CBS, NCAA deal will boost sports Web site

CBS's blockbuster deal with the National Collegiate Athletic Association could mean lucrative e-commerce deals for SportsLine USA, a sports news Web site partially owned by CBS.

3 min read
CBS's blockbuster deal with the National Collegiate Athletic Association could also be a windfall for SportsLine USA, an online sports news Web site partially owned by CBS, through lucrative e-commerce deals.

CBS Sports, a division of CBS, yesterday signed a $6 billion, 11-year deal with the NCAA giving the network exclusive rights to broadcast the hugely popular NCAA college basketball championship tournament.

The deal, worth about $545 million annually, gives the network all television rights, including over-the-air broadcasting, cable television, satellite, digital and home video, the company said. CBS also acquired the rights for all content relating to these events on the Internet, including rights related to electronic commerce, and the rights to develop various NCAA-related web sites.

CNET TV: Newsmaker: Michael Levy
CNET TV: Michael Levy
The deal also gives SportsLine, of which CBS holds a 20 percent stake, a tremendous boost, analysts said. SportsLine is currently duking it out with Disney's ESPN.com to be the leading provider of sports content on the Internet. SportsLine also provides sports content for America Online.

The obvious benefit for SportsLine is that the new deal extends its exclusive coverage of the NCAA tournament which was set to expire in 2002. But the potential for broadband content and e-commerce may prove beneficial. The new deal is effective beginning in 2003. The NCAA tournament, set in the spring and commonly known as "March Madness," draws a broad cross-section of the United States, with 64 teams from around the nation competing for the championship.

"This is the first sports deal in history to extend beyond our traditional platforms into the world of new media," said Leslie Moonves, CBS Television's chief executive, in a statement. "This unique, comprehensive agreement delivers the added value of the Internet and the vast new audience it serves."

The deal allows CBS to extend its sports merchandising efforts as e-commerce continues to grow, and gives the network the potential to drive traffic to SportsLine through the rapid development of broadband applications.

"The deal covers all new media rights which shows that CBS is thinking about the Internet as a major part of its overall strategy," said Phil Leigh, an analyst at Raymond James. "The announcement is kind of a harbinger of what CBS is planning."

"I think the deal is a leading indicator of the future broadband content that will ultimately become manifest on the SportsLine site," said Leigh, adding that users will at some time be able to view any of the games played by the 64 teams. "I don't think it will happen in [2000] but I think it will happen sometime in the lifetime of this contract and sooner than most expect."

Analysts also expect CBS and SportsLine to redouble their sports paraphernalia merchandising efforts.

"This is one of the reasons CBS included merchandising as part of its negotiations," said Leigh.

The agreement also provides CBS with rights to radio broadcasts; rights to marketing and corporate sponsorship; and merchandising, licensing, publishing, printing and archival rights.

CBS is in the process of being acquired by Viacom.

This year, SportsLine has been striving to form alliances with professional sports leagues, signing deals with Major League Baseball and the Professional Golfers Association.

ESPN's Internet site still has a few steps on SportsLine, developing sites for the National Basketball Association, the National Football League and NASCAR.

SportsLine attracted 4.65 million unique visitors in September behind the 5.37 million pulled in by ESPN.com.

Shares of SportsLine surged 13.84 percent in morning trading, rising 5.5 points to 45.25. The stock has traded as high as 59.25 and as low as 14.25 during the past 52 weeks.