Last year, CBS and Turner signed a 14-year, $10.8 billion deal to broadcast the men's NCAA basketball tournament. I sat down with Sean McManus , CBS News and Sports president, and David Levy, Turner’s president of Sales, Distribution and Sports, to discuss the deal.
Darren: A 14-year deal. That’s a long one. Is it the longest you’ve done?
McManus: Other than my marriage? It’s close. We did an SEC football and basketball deal that was 15 years and we just did an eight-year PGA Championship extension. We believe sports is so valuable that it makes sense for the CBS Corporation to devote ourselves to long deals.
Darren: Fourteen years (with no opt-out) is a long time in this economy. How can you be sure what you are buying now will be worth that towards the end of the contract?
Levy: By boss and his boss asked that question. Why are we doing a 14 year deal? And the answer really is the fact that what other tournament, what other event that you know of in television, other than the Super Bowl, that has a built-in passion base that people are filling out their brackets. To be able to have this event for 14 years? This is something that we’re all going to be successful on a profit basis because we don’t enter into any business relationship without making money and over the 14-year period we certainly will.
McManus: You have be really sure of the product, really sure of the appeal and we believe that sports, as you go forward, is always going to be prime real estate on network television. Sports are a very important of our portfolio.
Darren: The fact that the fans can watch all four games at the same time with four TVs or just switch thanks to the partnership between CBS and Turner . Is that a win-win for fans?
Levy: This event has evolved. CBS did an absolutely fantastic job in televising and making this event what it is today, but look at the consumer. This is a great benefit to the consumer. The consumer now can be the producer. They can go to any channel, any game they want, when they want to go to it. And I think that’s going to be a learning process for them in the sense that we are going to have Jim Nantz say “Hey, there’s a great game on TNT" or Marv saying, “There’s a great game on CBS." So I think this is a learning process for the consumer, but I think at the end of the day they’re going to love opportunity to be able to move around the television set, when they want or where they want.
Darren: I want to get back to the money. You guys paid a lot of money for this. Does sports maintain that great value because, unlike other shows, sports almost has to be watched live?
McManus: The Super Bowl or the Masters or the Final Four, you want to watch those events live and they don’t have as much value a day later or a week after they’ve been aired. Of all the programming on television probably the most TiVo-proof would be sports.
Darren: This is almost guaranteed madness every year.
McManus: I think what happens is you get people who don’t normally watch a lot of regular season basketball who suddenly get caught up in the madness. It’s an event that lasts almost three weeks, everyone has an office bracket that they fill out so everybody who doesn’t watch college basketball has a rooting interest because they want their brackets to be the best brackets. So it’s just the momentum builds and you get upsets and you get teams that you don’t expect to advance. The momentum builds and builds and builds until you get to the Final Four. It really is an event that captures the attention of the entire nation.
Darren: George Mason got the Final Four. Butler played in the championship game last year. How bad is it for ratings when the big traditional schools lose?
McManus: Generally speaking, you want some of the big national teams, Kentucky, Duke, North Carolina and Kansas to get through. But Butler is the perfect example of a team that not a lot of people had followed, who were an underdog who got to the championship game against a national powerhouse Duke and provided some of the best action any of us had ever seen in the NCAA basketball tournament. So if the underdog is a good story, they can often become as attractive as Butler did or George Mason did a few years ago. They can almost become as attractive as a big national team overnight.
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