remain on the broadcast network through 2010, noting that ESPN has not yet determined its schedule beyond that juncture.

Asked about ESPN's position on a college football playoff — President-elect Barack Obama has voiced his support for an eight-team system — Bodenheimer said that was “a decision for the university presidents and conferences.”

As is the case with most of ESPN's rights pacts of late, the BCS agreement extends to a variety of properties, including radio, digital, international vehicles, plus the marketing end for the 15 BCS games over the aforementioned time frame.

On the digital side, ESPN.com will operate the official BCS Web site, bcsfootball.org.

In addition, the games may be simulcast online on ESPN360.com and on ESPN Mobile TV.

Bodenheimer, on the conference call, said ESPN would be utilizing those platforms, but did not specify how. He did note that the company would be mindful of what it does on “the Internet because that impacts our relationship with cable operators.”

The pact also allows ESPN to make BCS games available after the fact on affiliates' video-on-demand platforms and via audio and video podcasts.

John Swofford, BCS coordinator and Atlantic Coast Conference commissioner, said on the call that Fox currently holds the same multimedia rights that ESPN will possess under the new contract.

Fox, according to sources, has turned a profit with the BCS through the first two years of its contract, which averages about $82 million per year.

On Nov. 17, Fox issued the following statement indicating that it was punting, and would not match ESPN’s BCS bid: “Even with today’s vast economic uncertainties, Fox Sports made a very competitive bid to keep broadcasting BCS games free to every home in America, one that included a substantial rights fee increase, and certainly as much as any over-the-air network could responsibly risk. Unfortunately, the university presidents and BCS commissioners were not satisfied and they’ve decided to take their jewel events to pay television. We wish everyone well.”

Many of the reporters on the BCS conference call questioned the loss of another major broadcast sports property to cable. ESPN recently sealed an eight-year deal for the rights to all four rounds of the British Open golf championships, which beginning in 2010 will result in long-time telecaster ABC being taken off that course. Meanwhile, the bulk of the NBA playoffs air on TNT and ESPN, while TBS presents most of MLB's postseason.

“ESPN bailed out college football,” quipped one sports industry executive, who noted that the sports behemoth's multiplatform push for college football and the BCS could rub up against its growing list of properties. “Everything is becoming self-contained within one family of networks.”

He also took a swing at ESPN's multiplatform emphasis, pointing out that the most of NBC Universal's success with the Beijing Olympics was tied to the Peacock. “Some 90% of the eyeballs came from NBC and 85% of that was in primetime,” the executive said. “That's where they were charging the $400,000 to $500,000 per commercial. Big-time sports still perform best on broadcast.”

Bodenheimer, emphasized that ESPN's multimedia approach is how sports fans tap into athletics today and will increasingly do so in the future. He said the BCS acquisition will enhance a sport that is growing in ratings, attendance and media coverage. He also pointed out that 95% of the viewers who watched last year's BCS title game, in which LSU routed Ohio State, had “cable or satellite hook-ups.”

Both Swofford and Bodenheimer said they anticipated the differential between the U.S. 114 million TV household universe and ESPN's 98 million homes would continue to dissipate in the days before 2011, accelerated by the Feb. 17, 2009, transition from analog to digital TV.

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