The rights deal for the NCAA’s championship bundle is nearing its end, and talk about splitting certain championships out to sell separately is gaining steam.
Per the Sports Business Journal, media rights for the women’s basketball tournament being broken out of the bundle “seems like a certainty,” and there is momentum toward other events also being broken out.
However, the NCAA is wary of not breaking out too many events and making the rest of the package “so diluted it will lose any value.”
New NCAA President Charlie Baker and staff won’t have an easy decision when it comes to deciding how to go to market with their package of NCAA championship rights. Endeavor’s Karen Brodkin and Hillary Mandel are advising the NCAA on deciding which championships to pull out of the current bundled package and sell on their own. It seems like a certainty that the women’s basketball tournament will be sold as a stand-alone after it drew record ratings this past April. But what else? The women’s and men’s College World Series both rated very well, and women’s gymnastics and volleyball also have audiences. Supporters of these sports are advocating for them to be pulled out and sold individually. The fear is that if the NCAA pulls out too many popular sports, the package will become so diluted it will lose any value and defeats the purpose of maximizing rights fees and distribution. Remember, these are only for the championships — not the regular season or the conference championships. It’s limited inventory and that’s what the NCAA and Endeavor will have to navigate as they go to the marketplace. The NCAA will first negotiate with incumbent ESPN before going to the open marketplace if they don’t agree to terms. Talks are expected to unfold later this year.
Over the last year, there has been plenty of chatter about the NCAA selling the women’s basketball tournament separately. The championship bundle costs ESPN $40 million per year and expires after the 2023-24 season. The women’s basketball tournament alone is expected to fetch that much. In April, NCAA President Charlie Baker hinted that the tournament would be sold outside of the bundle, and record-shattering viewership for the Final Four and National Championship seemed to indicate he was on the right track.
I’ve been an advocate of breaking out as many sports as possible to maximize their value, but the note about not separating too many sports and diluting the value of the rest of the bundle makes sense. Breaking out some events other than women’s basketball, like baseball, softball, and maybe even gymnastics, volleyball, and hockey, makes sense, but if they’re all sold separately, how much value would there be in the remaining sports? Sure, if a smaller package can get a similar fee to what the larger package is getting, it would work out well for all sports, but if the value is too low, it could really doom those sports in both the near and long-term future.
The NCAA will need to carefully walk this tightrope. It wouldn’t be a surprise if only a couple more sports were broken out of the bundle, leaving some potential money-makers linked to other, less popular sports.
