CBS/Turner extend NCAA tourney deal

[Marcus92]

http://fortune.com/2016/04/12/ncaa-cbs-ncaa-tournament/

The current deal totals $10.8 billion for 14 years through 2024. With the extension, it will run through 2032 and is worth an additional $8.8 billion.

[Herman Cain]

This is a positive. So much for the sports bubble imploding

[MarquetteDano]

This is a positive. So much for the sports bubble imploding

And more importantly, the power conferences breaking off for bball.

[GoldenWarrior11]

And more importantly, the power conferences breaking off for bball.

This is a very important notion that got overlooked as the huge realignment wave struck the NCAA from 2010-2013.  Aside from the obvious football ramifications that the Power 5 created with their poaching of the Big East and Big 12, the genuine fear that was created was that it would translate into basketball as well - and pushing out the non-power conference teams from the NCAA Tournament.

At the end of the day, the NCAA Tournament is rooted in the underdog upsetting the big-name schools.  There was too much money involved for the power conferences to kick everyone out, and I'm glad that Marquette and the Big East are firmly secured for a long, long time.

[MU86NC]

Amen Bro!!!

[MU82]

This is a positive. So much for the sports bubble imploding

But Heisy, a.k.a. Clickbait, said the bubble was about to blow. And he knows everything about everything!

[The Lens]

But Heisy, a.k.a. Clickbait, said the bubble was about to blow. And he knows everything about everything!

Well the NCAA did give Turner / CBS rights to every medium through 2032, even those not invented yet.  Imagine signing a radio deal in early 1900s that also included TV. 

[ChicosBailBonds]

CBS, Turner Extend NCAA Tournament Deal For Another Eight Years Through '32

By Michael Smith & John Ourand

Published April 13, 2016

Villanova and North Carolina's Championship game on Turner pulled a 10.6 rating
CBS and Turner Sports have extended their joint deal with the NCAA another eight years to '32 for the men's basketball tournament. The additional eight years are being valued at $8.8B total, or $1.1B per year. That marks a big leap from the $771.4M average annual rights fee in the original 14-year contract, which was signed in '10 and runs through '24. The NCAA's rights include TV, digital and marketing/sponsorship for the tournament. Turner and CBS will maintain the same shared financial and programming structure as they have had for the first six years of the deal. "The NCAA tournament has exceeded all of our expectations on every metric," Turner President David Levy said. "We're way ahead of where we thought we'd be six years ago and that's why we wanted to get this done." Talks to extend the deal began in October when CBS/Turner and the NCAA opened up negotiations as part of a contractual look-in. SportsBusiness Journal reported in December that talks had centered on an extension to '32. Those negotiations were finalized in Houston at the Final Four earlier this month and signed shortly thereafter, despite historically low TV ratings for the three games, which were telecast on Turner. It marked the first time the championship game had been on cable TV. The dramatic April 4 final between Villanova and North Carolina on Turner pulled a 10.6 rating, or 17.75 million viewers, across TBS, TNT and truTV, down 34% from last year's 16.0 rating for Duke-Wisconsin on CBS. But Turner, which manages the digital rights through March Madness Live, remains bullish on the growth of its digital and overall audience. MML generated a record 18.1 million hours of live viewing for this year's tournament across more than 10 digital platforms.

