The Future of Multimedia Rights in College Athletics? Outsourcing or In-House?

Before examining why schools have been outsourcing their valuable multimedia rights, it is first prudent to see what exactly they are giving up. According to the Oxford dictionary, multimedia is the use of a variety of artistic and communicative media. This vague definition proves the point that the terminology is open-ended and left to the interpretation of those drawing up the contracts. Typically schools that are outsourcing their multimedia rights include hospitality, signage, print, digital, corporate sponsorships, television, radio and coaches’ shows. The schools outsource these rights to a third-party in order to garner a guaranteed revenue stream. Outsourcing also reduces the number of employees at the university, typically when the rights are sold, the third-party will allocate at least one full-time member of their staff to oversee the rights. Depending on the market size and demand for the school, these staffs can be much larger. Some of these deals have additional performance based revenue, while others are flat annual fees paid to the schools that have no bonuses or built-in incentives.

The two major players in the college multimedia rights market are IMG College and Learfield Sports Properties. As of June 1, 2015, IMG College owns the rights to 76 Division I schools,while Learfield controls the rights to 89 Division I schools and they share the rights to Alabama, South Carolina and Miami. Other owners of multimedia rights include CBS Collegiate Sports Properties, Fox Sports, Rockbridge Sports Group and JMI Sports. Over 160 schools currently manage their own multimedia rights.

Five years ago, a few of the powerhouse football schools held on to their multimedia rights and sold the assets internally. Some of the holdouts included Ohio State, Michigan State, University of Southern California and West Virginia. Since then Ohio State and West Virginia have signed with IMG College and the University of Southern California has signed with Fox Sports. Mark Hollis, the Athletic Director at Michigan State since 2008, has kept the in-house model a staple of Michigan State. Michael Smith of Street & Smith’s SportsBusinessJournal, wrote a great piece in 2013 chronicling how Michigan State was possibly leaving cash on the table, but enjoyed the benefits of controlling their own rights. These benefits include having complete control over your rights and portraying transparency with your sponsors. Instead of dealing through a third party company, all of the Michigan State sponsors work directly with the athletic department. As of 2013, Michigan State was receiving around $6m per year for their multimedia rights while their competitors in the Big Ten including Wisconsin ($7-8m), Michigan ($8-9m) and Ohio State ($11m) were all garnering more from their rights. The advantage for Michigan State comes down to their ability to relate with their sponsors and to accommodate local sponsors that may otherwise be forgotten.

For over one year, Michigan State was the sole member of the Power Five conferences that was handling their multimedia rights in-house until early July 2014. Last July, Syracuse University, which had recently joined the ACC, terminated their agreement with IMG College, one of the two largest rights holders amongst college properties (Learfield Sports being the other). Less than two months later, at the end of August, Syracuse and IMG had confirmed a new rights agreement, it can be assumed for a larger rights fee than had originally been agreed too since their old deal had seven years remaining prior to being terminated.

In October of last year, Arizona State terminated their agreement with IMG College claiming damages of over $5m for “a failure to meet contractual obligations”, which according to reports in the Arizona Republic were mostly from a failure to provide contractually obligated radio coverage and spots. Arizona State was prepared to walk away from $7m in guaranteed payments per year through 2021. The Sun Devils have retained their rights and joined Michigan State as Power Five schools handling their rights in-house.

This spring, Larry Scott, commissioner of the Pac-12 Conference, announced that the Pac-12 would be exploring a new conference-controlled model eliminating third parties such as IMG College or Learfield Sports. By cutting out the third party, this would retain a larger piece of the revenue. Scott brought in two consultants, Chris Bevilacqua and JMI Sports’ Tom Stultz to help with the multimedia rights study. Last year, JMI Sports signed a multimedia agreement with the University of Kentucky for 15-years and $210m for an average of $14m per year. Stulz and Bevilacqua are the perfect combination to assist with this study due to Bevilacqua’s familiarity with the conference. This move is a long way down the road due to the long-term nature of multimedia rights deals unless member schools intend to buy themselves out of contracts or find ways out similar to Arizona State. The league has already sold league-wide deals to AT&T and Dish Network successfully, so it would be intriguing to see the value they could command with the quantity of inventory that would be available. The Pac-12’s expansive coverage of the West Coast along with their already established Pac-12 Networks would provide an unparalleled experience for potential sponsors.

