BCS deal new form of TV remote control
Nov 19, 2008
Slowly but surely we are being driven into a box. A converter box.
The news that the Bowl Championship Series has signed a deal with ESPN to televise the Fiesta, Orange and Sugar bowls, as well as the BCS championship game, marks a milestone in a march to transform viewers of major sporting events very literally into a captive audience. The Disney-owned cable network reportedly will pay a half-billion dollars from 2011 through 2014 for the four postseason games, $42.5 million annually more than the current BCS contract with Fox, which makes telecasts available over the air.
In recent years playoffs in the NBA, NHL, and Major League baseball have moved to cable, as have the British Open and Monday Night football. Oh, and did we mention that Disney/ESPN/ABC already owns the broadcast rights to the Rose Bowl? “At ESPN, we’re 100 percent committed to sports,” said George Bodenheimer, president of ESPN, Inc. and ABC Sports, in announcing the BCS deal. And the more ESPN commits, the more viewers are committed, too.
The bowl championship contract, negotiated by ACC commissioner John Swofford, this year’s BCS coordinator, locks in the status quo. Despite the protestations of president-elect Barack Obama and similarly misguided BCS critics, there will be no formalized eight-team format or any other tournament-like playoff in college football for at least another half-decade.
Swofford said the TV deal was the inevitable, if indirect, consequence of “lengthy discussions” this past spring involving leagues, athletic directors, university presidents, and BCS representatives in which a “plus-one” formula was rejected in favor of the current arrangement of polls, power ratings, and bowls. “There simply wasn’t enough support at that time to make any substantial change,” Swofford said.
The BCS deal also drives more viewers to cable, and particularly to the happy family of ESPN products – ESPN, espn2, ESPN Classic, ESPNews, ESPNU, even ESPN 360. Currently Fox reaches virtually all 114 million American households. ESPN reaches 98 million.
Swofford evinced little worry about the differing fates of over-air and pay-per-view fans. “I think that number with continue to be minimal,” he said. But even as such gaps shrink, moving to ESPN inevitably leaves out the country dweller shunned by cable companies as too expensive to connect; the satellite seeker who lives in the woods; the family that simply can’t afford the luxury of an additional monthly charge for the privilege of watching TV.
Locking up major sporting properties is smart business for ESPN. The company spawned the growth of espn2 in part by sticking premier ACC basketball games on that fledgling network. (Sure, commentators also wore more casual garb on “The Deuce,” but such manufactured Stuart Scott-like hipness was a minor factor.) “The U,” as in ESPNU-nseen, is presently carried by far fewer cable and satellite packages than its more established cohorts. Placement of higher-profile product on that channel will drive its numbers upward, too.
ESPN already charges cable operators a subscription fee of at least $3 per month, more than any other cablecaster. Soon, the sports purveyor could move to the level of premium movie channels. “ESPN can drive prices up so there’s no way broadcasters can compete,” one TV analyst told USA Today regarding rights fees. “There’s no limit what they could charge – maybe $8 to $10 per month someday.”
The growth of cable, plus the erosive quality of repeated experience, has resulted in little protest regarding the drift toward ESPN dominance seen in the BCS deal. That makes it likely the ACC will take a similar route.
Once, an ACC attempt to narrow viewer options was the source of outrage and lawsuits.
Back in 1984, when cable was just gaining traction and Michael Jordan was a college junior, the conference and TV partner Raycom floated an early pay-per-view scheme called “Season Ticket.” Teaming with ESPN, the league and its TV syndicator attempted a regional blackout of 21 men’s basketball games that were televised nationally, forcing ACC fans to pay extra to have the signals unscrambled. The charge was $50-$75 for the package; some cable operators also required purchase of a decoding device.
Public reaction was something short of enthusiastic, and the idea was soon dropped. "This has been a marketing failure and a public-relations fiasco," said Dick Schultz, then Virginia’s athletic director.
Much was learned from such false starts. Other conferences also took heed of the troubles experienced by the Big Ten, which launched its own 24-hour sports cable network to enhance TV revenues in late-summer 2007. This past summer, rather than worry about growing its own, the Southeastern Conference went a different route, signing a 15-year deal with ESPN to televise football, basketball and other sports for a reportedly $2.25 billion.
Add a 15-year contract with CBS, and the SEC’s swag comes to about $3 billion. No need for your own network when you’re promised enough money to finance a small Wall Street bailout.
By comparison, ESPN got a steal in 2007 by locking in all Big 12 sports for eight years at a mere $500 million. Then there was the 2004 ACC football deal with ESPN/ABC for a reported $260 million over seven years, which doubled the league’s previous TV revenues.
Basketball, the ACC’s signature sport, is said to generate $35 million annually through contracts signed late in 1999. Those arrangements expire following the 2010-11 season. Meanwhile Swofford and the ACC know the intricacies of the far more lucrative SEC deal, which ESPN shared voluntarily.
All of this activity occurs against the backdrop of a seriously sputtering national economy in which giant, established corporations like General Motors not only struggle to survive, but vastly curtail their TV advertising. ESPN’s aggressive approach to cornering rights fees may lead not only to higher cable costs, but to greater dependence by college sports on the fortunes of a single company in a stormy economic sea.
And here you thought sitting at home and watching your favorite team was as simple as clicking on the television set. Digitally-enabled, of course.