TOURNAMENT TO REMAIN PROFITABLE: Despite the low TV ratings, both Levy and CBS Sports Chair Sean McManus said this year's tournament generated the most revenue during the time they have shared the NCAA's rights, and that it was profitable. The terms of the extension are intended to keep it profitable. "We weren't going to do a deal unless it was financially responsible and profitable. This is," McManus said. Levy added: "It certainly is profitable." The growth in rights fees marks an important step for the NCAA. Such a long-term deal represents financial predictability and growth for the college game's governing body. The current deal provides the NCAA with substantial annual increases, from $740M this year to $761M in '17, $782M in '18, $804M in '19 and $827M in '20. But those increases flatten over the final few years of the original contract, NCAA President Mark Emmert said. Some of the money from the extension will be used to beef up the numbers near the end of the current deal. "We needed to address that, and the extension does," Emmert said. "That financial security and predictability is very important to the membership. ... It's obviously critical that we get it right [in the extension]. We have 90 championships, but only one -- basketball -- generates virtually all of the revenue that comes into the association and goes back out to the schools." Emmert said the NCAA has been pleased with the way Turner and CBS have jointly presented the tournament and the desire to extend overrode any considerations to let the contract play out and go back to the marketplace in eight years. Turner pays close to 70% of the rights fee. "For our three organizations to come together the way we do on the tournament, it's maybe unprecedented," Emmert said. "We felt very comfortable continuing with such a unique partnership."

IMPORTANT PROPERTY TO HOLD ONTO: Given the changing media landscape, Turner and CBS wanted to make sure they had a long-term grip on the NCAA's rights, no matter what the future might hold. "There are very few premier sports properties out there that can produce the kind of value the NCAA tournament delivers to our distributors, our advertisers and our consumers," Levy said. "This event captivates the nation for three weeks unlike anything else in sports. When you have the opportunity to re-up a contract like this -- the linear TV, the marks, the rights -- and distribute on many different platforms, these things make us very comfortable to know this event is something you want in your portfolio, no matter where the TV ecosystem goes." Both sides said that CBS will have all three games for the Final Four in '17, while Turner will have the Final Four in '18. They will continue to alternate through the contract. Emmert credited NCAA Exec VP/Championships & Alliances Mark Lewis and VP/Men's Basketball Championships Dan Gavitt for directing much of the negotiations.

[mu03eng]

But Heisy, a.k.a. Clickbait, said the bubble was about to blow. And he knows everything about everything!

Lord help me, I don't want to look like I'm defending Clickbait, but this deal actually reinforces the concept that there could be a sports bubble. The NCAA wanted to lock in an extension now so they could "guarantee" their revenue stream for the next 10-15 years regardless of what happens to the valuation of live sports content. Basically, they looked at the landscape and said "our current revenue model is good enough and there is more risk it will go down in value in the future than reward that it will go up in the future". If there was less risk, the NCAA would have at least made it look like they were willing to let the contract hit the open market in 5 years for a bidding war.

Turner/CBS are locking in now because they don't want to risk the possibility that live content valuations go up because they think the risk of them going down is smaller so it isn't like this is definitive proof that there is a bubble.....but it could be construed that way.

[Marcus92]

No asset in the world continues to appreciate in value forever just because it's in short supply. Housing was an unbeatable market — until it wasn't.

Live sports (especially big events like the NCAA tournament) are probably still a good long-term bet. Between alumni, their families and local/state pride, college sports have a built-in audience (10+ million viewers). That's not likely to change any time soon. Being able to deliver numbers like those, without having to worry about DVR commercial-skippers, makes for a very attractive advertising package.

But there's always a limit. And nothing is ever 100% for certain.

[naginiF]

Lord help me, I don't want to look like I'm defending Clickbait, but this deal actually reinforces the concept that there could be a sports bubble. The NCAA wanted to lock in an extension now so they could "guarantee" their revenue stream for the next 10-15 years regardless of what happens to the valuation of live sports content. Basically, they looked at the landscape and said "our current revenue model is good enough and there is more risk it will go down in value in the future than reward that it will go up in the futurefans don't even care enough anymore to do Meme Tournaments.  Interest is waning, better lock it in now". If there was less risk, the NCAA would have at least made it look like they were willing to let the contract hit the open market in 5 years for a bidding war.

Turner/CBS are locking in now because they don't want to risk the possibility that live content valuations go up because they think the risk of them going down is smaller so it isn't like this is definitive proof that there is a bubble.....but it could be construed that way.

FIFY

[mu03eng]

FIFY

[TAMU, Knower of Ball]

FIFY

[ZiggysFryBoy]

What will Barkley be rambling about in 2032?