April 22, 2010 / 5:16 PM / 7 years ago

NCAA signs $10.8 billion basketball tourney TV deal

<p>Duke's Jon Scheyer (30) and Lance Thomas celebrate as Butler's Matt Howard lies on the court after Duke won their NCAA national championship college basketball game in Indianapolis, Indiana, April 5, 2010.Mark Blinch</p>

CHICAGO (Reuters) - The NCAA said on Thursday it signed a $10.8 billion deal with CBS Corp and Time Warner Inc's Turner Broadcasting for the media rights to its popular and soon-to-expand men's Division I college basketball tournament.

The 14-year broadcast, Internet and wireless rights deal runs from 2011 through 2024, and replaces one the NCAA opted out of with CBS, which televised the final won this year by Duke University.

The new deal, at an annual average of $771.4 million, dwarfs the 11-year agreement signed in 1999 with CBS alone, which was worth $6 billion, or about $546 million per year.

"The tournament's popularity and success outgrew the ability for one network to provide all the coverage fans are looking for," David Levy, president of sports at Turner, said on a conference call.

"We all know that marquee sporting events are expensive propositions, but we also know that it's must-see programing that drives audience," he added.

The NCAA said the tournament will expand to 68 teams from 65 that played this year, though some officials had discussed including up to 96 teams. CBS and Turner said the deal allows for expanded coverage if the NCAA adds more teams later.

CBS and Turner officials declined to discuss the financial details of their partnership, other than to say they will share revenue and expenses.

The two companies will share advertising and sponsorship revenue, and production costs. Time Warner said in a regulatory filing that in the event the rights fees and production costs exceed revenue, then CBS's share of the shortfall is limited to a specified annual amount ranging from $30 million to $90 million, or about $670 million over the entire deal.

EXPANSION DEAL

CBS has broadcast the Division I men's basketball championship since 1982. This year's title game between Duke and Butler University earned an average national household TV rating of 14.2, up 31 percent from last year and the highest rating in five years.

"The opportunity for viewers to watch whatever game they want to on up to four different networks has to result in more eyeballs, more gross rating points and more exposure for the tournament, thereby creating much more value for the advertisers," CBS News and Sports President Sean McManus said.

Costs for CBS had continued to escalate under the previous deal, but the new agreement puts CBS "on solid financial footing for lasting profitability," he said.

Teaming up with Turner allowed them to top such rivals as Walt Disney Co's ESPN sports network, McManus said.

As part of the agreement, all games will be shown live across four national TV networks beginning in 2011, the NCAA said. In addition, CBS and Turner Broadcasting will collaborate on the NCAA's corporate marketing program.

The NCAA said the Division I men's basketball committee unanimously passed the recommendation to expand the tournament. It will be reviewed by the board of directors on April 29.

NCAA Interim President Jim Isch said the expansion decision is separate from the broadcast deal and subject to NCAA members. He said everything was still on the table but 68 teams was the recommendation for now.

Beginning in 2011, first- and second-round games will be shown nationally on CBS and Turner's TBS, TNT and truTV networks, the NCAA said.

CBS and Turner will split coverage of regional semifinal games, while CBS will cover the regional finals and the rest of the event, including the championship game through 2015.

Beginning in 2016, coverage of the regional finals will be split by CBS and Turner, with the Final Four and final game alternating every year between CBS and Turner's TBS.

Reporting by Ben Klayman, editing by Gerald E. McCormick and Matthew Lewis

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