Hawaii gets new TV deal
An agreement is reached on a six-year deal with KHNL/KFVE and Oceanic for $14.52M
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The University of Hawaii yesterday agreed in principle on a new, six-year sports television contract with current partners KHNL/KFVE and Oceanic Time Warner Cable.
The deal guarantees UH upwards of $14.52 million ($2.3 million per year) if certain financial benchmarks are passed by the end of three years. The previous three-year contract netted UH a base of $1.75 million per year, before additional revenue from Oceanic's Pay-Per-View service.
Athletic director Jim Donovan was pleased with the deal, saying "I'd like to extend my warm mahalo to Norm Santos and Nate Smith (of Oceanic) and John Fink (of KFVE) for their support in stepping up again. I asked them along the way to make sure we protect the product."
KFVE, the 25-year rights-holder for UH sports, remains as the primary broadcaster with about 85 percent of televised events in the next academic year.
Oceanic will again shoulder Pay-Per-View revolving around a UH football package, but now takes on more than half of the payment in the contract with the option of new mediums (Webcasting, podcasting) in the future.
A new feature of the contract is an optional road Pay-Per-View package for UH football season ticket holders, which will save them 50 percent on the cost of three or four locally-televised road games -- a value estimated at $75. Having to pay full price for road games was a sticking point for some fans.
A final, signed contract isn't expected by Donovan until July at the earliest.
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With an eye on both the old and the new, the University of Hawaii yesterday announced a new, six-year sports TV contract agreement in principle with existing partners KHNL/KFVE and Oceanic Time Warner Cable.
The new contract, which athletic director Jim Donovan expects to be officially signed within two months, nets UH a minimum of $14.52 million ($2.3 million per year) through 2014 if certain benchmarks are met after the third year.
The current three-year deal, worth a base of $1.75 million per year for UH, expires on June 30.
KFVE vice president and general manager John Fink, and Oceanic president Nate Smith were on hand to announce the deal with Donovan at the Stan Sheriff Center.
"I asked them to protect the product, because we've had some tremendous success here at UH athletics," Donovan said. "It all starts with exposure and revenue, and in both cases they stepped up to the plate and helped us."
KFVE, the 25-year rights-holder, will once again carry the bulk of televised events with around 100 for the next academic year.
The upcoming Oceanic pay-per-view package revolving around UH football will likely carry a similar amount of events as last year's 19, although the pricing has not yet been set, the parties said. Last year pay-per-view cost $330 for returning Oahu customers and $380 for new ones.
A new feature of the PPV plan is a discount for football season-ticket holders. If they apply for the Oceanic pay-per-view package by July 18, they'll receive a special package of 50 percent off the expected three or four locally televised road football games, a savings of about $75.
For Fink, securing KFVE's place as the rights-holder once again was about giving UH's fan base what it was accustomed to.
"The viewer will notice no changes," he said. "I think the most important thing for us is the pay-per-view concept and package remains as it is. At the end of the day, it's the same old, same old, but that's a positive, as opposed to often when we lament that things don't change.
"I think there's something to be said for continuity and as it's been said by UH and us, the patient's not sick -- let's not dissect him," Fink added.
Oceanic, in contrast, intends to apply new mediums to its experience in the coming years -- interactive TV input during games, Webcasting, and podcasting.
In the new contract, Oceanic absorbs a greater share than KFVE of the front-loaded amount due to UH each year, a switch from their previous role. Essentially, KFVE pays less, but also stands to gain less from pay-per-view and other revenue.
"At the end of the day it's probably going to be about even (as a positive thing for KFVE)," Fink said.
Smith said Oceanic is content with its role in the contract and will look to grow based around its pay-per-view distribution over the last six years.
"I think the Hawaii audience has gotten very comfortable with the traditional broadcast (on KFVE)," Smith said. "And you're always at risk on change, and I'd rather evolve. If we took over the broadcast, did new announcers and a new style of direction, all of that, you're at risk of alienating some of your existing audience.
"Now we can evolve, keep the existing audience and start building a new one. I think it's a much healthier way to look at that in terms of long-term."
He said Oceanic has started experimenting with several new features, but isn't quite ready to announce anything specific yet.
When asked about the prospects for high-definition broadcasts, both Fink and Smith said it's something to be considered. The possibility for it was left open in the new contract.
"I'd say it's within the next couple years," Smith said. "Which year and when is a little difficult to predict, but it's coming."
Donovan was realistic about the limitations the lucrative contract will have on the athletic department's history of operating in the red. At the start of the fiscal year, the department had a cumulative deficit of somewhere between $4.5 million and $4.9 million.
"Certainly we are facing some financial challenges here in the athletic department on an annual basis, and we're working to try and knock that down and get our arms around it, go forward without increasing our overall, carryover deficit," Donovan said. "It won't solve our budget problems, but it's a step in the right direction."
The university will also receive $350,000 in advertising time on KFVE/KHNL and Oceanic's channels.
Donovan reiterated that getting people to events in person was still a top priority, and mentioned an upcoming family ticket package deal thought up by associate athletic director John McNamara.
The official contract is expected to be signed in July, Donovan said.