In the midst of this year's successfulcollege-basketball tournament, CBS Sports and the NCAA are exploring the possibility ofoffering "March Madness" games on a pay-per-view or subscription basis -- butit's not clear whether distribution to cable operators is part of the game plan.
Mike Aresco, vice president of programming for CBS Sports,said last week that the network has "quietly explored" the possibility ofoffering out-of-market NCAA Tournament games, but he added that there are no plans to doanything at this point.
Sources close to the situation, however, said the networkhas had "serious" discussions with ESPN about offering a package of tournamentgames as early as next year. ESPN currently distributes regular-season out-of-marketcollege-basketball games to both cable operators and direct-to-home satellite servicessuch as DirecTv Inc.
Representatives from ESPN could not be reached for commentat press time.
It remains unclear whether the package would be offered tocable operators, or whether it would go exclusively to direct-broadcast-satelliteservices, over which out-of-market packages for professional-sports leagues are currentlydistributed.
All four of the professional-sports leagues -- fearingcannibalization of local-broadcast ratings and wary of cable's lack of channel space-- have refused to offer their out-of-market games to operators. The move has given DBSservices a distinct promotional advantage over cable, which it has used to convert sportsfans from cable to DBS -- although sources close to the matter said DBS companies have yetto turn a profit on the packages.
Outside of the National Football League package -- whichgenerates around a 10 percent buy-rate -- out of-market games from the National BasketballAssociation, the National Hockey League and Major League Baseball have failed to generateimpressive buy-rates, according to industry observers.
But Steve Blum, president of Tellus Venture Associates, aDBS-consulting firm, said an NCAA package would almost have to be offered to cable to besuccessful. With only a four-day window between the selection of the 64-team field and thetournament's tip-off, it would be difficult for DBS to sell the package as anacquisition tool, like it does for the professional-sports packages.
"You don't know until a couple of days beforewhat teams will be competing, so at best, you would have a two- to three-week period tosell the service," Blum said. "So I don't think an exclusive deal isbeneficial to DBS."
The only hurdle for cable would be channel capacity. With aprimary focus on the first three rounds of the tournament -- CBS televises each game liveonce the tournament gets to the final eight teams -- cable would have to clear at leastfour channels to offer all first- round and second-round games. Operators would only haveto offer two channels once the field is pared down to 16 teams.
But an out-of-market package for the popular tournamentcould prove to be very lucrative, Blum said. CBS is enjoying its best tournament ratingssince 1994, averaging a 6.2 Nielsen Media Research rating.
With the uncertain outcome of most tournament games --coupled with high interest in the games from displaced college alumni around the country-- Blum said such a package could approach the 10 percent buy-rate figure often associatedwith DirecTv's popular NFL out-of-market package.
"While it doesn't have the following that the'NFL Sunday Ticket' package has, it probably reaches beyond the core sportsaudience enough that a 10 percent buy-rate is doable," Blum said.
Some operators are already excited about the prospect. TedHodgins, manager of PPV for Media General Cable of Fairfax County, Va. -- one of the fewsystems that distributes ESPN's regular-season college-basketball package -- saidNCAA Tournament games would certainly enhance its regular-season offerings, while givingsubscribers a choice of tournament games to watch.
He pointed to a situation two weeks ago, when the local CBSaffiliate had to choose between games featuring the University of North Carolina and WestVirginia University, two popular local teams. A cable package would have allowed fans ofboth teams to watch the games live.
"We would do very well [with thepackage], and it would enhance our ability to sell the regular-season college-basketballpackage," Hodgins said. "We spend so much time explaining to fans that althoughthey pay $70 to get extra regular-season games, when the really big games come up, theycan't see them."
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