March Madness: A Retrans Slam Dunk

Carriage cash helps pay for broadcast sports rights

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
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.