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Turner, CBS team on $8.8B 'March Madness' extension

Followinga rights extension, Time Warner Inc.'sTurner Broadcasting System Inc.and CBS Corp. will beteammates in "March Madness" through 2032.

The partners,which just completed the sixth of a 14-year, $10.8 billion deal for the Division I Men's Basketball Championshipthat went into effect with the 2011 tournament, announced an eight-year, $8.8 billionextension with the NCAA that covers all platforms, including those that have yetto be established.

The pactscheduled to end with the 2024 tourney averaged a little more than $770 millionin annual rights fees, while the renewal sees that average jump to $1.1 billion.

On aconference call discussing the agreement, Turner President David Levy and CBS SportsChairman Sean McManus said the NCAA deal has been profitable to date and they expectit to remain that way over its term for their companies. Negotiations began with the NCAA last fall, with the extensionfinalized at the Final Four in Houston from April 2-4 and the pact reportedlysigned shortly afterward.

Underthe agreement, Turner and CBS Sports will maintain the existing sales partnershipsurrounding the NCAA Corporate Champion and Partner program. This program has grownto 17 members from nine since the previous deal was announced in 2010, with thosecompanies committing mediadollars around the event, which has continued to dunk ad sales gains.

NCAAPresident Mark Emmert said the plan calls for the tournament field to remain at68 teams over the course of the extended deal.

As hasbeen the case since Turner and the broadcaster began working together in 2011, thenew agreement calls for all opening-, first- and second-round games to continueto air on TBS (US),CBS (US), and , with the companies splittingcoverage of the regional semifinals and regional finals each year.

Livecoverage of the Final Four national semifinals and national championship will continueto alternate between CBS and Turner each year, with the former broadcasting thethree marquee games in 2017 and the latter airing them in 2018. This past year sawTBS present the three contests from Houston, including Villanova's buzzer-beating77-74 triumph over North Carolina in the title tilt on April 4, which marked thefirst time in the tournament's 78-year history the championship game ran on cable.

Askedon the call if CBS' coverage of the 2018 national semifinals and championship gamefrom Glendale, Ariz., will be flanked by the Team Streams, home team-dedicated telecastsof the participating teams that have aired on truTV and TNT, McManus said the partnershave not "crossed that bridge yet," as some issues with [CBS] affiliates need to be addressed.

Televisioncoverage across TBS, CBS, TNT and truTV has averaged more than 10.2 million totalviewers in its respective game telecast windows over the six years, with the NCAAMarch Madness Live app more than doubling the number of its live video streams andlive hours of consumption since 2011.

But the2016 tournament sustained a drop in TV ratings, with the 67-game tournament averaging9.4 million viewers, down from 11.3 million in 2015, which had been the event'sbest performance in 19 years. Despite its thrilling finish, the Villanova-NorthCarolina championship game drew a combined 17.8 million viewers across TBS, TNTand truTV, the fourth-lowest audience for the college championship clash, and a37% decline from the 28.3 million who watched Duke-Wisconsin in 2015 on CBS.

Levysaid the combination of 11 early upsets, including an opening-round ouster of MichiganState, and the absence of such brand names as Duke, Kansas and Kentucky in the latterrounds, hampered the ratings for the entire tourney, not just the championship game.

"Thisyear was sort of an anomaly," Levy said on the call. "The storylines andthe matchups, as well as the competitiveness of the games, really played into thewhole tournament. Case in point: last year's 2015 Kentucky-Wisconsin semifinal gameon TBS, was the highest-rated game in 19 years, broadcast or cable. If there isthe right storyline, the right matchup and a competitive game you're going to geta rating whether its broadcast or cable."

Levysaid the decision to extend the deal was an easy call considering the scarcity ofmarquee sports events.

"FromTurner's perspective, there are very few premium sports properties available thatproduce the kind of value the NCAA tournament delivers to our distributors, ouradvertisers and our consumers," he said. "As the media landscape continuesto evolve, these expansive rights provide us with incredible opportunities to buildand pursue new business extensions while developing a deeper connection to our fansacross all these different platforms."

McManussaid the deal is in keeping with the network's strategy of airing large, iconicevents, whether music's Grammy Awards, the Super Bowl, or the popular hoops tourney.

"Whenthe opportunity presented itself to talk to the NCAA and Turner to extend anothereight years, we were very enthusiastic to do that," McManus said on the conferencecall. "The fact that we're securing another big event that has been part ofCBS for 35 years is a really great addition and continuation to our lineup of premierevents on CBS."