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March Madness May Move to Cable

Last year the NCAA looked on with envy as the BCS, despite a down economy, hit pay dirt with a $500 million dollar deal to move their games off of broadcast TV to ESPN.

Now the organization is considering jumping out of its $6 billion dollar deal for the NCAA Basketball Tournament with CBS, expanding the tournament to 96 teams and moving it to cable as well.

CBS has been the home of March Madness since 1982, and won't give up the elite event without a fight. The 11-year deal is schedule to end in 2013, but the NCAA has an opt out option after this year. The deal is backloaded -- over $2 Billion on the pact is due over the next three years -- but some folks in the NCAA think expanding the tournament to 96 teams would increase the content and make it more appealing to broadcast and cable entities.

The idea would be to give the top 32 teams a first round bye, and have an a week of essentially elimination contests.

Currently, the NCAA collects 90% of its yearly revenue from the CBS contract for March Madness.

Leaving $2 Billion on the table is a gamble, and the NCAA will take time to study the situation, at least through the coming summer. But they look at their BCS brethren who increased their rights fees by 50% with the move to cable and they dream of doing the same.

The timing is right to for ESPN to make a move. Comcast, the largest cable provider in the country, just purchased NBC Universal and has made noises of using various cable outlets to form a new sports channel to challenge ESPN for major events. However, legal issues are expected to keep the purchase from going through for almost a year, which will give ESPN time to cement whatever deal they can strike with the NCAA.

CBS, which acquired digital rights to NCAA events with its $6 Billion deal, has used that leverage to make the March Madness profitable. They no doubt will be more than willing to make the NCAA an offer they hope they can't refuse.