CBS pays $6 billion for more `Madness'

Network retains NCAAs in 11-year deal

November 19, 1999|By Milton Kent | Milton Kent,SUN SPORTS MEDIA CRITIC

In the latest in a series of stunning television rights negotiations, CBS yesterday agreed to an extension of the network's contract to carry the men's college basketball tournament that will pay the NCAA $6 billion over 11 years.

The whopping contract will pay the NCAA more than $545 million annually, more than doubling CBS' current $247 million annual fee.

CBS, which has held exclusive over-the-air rights to the tournament since 1982, beat back bids from Fox and Disney's ABC and ESPN to retain one of sports television's most valuable properties.

"For us, the Final Four may be the greatest sporting event of the year," said Leslie Moonves, president and chief operating officer of CBS.

The sweeping agreement gives CBS exclusive rights to virtually all forms of communications regarding the tournament, including radio, cable television, satellite and digital telecasts, publishing and the Internet.

The network will handle the tournament's marketing and develop the NCAA's Web site as a year-round site. In addition, CBS will produce and air two one-hour specials to highlight NCAA championships, as well as an annual NCAA special and nightly NCAA shows from March 1 through the end of the tournament.

In a surprising development, CBS, which recently entered into a merger agreement with media giant Viacom, owner of Nickelodeon and Showtime, said the tournament will remain on over-the-air television for the foreseeable future.

"We didn't pay this kind of money to farm it out to cable," said Moonves.

Sean McManus, CBS Sports president, said viewer complaints about an inability to see all tournament games have largely evaporated since the network made its signal available via direct broadcast satellite, thus making the need for a cable partner moot.

The new deal begins once CBS' current seven-year, $1.73 billion contract with the NCAA expires in 2002. The NCAA, which receives 85 percent of its revenue from tournament television money, can reopen the contract after eight years.

"I will advocate that we return as much money as we can to member institutions to help student-athletes," said Cedric Dempsey, NCAA executive director.

Though the tournament's ratings have fallen in recent years -- including last season's Connecticut-Duke championship game -- the three-week period of "March Madness" gives CBS the second-biggest platform to reach the desired male demographic in the first quarter of the year, following the Super Bowl.

McManus said the pending CBS-Viacom merger, which effectively gives the company the same kind of broad expanse as Fox and Disney, was a help in the negotiations.

"It would have been more difficult to convince the NCAA that we had the ability to take care of all of it [the tournament]," said McManus. "It [the merger] made us a much more attractive participant."

Yesterday's extension means that the major American networks have committed themselves to about $30 billion in rights fees to major sports organizations.

The deal follows last week's NASCAR announcement in which NBC, Turner Sports and Fox will pay the stock car organization $3 billion over an eight-year period starting in 2001. CBS, Fox, ABC and ESPN are in the second year of an eight-year, $17.6 billion deal with the NFL, and the NBA is in the second year of a four-year contract with NBC and Turner for $2.6 billion. ABC and ESPN have just begun a five-year, $600 million contract with the NHL.

Major League Baseball's five-year, $1.1 billion contract with Fox and NBC expires after this season, and the value of the next deal may double in light of recent network negotiations with other sports.

"[The NCAA deal] reaffirms my belief in the increasing value of major sports properties," former CBS Sports president Neal Pilson, who runs a consulting firm, told the Associated Press.

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