As College Football Playoff Nears: ESPN VP Burke Magnus Talks BCS Television Deal
Under the current BCS deal, which runs through the 2014 title game, ESPN pays $100 million a year. ESPN swiped those rights from Fox in 2008, taking all BCS games to cable for the first time. It has been a decision that paid off for the network, which has also branded itself as the home of college football.
The next deal, which will be for eight years rather than the current four years, promises to be for a blockbuster amount of money, particularly if the four team playoff package becomes a reality. Expanding the rights package to eight years offers increased value for the networks. But ESPN's Mangus also believes it makes sense for college football.
"It stems the (playoff) debate; we've been in this four year cycle with the BCS, the presidential cycle, where you're never that far away from a change."
Magnus acknowledged that the BCS rights for eight years will attract all bidders. (Assuming, as we'll discuss below, that ESPN doesn't preempt that bidding war by buying the rights in the exclusive negotiating window).
"I think everybody (the major networks) will be there," Magnus said. "Even if they did nothing (to add a playoff) I think it would be an incredibly competitive bidding process between media entities trying to 'get' the BCS. It (the bidding process) was four years ago and it will be again, probably even more so."
Asked whether he believed that Google, Facebook, Apple or other nontraditional bidders might bid, Magnus replied, "I don't think so, not in this case. I think it will be more traditional media entities who are already invested in college sports at some level."
If the rights go to bid, you're probably setting the table for a three tier bidding war: ESPN, Comcast/NBC, and Fox.
Asked whether there might be a dual bid between ESPN and Fox to help offset the costs -- as we saw with the Pac 12 bidding rights -- Magnus said he didn't believe that would happen. "The games are such that I don't think there's enough of them to split. It would also be diffcult to have a split from a sales environment that I think would depress value."
So who will win the television prize for the first eight years of a college football playoff?
ESPN is the favorite since the network has an exclusive negotiating window before other networks can bid. If a college football playoff arrives, ESPN will have to significantly increase average payouts and would probably try to strike a deal before other networks could bid.
How expensive would that be?
When ESPN stole away the BCS rights from Fox it increased the payout by 50%.
Here's a guess that the rights fees would at least double to the neighborhood of around $200 million a year.
As part of the new television deal, Magnus stressed that ESPN and the college football power brokers were in favor of returning the title game to a date closer to January 1. "We like the concept of a meaningful New Year's Day," Magnus said. "Their desire to compress the schedule of games and to minimize midweek issues, we're on board with that...The biggest concern is mid-week games. Everything from a date perspective is on the table."
Thanks to a mid-week Orange Bowl that drew poorly, BCS ratings are down 9% thus far this year on ESPN. Magnus, who said that he has not yet had conversations with the SEC about an increased payout for 14 teams, believes that a strong rating for LSU-Alabama could lead to an overall increase in viewers. He is not concerned that the rematch is a "regional" game.
"I don't feel that. You're talking about the SEC and you're talking about Alabama and LSU, I think the region's the entire country. I think this is a national game without question."
In closing, Magnus said, "Can it (college football) be better? It absolutely can be better and I think that's what the stewards of the sport are focused on."
Ultimately, it's looking more and more like by November of 2012, college football may finally have an announced playoff. That playoff wouldn't begin for two more years, but by later this year the long national outrage of fans clamoring for a college football playoff may finally be quelled.