ESPN’s top executive said he’s “willing to be flexible” with its rights to college football’s postseason now that the format is expanding, a move that’s likely to require broadcasters to pay even more in fees to air the games.
(Bloomberg) — ESPN’s top executive said he’s “willing to be flexible” with its rights to college football’s postseason now that the format is expanding, a move that’s likely to require broadcasters to pay even more in fees to air the games.
Earlier this month, the College Football Playoff Board of Managers voted to triple the number of teams that play in the postseason to 12, as soon as 2024. Some have estimated that a new TV contract for the expanded college football playoff could be worth nearly $2 billion, a sum that would easily make it the largest deal ever in collegiate sports.
“We’ve been clear to anyone who is interested that we are very willing to be flexible here and be creative in terms of this expansion,” ESPN Chairman Jimmy Pitaro said in an interview.
The Walt Disney Co. unit currently holds the postseason rights. The championship game is one of TV’s most popular events. Nearly 23 million viewers watched last year’s game between the University of Alabama and University of Georgia across ESPN’s networks, up 19% from the year before.
ESPN could consider sharing the rights but wants to keep the championship game and several playoff games, people familiar with the matter said.
If ESPN split the TV rights, it could create an opening for Amazon.com Inc. or Apple Inc. to gain a bigger foothold in sports. Both tech giants have become more aggressive in bidding on rights.
That competition, along with the types of structural changes to college sports that led to the new playoff format, have ratcheted up prices for broadcasters. Last month, the Big Ten Conference said Fox Corp., Paramount Global’s CBS and Comcast Corp.’s NBC will collectively pay $1.1 billion a year for broadcast rights, a record for college athletics. Two years ago Disney agreed to pay around $300 million annually to show the Southeastern Conference, up from the $55 million per year that CBS has been paying.
But ESPN has also shown a willingness to walk away from sports rights that it deems too expensive. Last month, it declined to pay about $380 million a year for a Big Ten package, ending a longtime relationship with the conference. ESPN currently pays on average about $600 million a year to broadcast college football’s postseason.
“As it pertains to college rights, we really like our hand,” Pitaro said. “We’re incredibly well-positioned here.”
ESPN has been a focus of investors in recent weeks after activist Dan Loeb wrote to Disney Chief Executive Officer Bob Chapek suggesting he spin the sports channels off to shareholders. Over the weekend, Chapek said the ESPN sports networks are critical to his overall vision of the company. Loeb tweeted on Sunday he is no longer pressing for a divestiture after “gaining a better understanding” of ESPN’s potential as a standalone business.
Pitaro said that being part of Disney, which also owns the ABC broadcast network and Hulu, has helped ESPN win recent rights deals.
The executive is now focused on renewing ESPN’s deal with the NBA. ESPN shares the broadcast rights with Warner Bros. Discovery, which owns TNT. That contract ends after the 2024-25 season.
“We’ve made it clear to the league that we want to stay in business with the league,” Pitaro said. “We would like to engage sooner rather than later here because it’s such an important property not just to ESPN but the entire Walt Disney Company.”
(Updates with ESPN wanting to keep several playoff games in fifth paragraph.)
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