March Madness Will Hit DBS, Not Cable

Author:
Publish date:
Updated on

Cable operators will once again be excluded from
distributing a major out-of-market sports package, as DirecTv Inc. announced an exclusive
agreement last Tuesday with the National Collegiate Athletic Association to offer men's
college-basketball tournament games via pay-per-view.

While terms of the one-year deal were not disclosed, the
direct-broadcast satellite service will distribute about 34 games from the first three
rounds of the tournament. DirecTv subscribers will be able to purchase all of the games
that are not broadcast by their local CBS affiliate. DirecTv, CBS and the NCAA will share
in the revenues generated from the package.

"As we look at the field of sports, the NCAA
tournament is one of the most coveted and highly anticipated sports events," said
Eddy Hartenstein, president of DirecTv. "With this deal, we feel that we're changing
the way that fans can enjoy the NCAA on TV."

Sean McManus, president of CBS Sports, and C.M. Newton,
chairman of the NCAA Division I Men's Basketball Committee, said DirecTv's 4.1
million-subscriber universe was small enough to provide fans with the ability to watch
additional games without compromising the product or hurting CBS' ratings. Both also
confirmed that they never thought about a cable vehicle for "March Madness."

"Doing a cable package was never considered ... it
would have damaged the product," McManus said. "If DirecTv were in 70 million
households, [like cable], we would not have done the deal."

"We have an awful good deal going with the
tournament," Newton added. "This is a conservative approach, but a good one for
those fans that are displaced."

The deal represented another blow to cable's efforts to
effectively compete with DirecTv for sports fans. Along with the NCAA package, operators
are excluded from carrying DBS-targeted packages from the National Football League, Major
League Baseball and the National Hockey League.

The National Basketball Association offered its
out-of-market package to a number of cable operators this year, but no deals have been
signed.

While operators can distribute regular-season
college-basketball games via ESPN's "ESPN Full Court" PPV package, the NCAA
tournament is arguably much more attractive to viewers. Operators, however, can distribute
out-of-market women's NCAA tournament games through the Full Court package.

"It's indeed unfortunate that the majority of sports
fans in this country will not be able to see the NCAA tournament games," said Ted
Hodgins, director of PPV for Media General Cable of Fairfax County, Va., one of the few
cable systems offering ESPN Full Court.

DirecTv has yet to determine the price of the package, or
whether it will offer any games on an individual PPV basis. The DBS service said it will
announce pricing and packaging plans in the first quarter of 1999, but it will probably
include the NCAA package in its holiday-season marketing plans.

"They can now promote this through their Christmas
selling season and make it part of their overall sports message," said Steve Blum,
president of Tellus Ventures Associates, a DBS-consulting firm. "It will help DirecTv
to create an image of having all of the sports to offer to consumers."

In other DirecTv-related news, the service announced that
it will distribute Ivy League college-basketball games as part of its "basic"
programming packages, said Rob Jacobson, vice president of East Coast programming for
DirecTv.

The "Ivy League Friday Nights"package,
which runs from Jan. 8 through March 2, represents the first time that Ivy League games
have been offered nationally, DirecTv said.

Related