10/07/2010 1:30PM

Churchill Downs, NBC extend Kentucky Derby deal


NBC Sports has reached a five-year deal with Churchill Downs Inc. to broadcast the Kentucky Derby through 2015, the two companies announced on Thursday.

The deal is worth approximately $25 million, or $5 million a year, according to officials with knowledge of the agreement, an amount that is less, per year, than NBC paid for the broadcast rights to the Derby in a previous five-year deal that expired this year.

The deal also includes the broadcast rights to the Kentucky Oaks, which will be shown on one of NBC’s cable channels. The Oaks is held the Friday before the Derby, and in the past two years, the race has been broadcast on NBC’s Bravo cable channel.

Under a previous five-year, $44 million deal with NBC – which also included the broadcast rights to the second race in the Triple Crown, the Preakness Stakes – Churchill received approximately $30 million, or $6 million a year, according to racing officials with knowledge of the contract. The host of the Preakness, Pimlico Race Course, which is owned by MI Developments, received the remainder.

The previous agreement was reached before an overall decline in the value of sports-broadcast rights tied to a recession-induced contraction in advertising spending, accounting for the lower per-year rights fee, according to officials. In addition, many networks, including NBC, have lost money on several high-profile rights deals over the past four years, including the Olympics, indicating that the networks had overvalued many of the rights.

NBC has broadcast the Derby since 2001. From 2001 to 2005, the network broadcast all three races in the Triple Crown, but after that contract expired, the New York Racing Association, which runs the third race, the Belmont Stakes, reached a separate five-year broadcast agreement with ABC. That agreement also expired this year.

According to NBC, more people watched the 2010 Derby broadcast than any Derby since 1989, with 16.5 million viewers. In 2010, both Churchill and NBC attempted to position the broadcast to attract more women viewers and non-racing fans by focusing on Kentucky culture and the celebrities that typically attend the Derby.

“We’re excited to extend our relationship with the Derby and our business partnership with Churchill Downs, a partnership that is one of the finest examples of two organizations coming together to build an event,” said Dick Ebersol, the chairman of NBC Universal Sports and Olympics, in a statement.

Bidding for the rights started this summer. According to the officials, Fox had sought the rights to the race for the first time, but NBC’s proposal won out.