Figuring out which is the best deal in TV sports is a lot like deciding on the best athlete ever. It's a tangle of competing claims and intangible values. And when the competition is to find the best deal, the answer is even more subjective. Best for whom? The network that has the deal, the sport that locked in the contract, or the advertisers that will pay to be there?
"It's really difficult to say which package is the best deal overall," says media buyer Tom DeCabia, Schulman/Advanswers NY. "The NFL deal is the most expensive, but it really does great things for all of the networks that own it. Major League Baseball, NCAA Men's Basketball and PGA golf all have good stories. It just depends on what's happening in the sport and what's being spent on them. Each network will tell you they have the best deal."
Every deal starts with what the broadcaster is willing to pay, and as David Hill, Fox Sports Television Group chairman says, it starts with not overpaying. "I think the price was right for Bass Fishing," he says of Fox's one-time fishing experiment. "Seriously, I'm only familiar with the ins and outs of our deals and the values to us. What you find in any of these deals is that you don't know what the other guys are doing with theirs."
The intangibles, however, are what make the deals. For one thing, they allow the broadcasters to rationalize what otherwise would be considered overpayment for a certain sports property. When Fox Sports picked up the rights to the NFL from CBS, there is no doubt that it played a major role in making Fox a more important network. And it started the chain of events that led to CBS' getting the NBC's NFL package, which led to the most valuable recent sports lesson: the XFL. And now, with the XFL struggling, NBC can ill afford to lose its rights to the NBA, even if the league's ratings have bottomed out. Given NBC's precarious situation, the NBA is positioned to force the network to play defense if it wants to keep the hoops contract.
What's behind a good deal? Beyond the bucks are hidden enhancers. A network with a hot sports contract can use the games to promote its other programming, enhance its brand, or just deny competitors access to a particular sports property. A network that grabs a sports contract sometimes considers the even bigger picture: a relationship that gives it the inside track at renewal time.
"We can take baseball product on the network, put it on the regional networks, put it on FX and now put it on Fox Family Channel," notes Hill. "The same thing can be said of NASCAR. It has a halo effect across the entire breadth of the properties that we have. So each deal is different for each network, and one may be more valuable than another, but there is no way to actually quantify that."
And building a reputation involves a two-way relationship. For example, even though Fox was willing to outbid NBC for the rights to televise Wimbledon during the mid 1990s, Wimbledon officials determined that it would be detrimental to its brand name to simply accept the higher bid. It believed that the total value of its brand would be enhanced by continuing to associate itself with a network known for its consistent coverage of the grand-slam event.
Following is a look at each major deal, with ratings trends, dollars paid and an observation by an advertiser, who chose in each case to remain anonymous. While it is helpful to calculate the financial merits of sports as programming vehicles, though, it is but one form of measurement. The numbers don't lie, but they don't always tell the whole truth.
National Football League
Inside the ratings: From 1996 to 2000, Fox averaged a 10.8 national household rating for regular-season NFC coverage. CBS and NBC's AFC coverage over the past five seasons averaged a 10.1 rating, and ABC's Monday Night Football averaged a 14.3 national rating. MNF averaged a 16.2 in 1996 but only a 12.7 last year.
Advertiser's skinny: "Whoever has the NFL usually makes out because of the amount of programming you get from it and the way you can promote the rest of your schedule to the audience each week. Look what it did to CBS when they lost football and look what it's doing to NBC now without the sport."
Major League Baseball
Inside the ratings: During the past five seasons, Fox has averaged a 2.8 national HH rating during the regular season, remaining relatively flat from its 2.7 rating in 1996. But, since 1996, the World Series has been going downhill quickly. In 1996, Fox's coverage of Atlanta Braves vs. the New York Yankees averaged a 17.4 national HH rating. In 1998, that fell to a 14.1. And this past season's subway series between the Yankees and Mets scored only a 12.4.
Advertiser's skinny: "If there is a strike this year in Hollywood, it's going to look like the greatest deal in the world for Fox because it will take up the whole month of October. If there is a lockout or strike in the game the following season, then it's not so great."
