Blog Entry

Where the BCS is headed ...

Posted on: November 7, 2008 4:02 pm
 

This story ran November 3 in the Sports Business Journal. If you are interested at all in the BCS it is must reading.

By JOHN OURAND and MICHAEL SMITH
Staff writers

The BCS entered exclusive negotiations with Fox last week, seeking as much as a 60 percent increase in its rights fee, according to several media and college sources.

That means, based on the BCS’s opening bid, that Fox would have to pay an average of $132 million a year if the network wants to keep the rights to its four BCS bowl games. Negotiations are expected to continue for at least another week to 10 days, sources said. Their current agreement expires in January 2010.

If Fox does not meet the BCS’s final offer, and the BCS is able to find that number on the open market, Fox will not have the right to match, based on a clause in their current deal.

The opening number from the BCS was much higher than industry executives were expecting, especially given the current economy and sluggish advertising market, and well above the $82.5 million annual figure in the current deal.

The first numbers in the negotiations for the next deal were floated Wednesday as BCS officials and Fox executives held a series of closed-door meetings in an Atlanta airport hotel. Those meetings began last Monday, and continued Tuesday primarily to hammer out contractual points for the bidding process and other details, like title sponsorship for the bowls and future dates.

When they convened on Wednesday, negotiations moved toward the financials, which could be spread over four or six years. The BCS originally had wanted a four-year deal so that its next contract would line up with ABC/ESPN’s agreement with the Rose Bowl, which runs through 2014. But both four-year and six-year terms are believed to be in play.

Fox’s exclusive negotiating window is set to expire Friday, but more meetings have been planned beyond that date.

The BCS’s proposed increase comes just two months after the SEC signed $3 billion worth of TV deals with ESPN and CBS, nearly tripling the amount of TV revenue for the conference.

It also comes after the first two BCS championship games on Fox drew strong ratings, with the 2007 game (Florida-Ohio State) pulling a 17.4 rating and the 2008 game (LSU-Ohio State) drawing a 14.4.

Even though the BCS could wind up accepting a bid lower than the six-year, $800 million it sought last week, industry analysts say the steep price suggests that the BCS wants to take its games to the open market, where ABC/ESPN is poised to bid.

If ABC/ESPN eventually acquires the rights, it would own a significant portion of college football, given its extensive regular-season schedule. Some analysts, though, say that keeping Fox in college football, even without a regular-season platform, keeps the space more diverse and competitive.

If the rights go to the open market, ABC/ESPN would become a clear front-runner to outbid Fox and other potential bidders, insiders say, given its dual revenue stream of advertising and affiliate fees from cable and satellite operators.

The question is how many games the BCS would allow ESPN to carry, rather than ABC. ABC/ESPN’s bid would be contingent on moving at least one game to its flagship cable channel, which has 96 million subscribers, though it would prefer to move at least two or three. The BCS likely would push to limit the number of games migrating from ABC to cable.

If ABC/ESPN ultimately wins the bid and moves even one BCS game to ESPN, it would trigger a clause in its Rose Bowl contract that would allow it to immediately take the annual Pasadena, Calif., game from its home of 21 years on ABC to the cable channel. It’s uncertain if ABC/ESPN would move the game, but it would have the right to do so.

But Fox will have its say before negotiations open up. As part of the current contract, the BCS has to give Fox a figure that the BCS would be willing to accept. If Fox does not agree to pay the amount, the rights will go to the open market.

Once on the open market, the BCS will have to get at least its target amount from a rival bidder. If not, the process would start over.

Fox’s exclusive negotiating window is set to expire Friday, but more meetings have been planned beyond that date.

The BCS’s proposed increase comes just two months after the SEC signed $3 billion worth of TV deals with ESPN and CBS, nearly tripling the amount of TV revenue for the conference.

It also comes after the first two BCS championship games on Fox drew strong ratings, with the 2007 game (Florida-Ohio State) pulling a 17.4 rating and the 2008 game (LSU-Ohio State) drawing a 14.4.

Even though the BCS could wind up accepting a bid lower than the six-year, $800 million it sought last week, industry analysts say the steep price suggests that the BCS wants to take its games to the open market, where ABC/ESPN is poised to bid.

If ABC/ESPN eventually acquires the rights, it would own a significant portion of college football, given its extensive regular-season schedule. Some analysts, though, say that keeping Fox in college football, even without a regular-season platform, keeps the space more diverse and competitive.

If the rights go to the open market, ABC/ESPN would become a clear front-runner to outbid Fox and other potential bidders, insiders say, given its dual revenue stream of advertising and affiliate fees from cable and satellite operators.

The question is how many games the BCS would allow ESPN to carry, rather than ABC. ABC/ESPN’s bid would be contingent on moving at least one game to its flagship cable channel, which has 96 million subscribers, though it would prefer to move at least two or three. The BCS likely would push to limit the number of games migrating from ABC to cable.

If ABC/ESPN ultimately wins the bid and moves even one BCS game to ESPN, it would trigger a clause in its Rose Bowl contract that would allow it to immediately take the annual Pasadena, Calif., game from its home of 21 years on ABC to the cable channel. It’s uncertain if ABC/ESPN would move the game, but it would have the right to do so.

But Fox will have its say before negotiations open up. As part of the current contract, the BCS has to give Fox a figure that the BCS would be willing to accept. If Fox does not agree to pay the amount, the rights will go to the open market.

Once on the open market, the BCS will have to get at least its target amount from a rival bidder. If not, the process would start over.

Category: NCAAF
Comments

Since: Sep 9, 2007
Posted on: November 9, 2008 10:55 pm
 

Where the BCS is headed ...

PLAYOFF!  Top 16 teams, 4 weeks, more money than the BCS  ever dreamed off.  Really, it is easy.  Call me for all the details.  I will only take 1% off the top and 100% of the blame if it doesn't work.  Call me @ 867-5309.....



Since: Apr 3, 2007
Posted on: November 9, 2008 8:45 am
 

Where the BCS is headed ...

If it is headed toward its death it will probably be a slow painful death that every college football fan will suffer through.I never thought of that.  Just goes to show that the BCS is possibly the biggest travesty in sports since the Black Sox.



Since: Mar 8, 2007
Posted on: November 9, 2008 4:35 am
 

Where the BCS is headed ...

As usual all about the money but everyone is used to that by now.  If it is headed toward its death it will probably be a slow painful death that every college football fan will suffer through.



Since: Apr 3, 2007
Posted on: November 8, 2008 3:13 pm
 

Where the BCS is headed ...

Hopefully to it's death....



Since: Jan 9, 2007
Posted on: November 8, 2008 12:37 pm
 

Where the BCS is headed ...

Agreed.  When ABC/ESPN decided to let the old BCS deal expire, I was like, "great, this is exactly what we needed to force a playoff system.  Now hopefully no one else is dumb enough to pony up the jack."  Well, unfortunately my enthusiasm was curbed a couple days later when FOX stepped up.  Hopefully this time around, the BCS will have priced itself right out of exsistance.  That would be epic.  Do the right thing, FOX.  DO NOT RENEW!!!



Since: Aug 8, 2007
Posted on: November 8, 2008 11:23 am
 

Where the BCS is headed ...

This is just the example that the BC$ supporters needed to see...it's not about football, it's about the money. There should be a play-off system that includes all conference affiliated teams. That means that teams have to be a part of a conference. That means you too ND. Non-Power6, non-BC$ as you call them, should be included because the road to the BC$ bowls is only inclusive to, at most, 2 non-Power6 teams ranked in the top 12 in the nation. College football powers-that-be, stop selling out and make it fair to all of college football. Not just the money-hungry...


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