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The Honolulu Advertiser

Posted on: Wednesday, February 9, 2005

TV landscape ripe for changes

ANALYSIS:
UH sports might switch homes; have more pay-per-view

By Ferd Lewis
Advertiser Staff Writer

For 22 years, sister stations KHNL and KFVE have been the popular television home to University of Hawai'i-Manoa sports to the point where KFVE has been branded as the "Home Team."

But with its three-year contract expiring in June and its exclusive renegotiation window set to close Feb. 28, how much longer the state's only Division I-A athletic program will be showcased there is a question that increasingly hangs over the local sports market, as does what changes a new agreement might mean for viewers.

KFVE can still negotiate with UH past Feb. 28, but the school would be open to entertain other proposals at which point Oceanic Time Warner Cable and Emmis Communications could enter the competition. "We're trying to put together something to present to them, hopefully in the next week or so," said John Fink, vice president and general manager of KHNL and KFVE.

Rick Blangiardi, general manager of KHON and KGMB, which are both owned by Emmis, said, "If it (the contract) is open at that point, then we'll definitely take a look at some things."

Oceanic president Nate Smith and vice president for operations Norman Santos were both traveling yesterday and unavailable for comment. But sports and TV industry figures point to Oceanic as the looming "800-pound gorilla" in the market.

"Oceanic doesn't bid; they (can) buy," Blangiardi said. "I think Oceanic buys. I really do. They have the financial capability."

With both its television and radio contracts expiring in coming months, UH is counting on new agreements to help reverse the tide of red ink that has resulted from three consecutive years of million dollar-plus deficits.

"We are in the final year of our current radio, television contracts and, we believe, the environment is healthy as we go forward," athletic director Herman Frazier told the school's Board of Regents in July.

Blangiardi, who pioneered the UH television deal in 1984 as general manager of KIKU, forerunner of KHNL, said heading into a new contract, of UH's rights fee: "expectations are considerably greater than the current situation."

According to UH's five-year revenue plan, it projects to realize at least $2.1 million next fiscal year from those contracts. It received approximately $1.6 million last year, including pay-per-view revenue.

Currently, KFVE pays UH $700,000 a year, down from the $1.3 million the station paid in the final year of its 2002 contract; partly the result of the growing number of games lost to ESPN and others under the Western Athletic Conference contract. Another $685,000 came from UH's share of the PPV partnerships with KFVE and Oceanic. KKEA pays $285,000 for the radio rights.

UH sports has become big business since the (mid-1980s) days, "when people laughed at us when we said we were going to do women's volleyball from Klum Gym," Blangiardi said. "Now, it (Wahine volleyball) draws (viewers) like football."

Fink said Rainbow Wahine volleyball attracts as many as 75,000 viewers, a following surpassed only by road UH football games, which can attract as many as 100,000.

Recently, Oceanic has begun challenging KFVE's hold on UH sports, bidding for and winning the rights to show the Rainbow Warriors basketball games in last year's National Invitation Tournament and some postseason women's volleyball in addition to the "June Jones Show."

"It has been an interesting competition from my point of view between Oceanic and KFVE," Frazier said last year. "I told him (Fink), he's a victim of his own success. He came up with the idea to do pay-per-view and, since then, cable TV has just gone bonkers."

KFVE, which does approximately 100 UH events per year, has drawn praise around the WAC and elsewhere for the quality of its telecasts. "I think we provide the best collegiate sports package in the country," Fink said. "So, I think we'll do what's best for the university, the station and for the fans."

UH's pay-per-view package has averaged approximately 10,000 "buys" per UH football game the past two seasons, according to officials.

Industry sources say for Oceanic — or anybody else — to assume the number of telecasts KFVE is doing would probably take an investment of "somewhere north of $2 million" in personnel and equipment.

With scheduling limited by Fox network programming on KHON and CBS on KGMB, Blangiardi said, "I don't see that we have the platform to do the entire sports program like in 1984."

Industry sources say while KFVE is limited in the straight cash it can offer because its revenue comes from selling advertising, Oceanic could make a larger bid because its revenues primarily come through subscription.

UH sports would also give Oceanic an important local niche at a time when cable is facing increased competition from satellite companies. Oceanic is said to be preparing to debut an all-local sports channel, a sports version of its OC-16.

Bruce Leichtman, president of Leichtman Research Group, a national media consulting firm, said last year's numbers showed the state ranked 51st among the 50 states and District of Columbia with just 3 percent satellite penetration. But sales by DISH Network and DirecTV here are said to be growing.

But Oceanic, even with its 380,000 households, would leave approximately 40,000 without access. KFVE also says it can better promote UH with ties to its network programming.

UH has been proposing some new wrinkles in its TV package and speculation has been that it might limit the number of free telecasts of its sports on weekends. Expanding pay-per-view beyond football might also be an option.

Frazier, through sports information director Lois Manin, declined to comment on possible changes except to say, "options have been discussed and will be considered."

In July, however, Frazier said: "as I look at the future of it, there might be a time when everything won't be free on TV. There will be some selected things you put on free TV."

"I'd like to think we can come up with something reasonable to continue; I'd like to think we're going to do it in conjunction as partners, more partners than a competitive situation," Fink said.

Oceanic and KFVE could also duel for the Hawai'i High School Athletic Association contract. Oceanic assumed the final year of the HHSAA's five-year agreement when the Hawaii Sports Network asked out in July. The current deal expires in June.

Keith Amemiya, executive director of the HHSAA, said the deal was worth $100,000 in cash and trade. He said there has been interest "from a couple parties" about negotiating for the rights.

Meanwhile, UH's radio rights, which have been on 1420 am for 12 years, are expected to wind up there again. KKEA general manager Don Robbs said "discussions are underway" between the station and UH.

Frazier said he hopes an extension will be "finalized within the next three weeks."

Reach Ferd Lewis at flewis@honoluluadvertiser.com or 525-8044.

• • •

UH SPORTS ON KFVE

May 1984 — KIKU (forerunner of KHNL) televises UH baseball series against San Diego State, WAC tournament and NCAA regionals in Arizona.

1985: Then-UH athletic director Stan Sheriff and KHNL general manager Rick Blangiardi agree on "100 (events) for $1 million (rights fee)" deal.

March 1991 — Five-year extension to contract with UH, continuing the broadest television sports package with a university in the United States.

September 1991 — Broadcasts UH football live to the neighbor islands.

January 1994 — UH sports programming moved from KHNL to K5, operated by KHNL.

January 1998 — KFVE-TV and Oceanic Cable partner for live coverage of two UH road basketball games.

July 2002 — $700,000-a-year contract with UH for the three years. Deal includes pay-per-view cable provision for football and weekly UH television show, in addition to 120 events (200, including rebroadcasts) each year.


MONEY MATTERS

What UH gets

2004-2005 contracts

$1.67 million ($700,000 TV, $685,000 pay-per-view, $285,000 radio rights)

What UH expects

UH projections for 2005-2006 contracts

$2.1 million ($1.8 million TV and pay-per-view, $300,000 radio)


WHAT UH FANS WATCH

Approximate average number of viewers, according to KHNL/KFVE

UH FOOTBALL ROAD GAMES
100,000 viewers

WOMEN'S VOLLEYBALL
75,000 viewers

MEN'S BASKETBALL AND VOLLEYBALL
60,000 viewers