As the Pac-12 is exploring a conference-wide model, schools in other conference continue to finalize deals with third party rights holders, looking for a guaranteed revenue stream. Two schools that recently finalized multimedia agreements for the first time include Virginia Commonwealth University (VCU) and Georgetown University. VCU announced a 10-year agreement with Learfield Sports that will guarantee the university $20m over the life of the contract. VCU is an attractive school for Learfield due to the recent success of their basketball team. Learfield also controls the rights to Massachusetts, Rhode Island, Saint Louis and Duquesne all members of the Atlantic 10 Conference. The expectation according to VCU athletics director Ed McLaughlin is that the “agreement will help to grow our resources, our national recognition and our ability to create sustainable success for our student-athletes and coaches”. Learfield’s financial obligations to VCU along with their successful track record is the most often reason that schools decide to outsource their rights. The methods employed by third party Learfield and IMG College are proven commodities and if for some reason they don’t have the financial success expected at your specific school or market, there is typically a guarantee in the contract, which for VCU will amount to an average of $2m per year.

Georgetown is a founding member of the BIG EAST Conference. As a Jesuit institution, Georgetown is known for their academic curriculum along with their high ethical standards. Their recent 10-year multimedia rights deal with Fox Sports guarantees them between $1-3m per year depending on their performance, as well as a revenue-sharing aspect that activates once Fox recoups their investment. Fox Sports will look to gain from their second foray into the multimedia rights game investing in a broadcast partner for the second time (University of Southern California, a member of the Pac-12). By controlling the multimedia rights, as well as being a broadcast partner, Fox Sports stands to gain a lot from the Hoyas’ success on the hardwood. Athletic Director Lee Reed had the following to say in a recent interview:

“In higher education, especially at Georgetown, we will leave some money on the table if it’s not the right deal for us and it doesn’t make sense for us…but we still have a bottom line that we’re trying to get.”

Georgetown would not have made this decision to outsource their rights if the partnership wasn’t the right one. Fox Sports currently controls the multimedia rights for the BIG EAST as well, which makes one wonder what the media giant has in store for the future. In the short-term Georgetown will benefit from the financial returns and creative partnerships/sponsors that Fox Sports is able to bring forward. In the long-term this deal opens up possibilities and allows for maximum flexibility for both the BIG EAST and Fox Sports.

Here is a PDF with a table containing all DI schools and whom currently managers their multimedia rights. This chart has been updated as of June 1, 2016. A few deals included are going to start on July 1, 2016. Please let me know if you have any comments or corrections to this information.

Brooklyn Cyclones Different From The Rest Of MiLB. What is BIRCO?

In 2008, Minor League Baseball (MiLB) launched a subsidiary known as Baseball Internet Rights Company (BIRCO) to manage the digital and interactive media rights for their clubs and leagues. By establishing BIRCO, MiLB was looking for a way to standardize their offerings amongst their constituents as well as take advantage of their expansive network for MiLB-wide sponsorship opportunities. BIRCO has helped MiLB to secure a multi-year agreement with partner for their radio broadcast rights. The deal with TuneIn brought MiLB games to a number of new platforms and available across the globe to over 40 million monthly listeners.

MiLB President Pat O’Conner said the following in regards to BIRCO:

“BIRCO is going to be a leader for us in virtually every aspect of our business: e-commerce, exposure, everything else,” O’Conner said. “Right now, we’re limited to 160 communities. With BIRCO, we’re only limited by AC/DC power and an Internet connection. It opens up our universe.”

In 2000, the owners of the 30 major league baseball clubs were eight years ahead and looking for a way to take advantage of the quickly growing internet. The 30 owners decided to pool resources and invest in a centralized platform to run their websites and stream video. Major League Baseball Advanced Media was born and now (MLBAM) handles the websites, social media operations, smartphone and tablet applications for the league, as well as the websites and web streaming for the 30 Major League Baseball teams. MLBAM has a growing list of clients mainly for their video streaming services, clients including ESPN and WWE. Another client of MLBAM happens to be the 17 leagues and 159 teams in MiLB aligned with BIRCO.

MLBAM hosts and manages as well as individual team sites for all of the leagues/teams of BIRCO. As of June 16, 2015, every team in the International League, Pacific League, Texas League, Southern League, Eastern League, California League, Carolina League, Florida State League, Midwest League, South Atlantic League, Northwest League and Pioneer League have websites that are managed by MLBAM. Websites are hosted, although held no information for Gulf Coast League, Dominican Summer League, and the Arizona Summer League, probably because each of these leagues are Rookie Leagues that do not typically receive much fan fare or publicity as the lowest level of affiliated ball.

