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Changing channels?

  • PHOTO ILLUSTRATION BY BRYANT FUKUTOMI / BFUKUTOMI@STARADVERTISER.COM
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For a generation, University of Hawaii sports devotees have enjoyed the luxury of choice.

Head out to the stadium or arena for the experiential value of watching events unfold in person or catch the action via the nation’s most comprehensive local television package.

And while the television element has seen subtle changes over that span — KIKU became KHNL, and the games eventually settled in at KFVE — UH’s spot in the lineup has remained relatively stable for the past 27 years.

It’s still too early to start filling out change-of-address cards, but whether "The Home Team" remains UH’s television home beyond the upcoming athletic year figures to come down to a decision by the state’s leading cable provider.

When UH’s local television rights were awarded in 2008, Oceanic Time Warner Cable supplanted KHNL/KFVE as the primary contractor, taking on the bulk of a $2.3 million annual payout to the athletic department.

Included in the six-year contract is a three-year agreement that allowed KFVE to retain broadcast rights to UH events. KFVE is entering the final year of that period, referred to in the contract as the "transition term."

VIEWERS’ CHOICE

Here are the best sellers for pay-per-view games.

 

Highest single game
(season and individual)
Fresno State, 2007 13,986
New Mexico St., 2007 12,234
N. Colorado, 2007 12,170
Purdue, 2006 11,569
San Diego State, 2002 11,269

 

Highest single game
(Individual)
Fresno State, 2007 5,149
San Diego State, 2002 4,485
Purdue, 2006 4,113

 

Women’s Volleyball
2005 1,552
2006 1,308
2007 1,070
2008 441
2009 854

 

Mens Basketball
2005 1,083
2006 528
2007 142
2008 142
2009 123

 

Season Package sales
2002 6,784
2003 8,897
2004 8,997
2005 7,809
2006 7,456
2007 8,837
2008 8,318
2009 7,347

 

Individual buys average per game
2002 3,052
2003 1,614
2004 1,214.9
2005 1,007.7
2006 2,185
2007 3,040.5
2008 1,727.3
2009 890.6

 

Commercial purchases
(restaurants, bars, etc.)
2002 80
2003 118
2004 117
2005 143
2006 156
2007 205
2008 244
2009 233

 

Beyond that, Oceanic assumes the production of the events starting in 2011-12.

"We’re excited about that opportunity, but at the same time I’m a little bit nervous because there’s a standard that’s been set and there’s an expectation," said Norman Santos, Oceanic’s vice president for operations. "So I want to make sure we not only meet but maybe exceed the expectations of the viewing audience.

"As a producer it gives us the ability to gather ideas and create something new. I think that’s the challenge. … I think it’s an evolution and not a revolution."

The contract includes a window for negotiations between Oceanic and KFVE (Oct. 1 to Feb. 28) toward possibly extending KFVE’s role as a subcontractor for the final three years of the pact, which runs through 2014.

"We hope we can continue to be involved in the production going forward," KFVE general manager John Fink said. "We have a good partnership with Oceanic and the university and those are discussions we’ll have later on this year."

UH athletic director Jim Donovan said the ultimate decisions would be left to Oceanic — which has televised high school games for close to 20 years and also airs small-college events — and KFVE.

"(KFVE’s role) could be extended or not extended, but that’s up to the primary contractor, which is Oceanic Time Warner," Donovan said.

"When we signed the contract we knew it was a possibility. There were several possibilities, they could after three years … produce it themselves, they could continue to work with KFVE or they could look to some other company to produce it."

The parties are still finalizing the pay-per-view package for the upcoming season, and Oceanic will begin refining its plans for 2011 soon after.

"I don’t think we’ve ruled anything out yet," Santos said. "There’s an opportunity for a mix of over-the-air and cable broadcasts. What we’re planning to do is get into more substantive discussions once we got this season under way.

"It’s a big task, but the first task is to be sure we’re all on the same page as far as the look and feel."

 

For UH, the local television deal has offered exposure — often providing the community an introduction to the various teams — while growing increasingly lucrative for the school.

Fink said KHNL/KFVE annually produces 115-120 events per year and covered eight sports this past year: football, baseball, men’s and women’s basketball, men’s and women’s volleyball, soccer and softball.

"TV is an amplifier," Donovan said. "When things are going good a lot more people are going to come out to see them in person. When teams aren’t doing well, people will stay home and watch them on TV. That’s typically what we’ve seen."

KHNL/KFVE began televising UH sports in 1984, and fended off a challenge from Oceanic in 2005, increasing its annual payout from $700,000 to $1.75 million over a three-year deal that expired in 2008.

UH, Oceanic and KFVE are in the second year of a contract in which Oceanic pays UH $1.8 million annually with KFVE contributing $500,000.

Starting next year, Oceanic takes on the entire $2.3 million payout plus production costs, which Santos estimated at "north of $10,000" per game.

"Pay-per-view certainly is still driving the bus, but advertising has to pay for the production and those games aren’t cheap," Santos said.

Oceanic implemented new technology in its high school sports coverage and UH pay-per-view events, adding high definition and interactive features in recent years.

Santos said the flexibility of cable could allow for more pre- and post-game coverage, greater access to replays of games, perhaps even a station dedicated to UH down the line.

Along with the television contract, UH receives $442,666 annually in a three-year radio deal with KKEA-1420 (which also expires next year). The new contracts contributed to UH breaking the $3 million mark in media royalties in the 2009 fiscal year.

While they competed for the rights in 2005, KFVE and Oceanic have partnered to provide live pay-per-view coverage of UH football since 2002, adding limited women’s volleyball and men’s basketball games in 2005, with KFVE handling production and Oceanic in charge of distribution.

The current deal provides UH a steady revenue stream, while Oceanic keeps a percentage of pay-per-view sales. Ten percent of PPV goes to UH for revenues between $2.3 million and $2.7 million. UH receives 20 percent if revenues top $2.7 million.

According to figures provided by UH, the arrangement contributed about $2.5 million to the athletic department in 2009 and about $2.47 million in the 2010 fiscal year, which ended June 30.

The contract is open to renegotiation if UH hasn’t received a cumulative three-year total of $7.5 million from its TV partners by this time next year, but the payments so far have them on track to hit that mark.

"At the end of the day, we’re trying to make it work for UH, for the sponsors and for the fans, and right now the formula seems to be working quite well," Fink said.

 

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