NFL Close to Signing Its Own Big 3

Baldwin Louie — Thu, 28 Jun 2001 15:00:00 -0700

EXCLUSIVE The potent media troika of America Online, Viacom and CBS/SportsLine is close to a five-year, $110 million deal for the NFL's Internet rights that would certainly be the richest Web sports rights deal ever.

According to sources involved in the negotiations, the deal is valued at $325 million, including the value of cross-promotion and accounting for the cost of Web hosting and production. SportsLine would wrest the Internet rights for America's most popular sport from ESPN.com, whose three-year deal with the National Football League expired in May. AOL and SportsLine are putting up the cash for the deal, those sources said, and AOL and Viacom would work together to massively promote it. How the normally combative media giants will cooperate to pull the deal off remains to be seen.

SportsLine, the No. 2 sports site behind ESPN.com, would produce, host and sell advertising for NFL.com, another high-traffic destination that SportsLine would make its de facto NFL section. Rights to the heavily trafficked and highly profitable Superbowl.com would also go to SportsLine.

The deal has yet to be signed, and representatives for both the NFL and SportsLine declined to comment, but ESPN's five-day right of first refusal has expired. If the pending deal sees fruition, it would bring an end to both the protracted, high-profile chase for the NFL's Internet rights and the heated negotiations that pitted the two powerful and often intractable brands of AOL and the NFL against each other. Viacom was brought to the table through CBS's 20 percent stake in SportsLine, and AOL gets much of its sports content through a distribution agreement with SportsLine.

The massive price tag of the proposed deal stands in stark contrast to many recent sports Internet deals, including Wednesday's MSN/MSNBC deal for Internet rights to the 2002 Winter Olympics, for which the Microsoft sites paid nothing. In addition to the cash for the Internet rights to the NFL, the league would get hundreds of millions from cross-promotion on AOL and possibly on other AOL Time Warner properties. Viacom is also expected to promote NFL.com across its family of media brands.

Scoring an agreement with Viacom and AOL would give the NFL what it wanted all along: one partner that can promote the site through its NFL broadcast rights in Viacom and another with considerable Internet and promotional expertise in AOL. AOL, for its part, would get a limited window during which to show weekly highlights of NFL games - this would help it build traffic and reduce churn. The NFL insisted on securing all other video rights for itself, and that was one reason ESPN walked away from the deal. Under the terms of the current deal being proposed, the NFL reserves the right to walk away in two years. The league has similar rights in its broadcasting agreements with Fox, ESPN, ABC and CBS.

ESPN, which has the highest traffic among sports Web sites, apparently could afford to walk away from its incumbency, particularly since its parent, Disney, is in a newfound state of frugality. For SportsLine, whose stock recently has hit historic lows, the NFL deal may be its best and last hope to attain a top spot.

"It's their Hail Mary,'' said one party familiar with the deal.

Indeed, no sports site has managed to turn a profit yet. Casualties from this year alone include Quokka, Broadband Sports, Rivals and MVP.com, the latter of which was backed by sports greats John Elway, Wayne Gretzky and Michael Jordan.

TOP SPORT SITES IN MAY 2001
Sites - Web Only
Rank	Site	Unique Visitors Home/Work (in 1,000s)
1	ESPN1	5,277
2	SPORTSLINE.COM SITES1	3,728
3	MLB.COM	3,510
4	CNNSI.COM1	2,302
5	NASCAR.COM	1,997
6	NBA.COM	1,802
7	NFL INTERNET GROUP1	1,640
8	FANSONLY.COM	1,296
9	SPORTINGNEWS.COM	971
10	PGATOUR.COM	792
11	FOXSPORTS.COM	696
12	NHL NETWORK THE1	653
13	JACKPOTSPORTS.COM	640
14	GORP.COM	609
15	ETEAMZ.COM	584
16	WWFDIVAS.COM	574
17	RIVALS.COM	544
18	SANDBOX.COM	488
19	THESPORTSAUTHORITY.COM	483
20	WWFJUDGMENTDAY.COM	367
21	SIKIDS.COM	356
22	ALLIANCESPORTS.COM	353
23	WNBA.COM	324
24	ACTIVE.COM	285
25	GOLFONLINE.COM	281
26	CHURCHILLDOWNS.COM	265
27	MAJORLEAGUEBASEBALL.COM	242
28	NHRA.COM	236
29	WWFSUPERSTARS.COM	235
30	BASEBALLAMERICA.COM	224
31	THATSRACIN.COM	223
32	1WRESTLING.COM	221
Total Sports Universe2		21282.03
Proprietary Online
Site		Unique Visitors Home/Work (in 1,000s)
AOL Sports Channel		10633.23
Source: Jupiter Media Metrix. 1Represents an aggregation of commonly-owned and/or branded domain names. 2Category Universe does not include AOL Sports Channel. Unique Visitors: The estimated number of total users who visited the reported Web site or online property at least once in the given month. All unique visitors are unduplicated (only counted once). Sample Size: More than 60,000 individuals throughout the U.S. participate in the Media Metrix sample.

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NFL Close to Signing Its Own Big 3