National Basketball Association
Inside the ratings: NBC's regular-season ratings over the past five years averaged a 4.4, while TNT/TBS' national cable coverage since the 1996-97 season averaged a combined 1.1 national rating. NBC has gone from a 5.1 rating for regular-season coverage down to a 3.3 over the past five years. TNT and TBS' coverage has slipped from a 1.25 average to a 0.95 national HH average over the same period. If Jordan comes back, there may be help on the Nielsen front.
Advertiser's skinny: "The NBA is a property on the downslide right now but could easily come back up with a number of good stars. Obviously, a Jordan comes along once in a lifetime. They need to find the next superstar and a way to market that sport better."
National Hockey League
Inside the ratings: Fox and ABC's national regular season coverage has averaged a 1.6 national household rating since the 1995-96 season. In 1995-96, Fox averaged a 2.1 rating. Last year, ABC's first year of its new contract, the regular-season average was only at a 1.3. On ESPN, regular-season coverage has averaged a 0.6 rating nationally. The 1996 regular-season average on ESPN was a 1.0.
Advertiser's skinny: "Greatest sport live, but the league has never learned a way to market itself to the U.S. audience. They have great stars and good marketing potential, but the problem is, it hasn't caught on with American viewers. [The NHL has] a huge problem."
Inside the ratings: ABC, CBS and ESPN's combined Winston Cup coverage since 1996 has averaged a 5.0 national rating. In 1996, the average rating was a 4.4; last year, the three networks averaged a 5.0.
Advertiser's skinny: "It has shown growth every year, and it's growing well at Fox. It's probably the top-growing sport of them all right now."
NCAA Men's Basketball Tournament
Inside the ratings: CBS' regular-season coverage of men's basketball averaged a 2.0 national household rating ('95-'96 through '99-2000), while ABC averaged a 1.8. CBS' NCAA Tournament ratings (excluding championship games) over that same span was a 7.0. CBS' Tournament average, excluding the Championship game, dipped from a 7.5 in 1996 to a 6.4 last year.
Advertiser's skinny: "It's a great tournament and a great association. It's nothing but positive image when you associate with the NCAA."
Inside the ratings: The national championship game has remained nearly flat over the past five seasons. In 1996, the championship game averaged a 17.9 national HH rating; the 2000 game averaged a 17.8. ABC's regular-season ratings have gone from a 5.4 national average in 1996 to a 4.6.
Advertiser's skinny: "Instead of having all of the bowl games on one day like they used to, with all of them on New Year's Day, spreading them out really helps."
Professional Golf Association
Inside the ratings: It's still all about Tiger. National coverage of PGA events over the past five years on ABC, CBS and NBC has seen a rise in the ratings with help from Woods. The five-year average (1996-2000) is a 3.3 national household rating, with last season's three broadcast-network clip garnering a 3.6 rating.
Advertiser's skinny: "It's a good place to be. When Tiger plays and Tiger is on the hunt, it spikes the numbers even higher. I think you have to know when Tiger is playing to sponsor it; if he's not, the sport just does its old average ratings."
Winter and Summer Olympics
Inside the ratings: NBC struggled with its coverage of last summer's Sydney, Australia, games because of the time difference. The network posted the lowest-ever Summer Olympics ratings, with a 13.8 national HH rating over the two-week event. That was a dramatic drop from NBC's 1996 Atlanta coverage, which averaged a 21.6 rating.
Advertiser's skinny: "I think it's the best deal in TV sports. I think NBC got a steal with the Olympics because the rights don't go up too much after each event. I think the Olympic officials shouldn't have sold them out so far. They would have been better auctioning them off every two years."
The Triple Crown
Inside the ratings: From 1996 to 2000, ABC averaged a 6.2 rating for the Kentucky Derby. Over that same span, ABC averaged a 3.8 for its coverage of the Preakness and a 4.1 for the Belmont Stakes. If there is a Triple Crown chance, the Belmont Stakes, the finale of the three-race event, more than doubles its ratings average.
Advertiser's skinny: "The Triple Crown for me has always been a strong event for sponsorship because the numbers are good and it delivers an upscale audience. But it is a sport that has fallen off a bit over the last several years."
David Carter, who contributed to this article, teaches The Business of Sport at the University of Southern California Graduate School of Business and is a principal of the Sports Business Group in Los Angeles.
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