ABC, ESPN Join Fox, Turner in Nascar Television Deal
Walt Disney Co.'s ABC and ESPN bought the television rights to the second half of Nascar's Nextel Cup season, joining units from News Corp. (NWSA) and Time Warner Inc. in a $4.5 billion package to carry a sport with U.S. audiences second only to the National Football League.
ABC and ESPN will replace General Electric Co. (GE)'s NBC under new eight-year agreements beginning in 2007, while Fox and Turner Sports agreed to continue airing the stock car races through 2014.
Under the new agreements, average annual rights fees will increase 40 percent to $560 million a year, according to a news release from International Speedway Corp. (ISCA), the race-track operator controlled by Nascar's founding France family.
``This is further proof that Nascar is much more than a regional sport,'' Fox Sports President Ed Goren said in an interview.
ESPN and ABC get the rights to the final 17 Nextel Cup stock car races each season. The final 10 races that comprise the Chase for the Nextel Cup, which determines the series' champion, will be broadcast on ABC. Nascar's second-tier Busch Series will be shown on ABC, ESPN and ESPN2.
``Nascar's Chase for the Cup is an absolute crown jewel in the sports world, and a major asset for our company overall, and ABC Sports in particular,'' George Bodenheimer, president of Disney's two sports units, said on a conference call.
Fox will show the first 13 races every year, including the circuit's most popular event, the Daytona 500. Fox and NBC had alternated showing the Daytona 500 under the previous agreement.
Turner's TNT network will show six races in June and July.
The NFL's contracts with NBC, Fox, CBS and ESPN from 2006-11 are worth $3 billion per year; the National Basketball Association's contract with ABC, ESPN and TNT is worth $766.5 million a year through 2007-08; and Major League Baseball's new agreement with ESPN is for $296 million a year through 2013. Baseball's agreement with Fox, which expires after 2006, is worth $416.7 million a year.
Nascar's current deals are four times the previous contracts with ABC, ESPN, Viacom Inc.'s CBS and Turner's TBS.
``The escalation of sports rights continues to be alarming, but it's clear the conglomerates that own networks wouldn't spend that much if they didn't foresee profits as a whole,'' former ABC Sports executive Jim Spence said.
This is the fourth time NBC has let a sport go. In 1998, it lost NFL rights to CBS. It walked away from its portion of the baseball contract in 2000, refusing to match a bid from Fox, and left the NBA to ABC, ESPN and Turner Sports in 2002.
``We congratulate Nascar, and are looking forward to the Daytona 500 in the middle of this February's Olympics,'' NBC Sports spokesman Mike McCarley said in a telephone interview. NBC holds U.S. television rights to the Olympics through 2012.
Marc Ganis, president of Chicago-based Sportscorp Ltd., said in a telephone interview that NBC has become increasingly cost-conscious with sports.
``This is another example of NBC's focus on bottom-line results in their sports programming,'' Ganis said.
Nascar ratings rose 3 1/2 percent to 5.8 in this season, while the season-opening Daytona 500 drew 10.9 percent of viewers on Fox this year, tying the 2002 race for the best rating ever. The Chase for the Nextel Cup, a 10-race series that determines the champion, averaged a 4.7 rating this year, 2 percent higher than 2004.
NFL ratings for 2004 were the only national regular-season network viewer numbers higher than Nascar's 5.6 last year, at 9.2 percent of U.S. television homes. There are four weeks left in this year's NFL season.
The Nextel Cup, Nascar's top series, has races in each of the top 10 U.S. media markets except New York. Since 1997, Nascar has added races in Los Angeles, Chicago, Dallas, Miami, Las Vegas and San Francisco.
Nascar received a boost six years ago by convincing track owners to relinquish the right to negotiate their own television contracts in favor of one for the series.
That brought a six-year, $1.2 billion deal with NBC and Turner, and an eight-year, $1.6 billion agreement with Fox, which included two option years. Those deals also made it easier for fans to find televised Nascar events week to week.
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