Why is CPS leaving basketball broadcast money on the table?
This year, Chicago Public Schools’ boys basketball teams played more games on national television than any school system in the nation. But despite the broad appeal of Chicago’s teams, other school districts have broadcast deals that bring in far more money. For a school district that’s facing a $1 billion deficit in 2014, it could be a missed opportunity.
Thanks to the star power of Simeon Career Academy’s Jabari Parker, the Duke University-bound senior who’s two games away from a fourth straight state championship, Chicago schools were featured in more than a quarter of the games on ESPN’s high school basketball schedule. In exchange for the rights to air those four games, CPS received a total of $8,000. The district’s only other broadcast income this season was from a $12,000 deal to air six basketball games on WCIU, according to CPS Director of Media Affairs Robyn Ziegler.
But in Los Angeles, the public schools negotiated a comprehensive broadcast agreement that guarantees them $75,000 per year. According to Peter Fitzpatrick, whose Home Team Marketing brokered the L.A. deal, a similar agreement could bring CPS around $150,000 a year.
Niles-based Paragon Marketing Group cut the deal with CPS for the four ESPN games this year. Rashid Ghazi, a partner at Paragon, has organized high school contests for the global cable network since 2002, when he first convinced ESPN to air a regular-season basketball game. That contest featured a 17-year-old LeBron James.
Ever since the LeBron James game, ESPN has focused its high school basketball programming on young stars who are often a year or two away from the NBA. “You read about Jabari Parker, and we want to give fans a chance to see him in action,” says ESPN Senior Director of Programming Dan Margulis.
Although Parker graduates in the spring, CPS will likely draw national attention again next year. Ghazi says Whitney Young junior Jahlil Okafor, the top-rated national recruit on ESPN.com, helps put the school on his top-five list of prospects for next season. “Okafor will go the same way Jabari has gone – in recruiting circles there will be a lot of interest.”
“CPS is always going to have two or three teams that are of national interest,” says Scott Andresen, a sports law attorney whose clients include the Illinois High School Association. “But there’s more money to be made if you pool your rights. They could tell companies, ‘If you want Simeon, you can take all of us.’”
For the broadcast rights to three Simeon road games this season, Paragon paid CPS $1,000 apiece, according to a contract obtained by Grid through a Freedom of Information Act request. But the centerpiece matchup in the Paragon deal, which school board CEO Barbara Byrd-Bennett signed on Jan. 25, was the Jan. 26 game between district arch-rivals Simeon and Whitney M. Young Magnet High School. That contest landed CPS a $5,000 rights fee from Paragon.
There could be larger broadcast opportunities for CPS than that, though. A year ago, Los Angeles’ public schools signed a five-year agreement that grants Time Warner Cable the broadcast rights to all games in the district. Broadcast-fee revenue across the district jumped from less than $5,000 per year to an annual payment of $75,000, with a three-percent bump each year, according to the district’s athletic director, Barbara Fiege, who also says that Fitzpatrick’s Home Team Marketing takes out a 10% commission for negotiating the agreement. “That money goes directly back into the budget that covers all the expenses for our sports program,” says Fiege. “Our schools benefit from that.”
If CPS pursued a similar pooled-rights agreement, Fitzpatrick estimates that the district might be able to strike a deal in the $150,000 range. This isn’t the only time that CPS has squandered an opportunity to parlay its high-profile sports teams into benefits for other students. In February, Grid reported that a Nike contract with Simeon, signed without supervision from the district, gave Nike marketing benefits worth an estimated $1.2 million in exchange for shoes and apparel worth more than $100,000 in retail value. The CPS law office is currently reviewing that contract to determine if it was executed in breach of district policy, according to a spokeswoman.
“We agree that multi-game agreements have the ability to generate more revenue for the District,” writes CPS’ Director of Media Affairs, Robyn Ziegler. “[W]e continue to review all of our contracts and service agreements throughout the district in order to find savings and to increase revenue opportunities so that we have more dollars to invest in student learning.”
According to an ESPN employee who isn’t authorized to publicly discuss financial information, ESPN covers the cost of broadcast production, and doesn’t profit from airing high school games. Paragon does profit from the sale of sideline sponsorships and at least some of the on-air commercials, says Ghazi.
“As a whole, these games are difficult to do. We cover the teams’ travel, meals, hotel accommodations and expenses on road games,” says Ghazi. “We have more requests from schools than we have games on our schedule.”
Parker photo by Patick Gleason