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 that
it acquired long-term rights to the adventure-racing program, one of Discovery's top
global brands.

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

On Sept. 30, USA closed its deal with Eco-Challenge creator
Mark Burnett, who said it's "hugely" more profitable for him to sell the
domestic 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 press
conference with Sony Corp. last Tuesday to announce that the companies would shoot the
2000 Eco-Challenge in HDTV format.

Discovery asked Burnett and USA to delay their
announcement. USA waited until the day after Rogers and Sony executives pitched their
event, distributing press releases headlined, "USA Network Takes the
Eco-Challenge."

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

Burnett countered that USA "could have rushed
out" immediately after signing the deal, but it held back "out of respect for
Sony 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 call
from Rogers.

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

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

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

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

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

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

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

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

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

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

"The fact that Eco-Challenge will now be on USA
Network speaks to the strength of Eco-Challenge. I don't think there are going to be
any problems building it as a USA property," Beck said. "I don't think
it's crossed the line of being so closely identified with Discovery that it's
not 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 first
half of 2001.

Discovery averaged a 1.53 Nielsen Media Research rating in
its universe and 1.2 million households for this year's event -- its best rating ever
for Eco-Challenge. "We expect to improve on Discovery's rating, without
doubt," Beck said.

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

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