In the Mexican Summer League (Triple A), one out of the 16 teams in the league had a website uniform with the rest of MiLB. The ‘Los Saraperos De Saltillo’ website was the only one managed by MLBAM, while the rest of the league had websites hosted on different platforms. Two Mexican League team websites linked on (Piratas and Broncos) were inactive domain names.

The only remaining affiliated league is the New York Penn League (NYPL) 13 of the 14 members of the NYPL have websites that are managed by MLBAM, with the Brooklyn Cyclones as the lone domestic team to have a website that is not hosted and managed by MLBAM. The Brooklyn Cyclones’ unique approach to their website, follows suit with the organizations values as innovative thinkers whom have been able to entertain their fans with a number of thoughtful and successful promotions.

BIRCO provides a uniform structure for the affiliated MiLB teams, a safety net of sorts for their ticketing, sponsorship and website operations. The Brooklyn Cyclones outside-the-box thinking certainly does not come without any risks, but it could possibly be met with high rewards. The Brooklyn Cyclones continue to make headlines with their outrageous giveaways and game day promotions; this approach aligns well with their prerogative to breakthrough the clutter and to distinguish themselves from the crowd.

If anyone has any further information available on how/why the Brooklyn Cyclones made this decision, or any additional information on BIRCO, I would be very interested to hear it!

What is the American Sports Network? Who is Sinclair Broadcasting Group?

In July of 2014, the Sinclair Broadcast Group announced the launch of the American Sports Network (ASN), a college sports channel that would be broadcast on Sinclair’s stations. At launch they had deals in place with Conference USA, the Colonial Athletic Association, Big South, Southern Conference and Patriot League. The network launched in advance of the football season. The Sinclair Broadcast Group owns or operates over 150 stations in 70+markets across the nation. Sinclair announced at the end of September 2014 that they had expanded ASN syndication. The syndication agreements expanded distribution of ASN in to 67 non-Sinclair television markets. ASN is now available in over 83 million households for select games.

The American Sports Network is just about to start Year Two and has added additional rights to the Atlantic 10, Horizon League, Ivy League, Ohio Valley Conference and Western Athletic Conference. The collegiate events that ASN has broadcasted as a result of these agreements include football, men’s & women’s basketball, men’s ice hockey, men’s & women’s soccer, baseball, softball, women’s volleyball and men’s & women’s lacrosse.

In January, ASN acquired regional rights to Real Sale Lake of Major League Soccer, an expansion in to the regional rights of a professional team for the first time. ASN will air non-national regular season matches for Real Salt Lake and will cover the cost of the productions as well. Sinclair was able to leverage their expansive syndication to broadcast the Real Salt Lake games to a larger audience than that Sale Lake TV market, which currently has less than a million homes. Instead ASN made the Real Salt Lake games available to more than 5 million homes in cities in fives states: Las Vegas, Boise, Reno, Albuquerque, Phoenix and Tucson. This gave Real Salt Lake the fourth largest distribution for their games on a regional level, trailing only New York City FC, New York Red Bulls and Los Angeles Galaxy.

In May, ASN reached an agreement with Minor League Baseball (MiLB) to televise a weekly game. This agreement will showcase 25 teams, 11 leagues and 20 Major League Baseball affiliates for a total of 15 games. Last year, MiLB struck a deal with CBS Sports Network (CBSSN) that saw the network broadcast 15 games over the course of the season, this year their deal is for only 10 games.

“We look at our new relationship with ASN as yet another way to expand the reach of Minor League Baseball beyond the ballpark,” said Michael Hand, Minor League Baseball CMO and President, MiLB Enterprises. “We have been a part of the sports landscape for more than a century and provided entertainment to millions of fans. We’re thrilled to bring the Minor League Baseball grassroots experience into more American homes and tell the incredible stories of our clubs while highlighting the commitment made to each community.”

Minor League Baseball has 240 teams in 19 leagues. ASN has found a niche producing content for regional or national distribution through their established vast Sinclair network. Their agreement with Minor League Baseball provides an avenue for more content in the future to fill out their calendar with live sports programming. This story is one to follow, as they continue to add partners and secure more rights to live content.

ESPN Explores Innovative Remote Integration Model (UPDATED: 2/05/17)

The last few years have seen an exorbitant growth in the value of live sports rights. Networks have stockpiled these live rights in order to provide wall-to-wall live sports on their 24/7 channels dedicated to sports. With the quantity of sports being produced, and the price at which the rights are acquired constantly growing, it comes as no surprise that the networks are looking to cut costs. The challenge for the networks is to cut costs, while the only thing rising faster than the live rights is the expectation of their viewers.

