Real-Time Quote
US News

Another Huge TV Deal Proves Sports Is King
CNBC.com | May 03, 2011 | 02:07 PM EDT

The Pac-10/12 will be announcing a 12-year television deal with Fox and ESPN reportedly worth $3 billion.

How is possible?

Easy.

Sports are the best bet on the entire television landscape. People get sick of sitcoms, reality shows and soap operas, but fans don't lose interest in a sport.

That's why networks don't have any problem signing deals that last as long as they do despite the fact that they have no idea what the economic or technological landscape is going to look like.

Let's recap what has happened on the college landscape alone. The Big Ten signed a 10-year, $1 billion deal with ESPN, the Big 12 signed a 13-year deal with Fox , CBS & Turner have a 14-year deal to broadcast March Madness and CBS has a 15-year deal with the SEC.

The length of deals is an extraordinary tribute to the content that sports provides. What type of bets would you make right now on how something will be received in 2020? I wouldn't have confidence in much.

So the consistency of the content is the first reason why the networks are ready to make the big bets. But consistency of how people watch is just as important. By that I mean that sports for the most part has to be watched live. And it will always be that way. As we rely on more and more mobile devices, scores aren't going to be able to be escaped and for a fan to truly enjoy a game, he or she has to be watching it in some form as it's happening.

That protects the advertising model, which supports the rights fees that these networks are paying, not to mention a greater willingness by the consumer to pay for monthly fees for these networks as watching at home starts to cannibalize the in person experience more and more.

I've had some people question if this Pac-10/12 deal is worth it. To answer that, you really have to put it in its place in the landscape. Sure, it's about the teams. But it's also about the fact that this conference deal is one of the last remaining deals out there. And as competition in the marketplace has increased, it's just as much about it being the Pac-10/12 as it is about having guaranteed, bonafide sports coverage on your network for next decade and beyond.

Questions? Comments? SportsBiz@cnbc.com

Real-Time Quote
omniture pixel