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John Steinbreder
December 04, 1989
CBS paid $1 billion to keep the NCAA tournament
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December 04, 1989

Baskets Full Of Money

CBS paid $1 billion to keep the NCAA tournament

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The bidding for TV rights to sports has become so intense that event organizers, not the networks, often dictate the terms of agreements. This is certainly true of NCAA executive director Dick Schultz, who not only scored a financial coup in the TV deal but also got his way on other points as well. Schultz extracted a seven-year deal from CBS, which the NCAA says had proposed a four-or six-year contract. He got CBS to agree to televise all those secondary sports championships. And, significantly, he got CBS to more than double its annual rights fee while simultaneously agreeing to reduce the amount of beer advertising during games.

"I'm not sure beer advertising is the right thing to do," Schultz said. Accordingly, CBS next year will be able to run only 60 seconds of beer ads an hour, instead of the currently permissible 90 seconds. In addition, Anheuser-Busch has agreed with the NCAA that most of its ads will be of the know-when-to-say-when variety.

If CBS and the NCAA are the winners in the deal, ESPN, which for years has carried preliminary rounds of the tournament—indeed, built a national TV audience for those rounds where none had previously existed—must be the loser, right?

Yes and no. Other than the Olympics, this is the first major TV sports deal since the 1984 major league baseball agreement to exclude cable. Under the NCAA contract that ends with the basketball tournament in March, ESPN can carry 32 first-round games played over two days. Beginning in 1991, the entire tournament will be on over-the-air TV, and CBS won't sell any early-round games to the cable networks. This is a welcome development for fans. Those without access to cable—about 41% of the nation's TV viewers—will be able to watch such rousing first-round contests as last year's Georgetown-Princeton game. There will be an aesthetic benefit too: Tournament viewers won't have to put up with Dick Vitale any more (the incredible shrinking DV will appear only on regular-season and conference tournament games on ESPN and ABC).

Although ESPN isn't happy about losing the early-round games, the absence of the first two days of the tournament will hardly be a mortal blow. ESPN will still carry some 200 college basketball games a year, including most of the conference tournament finals, and it will be able to fill some program holes with spring training games in 1990 ( ESPN will share regular-season major league baseball with CBS beginning next year). The tournament blackout of ESPN should not be considered ominous for cable TV as a whole. The three major networks should keep getting the big sports properties, and with prices as high as they are, CBS, NBC and ABC will need to sell off some rights to cable.

Contract talks for the rights to CFA College Football and the NFL will be held in the next few months, and negotiators for those sports can't wait for the meetings to begin. Neither can CBS. Though it has already spent a fortune, the network remains very much a player in this strange new game.

[This article contains a table. Please see hardcopy of magazine or PDF.]

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