One way that ESPN has been able to cut costs, without compromising the high quality of their broadcasts is by implementing more of an “at-home” workflow. Since NBC heavily relied on an “at-home” workflow at the 2008 Beijing Olympics, profiled in the October 2008 issue of Broadcast Engineering magazine, the other networks have looked into ways to incorporate this workflow in to their own events. In 2013, ESPN looked for a way to expand this concept, and implemented their own remote integration model (which would come to be known as REMI), which would culminate with their production of the 2014 FIFA World Cup from Brazil.

“Despite the changes behind the scenes, viewers should receive the same quality production level that they’ve come to expect from ESPN,” Dave Miller, ESPN senior coordinating producer said. “In short, we will maintain a consistent level of quality in a more efficient way.”

The Pac-12 Networks launched by the Pac-12 Conference in August of 2012, has heavily relied on an at-home workflow in order to not only produce more events at a lower cost, but also to supplement their broadcasts with a wide array of equipment that wouldn’t have been available before for the quantity of events. According to Sports Video Group, 277 of the 850 live events relied on the IP production model, with almost all of their events receiving support utilizing their IP studios located in San Francisco.

In 2013, ESPN delved into this type of IP production-utilizing fiber to send raw action and host feeds of the X Games back to their broadcast center located in Bristol, CT. The savings realized by ESPN by utilizing this type of at-home workflow stem from the reduction in the number of editors, producers and support personnel along with their travel expenses, hotels and per diems.

In November of 2014, at the start of the college basketball season, ESPN announced that they would be expanding their Bristol integration on basketball productions. With a planned 2700 college basketball games planned across all of ESPN’s outlets. ESPN announced in a press release that they would “supplement its on-site event presence with production support originating at ESPN”. See below how ESPN planned to utilize this new remote integration model.

“We have a new state-of-the-art facility and a commitment to the latest production innovations,” said ESPN Vice President, Remote Operations, Chris Calcinari. “Given those resources and the frequency and volume of college basketball, we are able to try something new.” 

Of the actual specific plans, Calcinari noted, “For these select games, we plan to bring a smaller production truck to the event site with our standard complement of cameras, plus other equipment and operations personnel. The live individual camera and audio feeds will be sent back to ESPN in Bristol where a producer and director will be located, along with commentators who will call the action.”

The 2014-15 college basketball season is now in the past. ESPN began to test this new technology on December 2nd with Stephen F. Austin traveling to Memphis on ESPNews with Marc Kestecher (PxP) and Malcolm Huckaby (analyst) calling the action. The REMI model was implemented on 43-college basketball broadcasts airing predominantly on ESPNews and ESPNU, along with one game on ESPN2 (Dayton at George Washington on February 6, 2015). Nine conference games were between teams in Power Five conferences. The only Power Five conference that did not have a REMI produced game was the Big Ten. This table provides a glimpse at which games were produced using the remote integrated model along with the talent assigned to call the games from the Bristol, CT studio. ESPN has managed to maintain their high-quality broadcast standards and continued to produce the X Games, Tennis and Major League Soccer using the REMI model.

Look for ESPN to increase the number of events that they produce using this model, as they streamline their operations and as their capacity to produce these events increases. As reported by Chris Korman of USA Today, remote integration can save up to 30% per broadcast. The average cost of a Major League Soccer broadcasted using a traditional production truck is between $90,000 and $120,000. With cost savings realized using remote integration of almost $30,000 that can either be reinvested in technologies to improve the quality of every broadcast, or used to secure new rights. Amy Rosenfeld, an ESPN senior coordinating producer, said “These evolutions will allow us to put more things on live TV, to reach more people with the events they care about. That’s what we want to do.” ESPN has long lauded itself as the ‘World Wide Leader’, through continued innovation and resourcefulness they continue to provide an endless amount of content available across a plethora of platforms. The remote integration model (REMI) is just the latest method employed to bring the consumer more content than ever before.

UPDATE as of 2/5/17:

For the 2017 College Basketball season, ESPN has planned to produce approximately 175 games (between men and women’s games) using their REMI model. With games airing on ESPN, ESPN2, ESPNU and ESPN3 they’ve grown comfortable with the production workflows and are confident that the viewing experience is not altered enough to impact the consumer. As many as 12 games on ESPN may be produced as REMI’s including games from premier conferences: Big 12 and Pac-12. In addition, possibly as many as 95 games may be produced as REMI’s for ESPN2