March Madness: A Retrans Slam Dunk

Carriage cash helps pay for broadcast sports rights

By John Eggerton -- Broadcasting & Cable, 5/3/2010 12:01:00 AM

STARTING IN 2016, NCAA men’s basketball tournament games will be moving to cable, at least every other year, alternating between CBS and Turner. There was a time when that news would have been treated in Washington with the sort of full-bore response reserved for threats to Mom and apple pie.

Way back in the 1990s, the issue of sports siphoning—what is now referred to more matter-of-factly as the migration of sports to cable—was for many an incendiary topic, the subject of Hill hearings and red meat for legislators protecting the sanctity of their baseball and football games. Sports can still generate some heat in retrans battles and program access fights, but rights deals that have seen former broadcast staples move to multichannel video providers no longer generate many headlines.

In fact, CBS and Turner’s deal may be a plus for over-the-air coverage. The alternative could easily have been March Madness going lock, stock and slam-dunk to cable.

College football’s BCS championship game and the PGA’s prestigious British Open golf tournament are headed to cable; the NBA All-Star Game moved there years ago, and Monday Night Football shifted to ESPN with less noise than a Hank Williams Jr. song.

Broadcasters say that one of the reasons CBS—and free WashingtonWatch TV in general—got to keep a piece of the Madness was the retrans revenues CBS stations expect to collect over the 14-year life of the contract. It will be something of a Catch-22 situation, though, with CBS able to pay for its share of the $10.8 billion tab thanks in part to retrans fees, and able to get those fee boosts in part by airing must-have programming like the NCAA basketball tournament.

The FCC is considering changes to the retrans system, but as Commissioner Robert McDowell pointed out to reporters recently, asking for more money for TV signals is not unfair bargaining. Televised sports are important—as the FCC has made clear in program access proceedings—but they are not a utility.

A source close to the CBS/NCAA deal says there remain “a thousand details” to work out. One of those could be a home-market deal for the championship game, or maybe even the Final Four. That would allow local stations in the home markets of the respective college teams to carry the game to broadcast viewers, and keep powerful alumni from complaining to their legislators.

Warm-button issue
But with multichannel video penetration pushing 85%, the number of viewers affected by such a move dwindles, and it becomes more of a warm-button issue than a hot one. Also, with the move five years away, there’s plenty of time for the reality of North Carolina viewers without access to a Duke championship game to sink in.

It would be a wise move for CBS to arrange such a homemarket deal for over-the-air broadcasts in the hometown markets of the schools involved in the Final Four. That would leave only 999 details to hammer out.