- Darren Rovell, ESPN.com Sports Business reporter
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Editor's note: This is part of a four-day, seven-piece series on college basketball's biggest change agents in the past 20 years and what the future will bring.
In 1973, NCAA executive director Walter Byers was desperate to promote men's college basketball, so he went to see those in charge of programming for the big three networks -- CBS, NBC and ABC -- and offered them a deal he thought they couldn't refuse.
Byers wanted a network to broadcast a total of 10 regular-season games on Sundays throughout the season -- and it would get the rights to the NCAA Tournament for free.
At the time, CBS executives filled their schedule with NBA games. NBC was packed with NHL matchups and tennis matches. ABC was doing well with its original sports programming -- "Wide World of Sports" and "Superstars."
"Getting the rights for free wasn't good enough," said Kevin O'Malley, who was then in charge of college sports programming for CBS.
In the precable days, when networks ruled the world, the 20 hours Byers wanted was valuable time. NBC executives thought it was a better deal just to cut a check to the NCAA for the rights to the tournament -- a check that was worth a measly $1,165,755.
It turned out to be quite the bargain.
Although there were still roughly 2,000 tickets to the Final Four at the St. Louis Sports Arena available with less than a month to go before the championship game, 1973 was the last year that ever happened. NBC moved the title game from Saturday to Monday and UCLA's 87-66 win that year over Memphis State was watched in 13.5 million homes -- the largest audience to ever watch a college basketball game.
Part of the reason for the great draw was UCLA's dominance. The Bruins' nine titles in 10 seasons had made them America's team. During their run, they were featured on the cover of Sports Illustrated 17 times.
"I'm not sure there was moment that made college basketball big, but the UCLA dynasty certainly brought interest," said Tom Hansen, the Pac-10 commissioner who was then the NCAA's director of media operations. "There was an identifiable head coach in John Wooden, who had exciting, sustainable talent from Lew Alcindor to Bill Walton and beyond."
Over the next five years, support for college basketball continued to rise. The next big moment was the 1979 championship game between Magic Johnson's Michigan State team and Indiana State, led by Larry Bird. The Spartans' victory over the Sycamores was watched in almost 18 million homes.
In 1981, NBC paid $9.9 million for the rights to broadcast the tournament, but a contract with its popular late night host Johnny Carson, who insisted he would never be preempted, prevented them from showing the games during on a national basis during the week. So, earlier games were sold to affiliates on a per-game basis through independent producer Eddie Epstein.
That year, CBS's investment in the NBA was going downhill, and with the NCAA rights for 1982 up for bid, the network's executives thought it was time to take a chance with college basketball.
Two weeks before the 1981 tournament, executives for NBC and CBS sat in separate rooms of the Hilton at the Chicago O'Hare. It was there where O'Malley, then CBS Sports president Van Gordon Sauter and then CBS Sports vice president Neal Pilson pitched Byers on their idea.
CBS wanted the NCAA to reveal the tournament bracket live on-air and wanted to run highlights of each day's action and provide wall-to-wall coverage on weekends. ESPN had been broadcasting some of the early-round games since 1980, but the then-fledging cable network only reached 22 million homes, a fraction of the network audience.
"The American people didn't know who was playing who and they certainly had no idea who won the first round games because the earliest NBC would start covering the tournament was the second round," said O'Malley, who is now a television consultant for four major conferences as well as for the Bowl Championship Series. "And Walter fell in love with our idea."
The money didn't hurt either. CBS officials agreed to pay the NCAA $48 million to cover the tournament for the next three years. In the network's first year of broadcasting the later-round games, CBS officials saw the tournament was already paying dividends. The 1982 final between North Carolina and Georgetown received a 21.6 rating. The following year, ABC executives were so scared of college basketball's final night that they moved the Oscars from Monday back to Sunday.
The NCAA Tournament's expansion from 48 to 64 teams in 1985 meant even more Madness for fans, and CBS continued to be satisfied. CBS and the NCAA agreed to a new three-year deal worth $96 million, doubling the annual payout from the previous contract.
"The tournament delivers terrific entertainment and each year, you can rely on stories that will develop," said Pilson, who served as CBS Sports president for 12 years in the '80s and '90s. "It comes with the great coaching personalities and the colleges themselves are legendary so you never have to work extremely hard to sell Kentucky, Duke, North Carolina or a UCLA."
Since the original deal in 1982, CBS has signed five more contracts, with an average increase of 97.6 percent from deal to deal.
The largest increase was the 160 percent jump in 1991, when CBS first decided to carry all the games live. The year before, they had broadcast 12 games live and nine games taped, for a total of 47 hours of air time. In 1991, CBS stepped up coverage to 65 hours, knocking out the Thursday and Friday broadcasts of their popular soap opera, "The Young and the Restless." It was a very big deal at the time.
Trying to console loyal fans of the show, Syracuse Post-Standard columnist Frank Brieaddy wrote: "If it's melodrama you crave, then sit back and enjoy NCAA basketball."
The increased hours of coverage on the network turned the tournament into a much bigger business. The latest contract guarantees that all games will be broadcast live on CBS through the 2013 season and pays the NCAA an average of $545 million per year. As a result of the TV contract increasing by 8 percent each year, every win in the tournament soon will be worth $1 million to the winning school's conference.
The NCAA also benefits. With 80 percent of the NCAA's operating budget derived from the revenue made from the men's college basketball postseason television contract, the organization's budget has risen from $21 million for the 1989-90 season to $480 million last season.
By locking up the long-term rights (and the related ad sales), CBS also profits handsomely.
"The networks were and are very sophisticated companies with Harvard MBA-types running them," Sauter said. "No one was going to pay that kind of money for a property unless there was a benefit."
The cost of a 30-second advertisement for the Final Four is the second-most costly ad during sports programming next to the Super Bowl. In 1988, the price of a spot in the championship game was $375,000. This year, the same spot is expected to approach $1 million.
"You can sell out advertising inventory for the NCAA five times over," O'Malley said. "The little secret is that all the media buyers went to basketball schools on the East Coast."
Another good indiciation that interest won't be waning any time soon? Today, the in-person tournament crowd is two times larger per game and four times bigger in total than what it was in 1973.
"The moment that gets me every time I go to a Final Four played in those big football stadiums is when I see these people sitting 100 yards away from the end of the court in the upper deck," Hansen said. "You know they can't possibly see the game and yet they are there because they just want to be where the game is being played. That's passion. Not the people like us, that sit in the middle of the court 20 rows up."
Darren Rovell, who covers sports business for ESPN.com, can be reached at email@example.com.
Once unable to be given away for free, the TV rights to the NCAA Tournament are now a sports business monster.