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CBS
Keeps March Madness By George Stahl NEW YORK (AQB)--CBS scored a slam dunk Thursday, securing exclusive television and complete coverage rights to the NCAA basketball tournament and other championship events until 2014. The 11-year contract - for a minimum of $6 billion - begins in 2003, when CBS' current eight-year contract ends. CBS, which has televised the NCAA men's basketball championship since 1982, acquired all television and radio rights to the tournament, including over-the-air broadcasting, cable television, satellite, digital and home video. Despite getting the cable rights, CBS said it has no plans to move the men's tournament games off of network television. "We didn't pay this kind of money to farm it out," said Leslie Moonves, president and chief executive officer of CBS Television. "For us, the Final Four may be the greatest sporting event of the year." CBS Sports President Sean McManus also didn't see any change in CBS' coverage. "Right now, for the forseeable future, our plan is to keep the NCAA basketball championship on free, over-the-air network television. "As the television universe evolves and changes, we will look at different options. We own the cable rights, should we decide in conjunction with the NCAA to exploit those rights. Right now, there's no plan to change the way we present the tournament." According to the agreement, CBS acquired the rights for all content relating to these events on the Internet, including rights to related electronic commerce and rights to develop various NCAA-related Web sites. Also, CBS received rights to marketing and corporate sponsorship; merchandising, licensing, publishing and printing; and archival rights. "This is the first sports deal in history to extend beyond our traditional platforms into the world of new media," Moonves said Thursday night. CBS will provide year-round promotion of the NCAA and its championships, including development of NCAA.com as a year-round Internet site; two one-hour specials annually to highlight all NCAA championships; and an annual NCAA special. Other new items in this contract include a monthly NCAA show on issues in intercollegiate athletics and highlighting the men's and women's champions in all sports; a commitment to regular-season college basketball programming; and a nightly show featuring Division I men's basketball from March 1 through the conclusion of the championship game. "I can't tell you how excited we are in using all these platforms to make this event even bigger and better in the future," McManus said. The network will be the exclusive rights-holder for all championship television and marketing rights, except those currently owned by ESPN and TWI. ABC has a $525 million, seven-year deal to show the four Bowl Championship Series games. Interestingly, CBS' deal follows an NCAA tournament that produced the lowest-rated championship game (17.2) and tournament (6.8) during CBS' tenure. Overall, ratings are down 28 percent this decade, a bigger drop than the Super Bowl, World Series or NBA Finals. The agreement averages to about $545 million per year, which is nearly double the average of the NCAA's current contracts for television and marketing rights (about $237 million per year) and higher than the reported expectations for the new contract (about $400 million per year). Annual payments to the NCAA under the new contract will start at about $360 million, a 20 percent increase over the final year of the existing contract. "Obviously, we are not a nonprofit organization," Moonves said. "We are investing a great deal of money in this, but we feel we're in a brave, new world now. The Internet [and] all the different opportunities afford us great opportunities to provide additional sources of revenue. We're entering into this agreement fully expecting to make a profit at the end of the term of this agreement." The agreement also contains financial-incentive opportunities for the NCAA and an option for the NCAA to renegotiate after eight years. CBS' pact comes a week after the network lost its NASCAR rights, beginning in 2001, to Fox, NBC and Turner. Those three networks will pay a total of $2.4 billion for a six-year NASCAR contract. "NASCAR was important to us," McManus said. "Quite frankly, we don't place the NASCAR package in the same category whatsoever as the NCAA men's basketball championship. "We made an evaluation of what NASCAR was worth. Two other networks [Fox and NBC] thought it was worth a lot more money than we did, which is fine, and they got the rights. Apparantly, we thought the NCAA championship was worth more than other people and we got the rights for this event. "We based our bid not on what we thought Fox or ABC was going to bid. We based our bid on the value that we placed on this great event. And if we placed more value on that event financially, so be it. That's how negotiations go. If we had placed more value on NASCAR, we would have gotten the NASCAR rights also, but we didn't place as much value on it. McManus said CBS considers the tournament extremely valuable. "There is no more important event at CBS - not just CBS Sports but the CBS corporation - than the men's basketball championship," he said. "I will tell you that corporately, there has been no higher priority during the past year than renewing this relationship." NCAA's agreement with CBS is yet another defeat for Disney-owned ABC and ESPN, losers also in the NASCAR race last week. The news could get worse for ESPN, which is in a legal fight with Major League Baseball to keep that contract. The two sides are scheduled to go to court on Dec. 6. Disney, which will air nearly 300 college basketball games this year, made formal presentations to NCAA officials this week, as did CBS and Fox. "We did not know what they [the competitors] were doing. But judging from the past history of Fox, they generally go pretty high," Moonves said. "So we knew they would put in a substantial offer as would some of the other competitors. We basically had a game plan to come in at a certain level, where we could go and we felt comfortable going. And we sort of were around that level." McManus said CBS' bid was fair to both sides. "We made what we consider a very reasonable bid, a fair bid, that allows us hopefully to make a profit and enables the NCAA to take the next step financially." Back
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