In 1999, CBS signed an 11-year deal for the rights to NCAA’s college basketball March Madness tournament for a whopping $6 billion, or an annual average $545 million. CBS had the foresight to lock in new media rights: CBS is announcing that year-over-year online traffic is up 65% and first-day traffic reached 2.7M uniques, but still…
Apparently, the NCAA can opt out in 2010. That’s one year from now. In 1999, CBS’ stock traded double digits, high double digits. Today? $4. Maybe $5 on a good day. That’s not a shot at CBS; all media companies are down, some violently from just last fall. It’s not just the media world, of course:
The financial world has changed drastically since the deal was signed on Nov. 18, 1999 (although it did not go into effect until 2003, after a previous deal expired). The Dow Jones industrial average stood at 11,035.70 that day, but it closed Monday at 7,216.97; Citigroup stock was at $56.25 and is now at $2.23; Bank of America has fallen from $65.38 to $6.18; and General Motors from $69.81 to $2.52.
But this begs the question, will CBS be willing to pony up this kind of money? CBS still generates billions in revenues, but its market cap has fallen quite a bit. Of course, the Tiffany network might be looking at avoiding a repeat of what happened with the NFL in the 1990s:
CBS’s $6 billion bid looks overly rich nine-plus years later, but the network was protecting its turf, a lesson it learned when previous management let its N.F.L. rights go to Fox in 1993.
I don’t know who dreads the next 12 months more: CBS or the NCAA.
Am I the only one that thinks that both the NCAA and CBS are nostalgic for the good old days? Probably not. For your fix of old school b-ball, check out some of WatchMojo.com’s NCAA videos.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo Newsletter
