April 22, 2010 6:58 PM
Three Firms Score with $10.8 Billion NCAA Basketball Deal
Posted by Brian Baxter
On the same night the NFL prepared to take its college draft into primetime television for the first time, the NCAA swooped in and stole some of the league's thunder, announcing a $10.8 billion broadcast and media rights deal for its annual men's college basketball tournament.
CBS Sports and Turner Broadcasting were the winning bidders for the rights to televise the tournament, better known to millions nationwide as March Madness. The NCAA's men's basketball committee also unanimously approved a proposal to expand the tournament to 68 teams in men's Division I college basketball.
Michael Lubowitz, the cochair of the private equity and M&A group at Weil, Gotshal & Manges in New York, led a team from the firm advising CBS Sports on the deal. The firm has been longtime outside counsel to the network's parent company, CBS Corporation.
Lubowitz, who says he didn't get to go to any tournament games, is no stranger to high-profile TV deals. He previously advised CBS on its acquisition of CNET in 2008 and CSTV in 2005. Last year Lubowitz was part of the legal team that advised DirecTV on its merger with Liberty Media's entertainment unit, also advising the company and its founder John Malone on a recently announced recapitalization plan. Lubowitz says today's NCAA deal came together quickly after the tournament concluded earlier this month.
"Discussions had been taking place for several months, but things really heated up over the last couple of weeks, especially when the tournament was under way," he says. "Both sides wanted to get something done right away."
Charlotte-based Robinson, Bradshaw & Hinson advised the NCAA on the deal. Sports and licensing partner S. Graham Robinson, corporate partner Robert Fuller, and entertainment and M&A partner Steven Newmark headed up the team from the firm, which has represented the NCAA in the past. (Robinson did not immediately respond to a request for comment.)
The current deal dwarfs the last contract signed by the NCAA with CBS in 1999--an 11-year, $6 billion agreement. Ratings for the year-end tournament have risen dramatically over the past decade.
Broadcast rights are critically important to the NCAA's bottom line--more than 95 percent of the governing body's revenue comes from broadcast rights to the tournament. The NCAA returns a large portion of the revenue to its member institutions, which, in turn, retain their own advisers to try and negotiate additional rights fees.
The Big East collegiate athletic conference recently hired former NFL commissioner Paul Tagliabue, now of counsel with Covington & Burling, to explore TV and media opportunities. It was Covington partners Bruce Wilson, Douglas Gibson, and Peter Zern, who specialize in sports and media transactions, that Turner tapped to lead its legal team on the college basketball contract. (Last year Zern advised the NFL on the sale of the Miami Dolphins.)
Under the terms of the deal, Turner's TBS and TNT networks will have the rights to televise first- and second-round games along with CBS beginning in 2011. CBS and Turner will split coverage of the regional semifinals, while CBS retains sole ownership of the rest of the monthlong event, including the championship game.
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