ESPN Scores $200M Deal for NCAA Games

Cable World, July 9, 2001 by Staci D. Kramer

Deal may heighten concern over rising sports programming costs

A new $200 million pact between NCAA and ESPN will give the sports network an even firmer grip on collegiate sports, including rights to games that CBS tried to steal away.

For approximately $160 million in cash and more than $40 million in promotions, ESPN gets 11 years' worth of 21 NCAA championship events, including all 63 games of the NCAA Women's Basketball Championships and exclusive coverage of the College World Series.

The cash alone works out to roughly $15 million a year, a substantial increase from the current seven-year contract with ESPN that brings in about $2.7 million a year for a total of $19 million. The current contract requires ESPN to air at least 23 women's games.

For operators--already concerned about the rising cost of sports programming--the deal might be more reason for worry. But after a week marked by unprecedented free-agent contracts in professional hockey--one team alone is paying three of its stars nearly as much as the entire league's annual broadcast rights payment--the deal ESPN cut with the NCAA seems like a bargain.

The soft-dollar component includes a major campaign that will push the NCAA across all ESPN platforms and with local affiliate promotions.

"If we were to say to our executive committee we were going to go out and buy this time, we could probably never get that approved," says NCAA spokesman Wally Renfro.

Neither side would discuss details, but the package includes time from November to March on ESPN and ESPN2, in addition to heavy promotion during the hundreds of college games syndicated by ESPN Regional. It's difficult to gauge the actual value, but a 30-second spot on SportsCenter, including morning-after repeats, currently runs $25,000.

The overall deal includes: six additional highlight programs during the women's tournament; bonus sections in ESPN the Magazine; coverage of all NCAA championships on ESPN Classics and rights to a package of games; and highlight packages, live audio and real-time data on ESPN.com.

The NCAA stressed that the overall value of the package is estimated at more than $200 million.

That's the amount CBS told the NCAA the women's events would be worth to them in cash back when the two were negotiating what became the $6 billion agreement for the rights to the NCAA Men's Basketball Championship.

But ESPN's gain may also have been a win for CBS, which suggested the $200 million in cash price tag before the Internet boom went bust, the stock market went down and the advertising market turned soft. Primarily, though, it's a gain for the NCAA, which could use the CBS number as leverage during negotiations with ESPN and still avoid a package that would have spread the women's tournament across CBS, TNN and BET diluting its overall impact.

In the long run, says consultant and former president of CBS Sports Neil Prison, CBS couldn't match the scheduling strength of ESPN. "It was ESPN's commitment to college sports that carried the day," says Pilson. "The women's tournament just re-establishes ESPN as the dominant NCAA network."

Says the NCAA's Renfro, "The relationship was important. I think we were interested in multiple platforms to enhance the exposure of the championships. We wanted long-term stability. We wanted to maximize exposure for the women's championship."

Several parts of the deal require cooperation between the two rights holders. ESPN will get one hour of airtime on CBS every year to promote women's basketball, the rights to air the first round of the men's tournament, the chance to broadcast live from the men's Final Four practice and the right to produce live studio reports from the Final Four when CBS is not on the air. ESPN also gets the two College World Series games currently broadcast on CBS. And, echoing the NCAA theme, the two will work on cross-promotions.

The substantially increased commitment to the NCAA, which includes schedule changes and more prime time, will not affect the network's hunt for other sports rights or its current programming, says John Wildhack, SVP-programming at ESPN.

"The big headline here [is] we're televising all 63 games," he said. "That is a property we think has significant opportunity for growth."