NCAA Agrees to $10.8-Billion Deal to Broadcast Its Men's Basketball Tournament

April 22, 2010

In a move expected to shore up the long-term financial health of college sports, the NCAA announced on Thursday that it had signed a 14-year, $10.8-billion contract with CBS and Turner Broadcasting to televise its men's basketball tournament. The deal will funnel at least $740-million annually to NCAA member colleges and will very likely include an expansion of the tournament field to 68 teams.

Athletics officials throughout college sports applauded the news, which comes as many programs have seen their own marketing agreements and budgets reduced.

"In this economy, think about how many things have gone backward," said Christine A. Plonsky, women's athletic director at the University of Texas at Austin. "The fact that this is a positive move forward is attributable to some really hard work at the negotiating table. ... And when you're talking about opportunities for young people, it's a blessing."

While the vast majority of those dollars will go to elite programs like those at Texas, many smaller athletics departments rely on their tournament distribution to support the day-to-day activities that keep their programs afloat.

"Clearly, it is not hundreds of thousands we're talking about, but it is very important that we receive some stability of funding," said Kent Weiser, athletic director at Emporia State University, a Division II program in Kansas. Emporia State has used its NCAA money to help pay for tutors, laptop computers, and buses to transport players to games. "These are things that Division I takes for granted but that make a lot of things possible for us," Mr. Weiser said.

The proposal to expand the tournament by three teams, which the NCAA's Division I Board of Directors will vote on next week, was one of several that the association's Division I Men's Basketball Committee considered. A separate proposal to increase the field to 96 teams was tabled, a move that drew praise from some observers. .

"Rejecting a proposed 96-team format should be applauded, as it appeared to create more conflicts and intrusions on the athletes' academic obligations," Amy P. Perko, executive director of the Knight Commission on Intercollegiate Athletics, said in an e-mail message. "That result was incompatible with the NCAA's operating principles for postseason competition."

Worries Over Dollars

More than 95 percent of the NCAA's revenue comes from its tournament contract, but in recent years association officials had expressed concerns that the next deal might not be as large.

The previous CBS contract—worth $6-billion, or about $500-million a year—was not set to expire until 2013. But association officials began renegotiating last summer with the hopes of avoiding a severe reduction in rights fees. (CBS was reportedly worried about losing money on the last deal, which was heavily backloaded.)

Under the new agreement, which includes Internet, wireless, and marketing rights, every game will be shown live on one of four national television networks. CBS shares early-round coverage with TBS, TNT, and truTV, but isn't on the hook for the full $10.8-billion.

When television networks agree to pricey sports deals, they often cover their costs by adding commercial air time during games. But the NCAA prevented CBS and Turner from doing that, said Kevin O'Malley, a television consultant and a former CBS executive who helped the NCAA broker the new contract. Under the deal, no game can have more than four commercial breaks in each half—the same arrangement the NCAA had in its previous tournament contract.

While several people lauded the NCAA for the guaranteed money it brought in, others said the big payout could lead to a further escalation of coaches' salaries and unnecessary facilities growth. And one critic questioned the logic of signing such a long-term contract in an uncertain media environment.

"We don't know what the TV or digital-rights market might look like in 14 years—much less in five years," said Andrew Zimbalist, a professor of economics at Smith College who studies the finances of college sports. In other words, it's possible that the association could have left money on the table.