News

CBS, Turner to Share ‘Madness’

4/26/2010 12:01 AM Eastern

CBS Sports and News president
Sean McManus admits to being “a strong
advocate of Duke basketball.”

David Levy, president of Turner Sports and
advertising sales, went to Syracuse University,
which lost to Butler, the runner-up to the
2010 men’s Division I basketball champion
Blue Devils.

“Duke-Syracuse would make for a very
interesting final for the new brotherhood of
CBS and Turner,” McManus said last week.
That it would.

The CBS-Turner basketball brotherhood
was formed when they outbid ESPN for a 14-
year, $10.8 billion rights deal with the NCAA
for the men’s college tournament, tipping off
with next year’s March Madness.

The contract, superseding CBS’s last 11-year,
$6 billion contract, will put the Final Four and
national title games on cable for the first time.

MORE GAMES, AND FEES
It also is likely to mean an increase in affiliate
fees for Turner properties down the road.

TBS, TNT and TruTV will join the broadcast
network in presenting all of the men’s games in
an expanded 68-team field, up from 65.

Games in the crowded first and second
rounds will all get national exposure, a
first for the 73-year-old tournament and an
expected boost to ad revenue.

Through 2015, CBS has the regional finals,
the Final Four and the national championship
game.

Starting in 2016, the regional finals will be
split by CBS and Turner, and the Final Four
and the title tilt will alternate yearly between
CBS and Turner’s TBS.

For TBS, this is the second big acquisition
from broadcast in two weeks. The first
was Conan O’Brien signing on for a Monday
through Thursday late-night show at 11 p.m.,
starting in November.

Over the term of the contract, almost twothirds
of the games will air on Turner’s outlets.
Digital, mobile and marketing rights are
also included.

This continues a migration of marquee
sports properties to cable networks from
broadcast. Turner now has much of Major
League’s Baseball’s postseason, and ESPN
has college football’s Bowl Championship
Series. Cable-network groups can pay more
because they have revenue coming in from
subscribers as well as advertisers.

As for the impact on cable subscribers, Levy
said, “At some point, we’re going to come to
our affiliates and ask for an increase, reflective
of the value of the NCAA tournament.”

Turner in the past sought a surcharge after
obtaining National Basketball Association
and National Football League games.

SNL Kagan pegs TNT, TBS and TruTV
monthly license fees at $1, 50 cents and 10
cents per subscriber, respectively.

While the mix of games has not yet been determined,
Levy called the addition of March
Madness contests a natural for TruTV.

“It’s a top-10, male-skewing network,
growing with a younger audience,” he said of
the former Court TV. “Sports programming
is a logical extension.”

Levy said it was “too early to talk about”
Turner potentially obtaining other collegebasketball
properties to help round out the
schedule and upsell tournament advertising.
TBS added regular-season Major League
Baseball games after gaining MLB Division
and Championship Series rights.

Any possible increase in college-basketball
coverage would be based on the same
four criteria used to gauge any acquisition:
advances in audience, ratings, advertising
and distribution, Levy said.

He said the NCAA deal, in which the parties
will share expenses, revenues, production
and promotion, will be “meaningfully profitable”
for Turner and parent Time Warner.

CBS’s McManus said the partnership with
Turner “puts us on solid footing for lasting
profitability.”

Asked whether rising fees had resulted in
CBS losing money on the tournament in 2010,
he said only that it “would have been very challenging
under the last three years of the deal.”

Published reports put the last NCAA pact’s
fees at $657 million in 2011, $710 million in 2012
and $764 million in 2013. Similar rights are
slated for the first three years of the new deal.

ESPN MADE ‘AGGRESSIVE’ BID
ESPN, which included ESPN2, ESPNU and
ABC in its proposal, said: “We made an aggressive
bid and believe our combination
of TV distribution, digital capabilities, season-
long coverage and year-round marketing
would have served the interests of the
NCAA and college fans very well.”

ESPN airs more than 1,200 men’s and
women’s college basketball games per year.

Meanwhile, its existing deal with the NCAA
covers 22 other collegiate championships, including
the women’s basketball and softball
tournaments and the College World Series.

“We expect to continue to show those
events over the next three years — and hopefully
beyond,” an ESPN spokesman said.

McManus said CBS had not been approached
by the NCAA about those properties, but that
CBS and its 38 million-subscriber CBS College
Sports Network would certainly be interested in
some or all.

September