USA Steals Eco-Challenge Rights

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New York -- Just one day after Discovery Networks U.S.president Jonathan Rodgers announced high-definition plans for the"Eco-Challenge," USA Network stole his thunder last Wednesday by boasting thatit acquired long-term rights to the adventure-racing program, one of Discovery's topglobal brands.

The behind-the-scenes grappling for the rights and thesubsequent timing of USA's announcement was an interesting race itself.

On Sept. 30, USA closed its deal with Eco-Challenge creatorMark Burnett, who said it's "hugely" more profitable for him to sell thedomestic rights to USA and shop the international rights to individual broadcasters,rather than cutting a global deal with Discovery.

Meanwhile, Discovery had previously scheduled a pressconference with Sony Corp. last Tuesday to announce that the companies would shoot the2000 Eco-Challenge in HDTV format.

Discovery asked Burnett and USA to delay theirannouncement. USA waited until the day after Rogers and Sony executives pitched theirevent, distributing press releases headlined, "USA Network Takes theEco-Challenge."

The timing of USA's announcement was "slightlydisconcerting," Rogers said. "I thought it was unfair to the event. Why theywould want to do it now is beyond me."

Burnett countered that USA "could have rushedout" immediately after signing the deal, but it held back "out of respect forSony and Discovery." Burnett also called Rogers "a totally classy guy,"saying the first phone call he received after USA won the rights was a congratulatory callfrom Rogers.

Burnett was reviewing bids from Discovery and USA untilSept. 30, when he decided to go with the offer from Gordon Beck, USA's senior vicepresident of sports and production.

Discovery's contract gave it international televisionand merchandising rights, and Burnett said the driving factor to go with USA was that hewanted to retain merchandising rights and sell the domestic and international televisionrights separately.

"It really revolved around the foreign rights,"Burnett said. "My whole global business plan really requires that I become veryprevalent on terrestrial broadcasters in these foreign territories."

Discovery was only willing to cut a deal that gave itworldwide television rights, Rodgers said. "We really try to avoid doing a big eventwhere we don't share it with our Discovery partners around the world," heexplained.

Burnett also said he hopes to sell Eco-Challenge formatrights to local production companies in international markets.

USA's deal with Burnett gives it domestic rights tothe event from 2001 to 2003, with options to extend the contract through 2028.

USA Networks Inc.'s Home Shopping Network will sellEco-Challenge merchandise, and sister company USA Broadcasting's owned-and-operatedstations get rights to run Eco-Challenge repeats, Burnett said. That's a twist on thetraditional network-window model.

USA and Burnett wouldn't disclose terms of theagreement. Burnett said production costs for Eco-Challenge on Discovery totaled about $50million during the past four years, and Discovery spent "millions" of dollarsmore on marketing the event.

USA agreed to a marketing commitment that is "equalto, if not greater" than Discovery's, he added.

Discovery has closely tied its brand to Eco-Challenge, butBeck said USA shouldn't have a problem informing viewers that it is now a USA-ownedevent.

"The fact that Eco-Challenge will now be on USANetwork speaks to the strength of Eco-Challenge. I don't think there are going to beany problems building it as a USA property," Beck said. "I don't thinkit's crossed the line of being so closely identified with Discovery that it'snot a strong brand in and of itself."

USA will shoot "Eco-Challenge 2000 -- Sabah,Borneo" in August 2000, and it plans to run the program in primetime during the firsthalf of 2001.

Discovery averaged a 1.53 Nielsen Media Research rating inits universe and 1.2 million households for this year's event -- its best rating everfor Eco-Challenge. "We expect to improve on Discovery's rating, withoutdoubt," Beck said.

Discovery hasn't decided whether to buy another eventto replace Eco-Challenge, Rodgers said. The four Discovery staffers dedicated solely toEco-Challenge may be assigned to other projects after Discovery wraps up its last telecastnext year, he added.

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