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NEAL PILSON LEAVES CBS TO START MEDIA CONSULTING FIRM
Published June 2, 1995
Neal Pilson, former President of CBS Sports, has announced the formation of his own sports television marketing and consulting company, Pilson Communications. Since '94, Pilson has served as Senior VP CBS/Broadcast Group. Pilson spoke with THE SPORTS BUSINESS DAILY earlier this week on his venture, as well as the state of network sports and the future of the industry. Excerpts follow: THE DAILY: What was your primary motivation for starting Pilson Communications? PILSON: I'm taking the expertise and experience that I've developed over 25 years in television, and 19 of those at CBS Sports, to offer my consulting, advisory, packaging, marketing, media skills to companies, people, organizations in the sports television business. People who want to get in the business, people who are already in the business but want to improve their situation, people who need advice regarding television, international clients who might want guidance in terms of the American marketplace. Sports television has changed dramatically in the years that I've been involved with the business. When I joined in 1976, there were really only three potential purchasers -- the three networks. Now, there are dozens of possibilities for a sports event or franchise. And while the marketplace has gotten more accessible in the sense that there are many more companies and sports channels that will televise events, it has gotten much more complex and much more competitive. THE DAILY: Who will you be representing? PILSON: They could be companies looking for sports, or sports looking for companies, or events looking for coverage. I already have several clients and each one is totally different from the other. ... I will be doing all the television work for NASCAR, and also the International Speedway Corporation, which actually controls the television rights to events like the Daytona 500, the Pepsi 400, the Talladega 500, The Bud at The Glen, the Darlington race. THE DAILY: What are some things to look for in terms of new companies getting into sports, or new approaches to sports on network TV? PILSON: Look at the success of the Brickyard 400 in terms of generating official sponsors. The official sponsors operate in connection with the event itself and the television broadcast -- all controlled by the Indianapolis Speedway. They literally bought the time on the networks and sold the advertising and sponsorships directly. I think there is a very strong marketplace out there for sports in general, and for auto racing in particular. THE DAILY: Is that arrangement -- a sport property controlling the broadcast -- a trend that will continue? PILSON: It will continue. There are some very sophisticated marketing executives who now are involved with sports directly. They're not at the agencies, they're not at the networks -- they're with the sports events. And certainly some of the major sports franchises have the type of expertise and confidence to get into that business. ... But while I think it is a trend that will continue, it is a trend that does demand a high level of sophistication. What you're really doing is shifting the risk. Instead of taking a rights fee and letting the network worry about the sales side, you're controlling the sales and paying the network for its air time. It's a high reward, high risk strategy. So I don't see it becoming a widespread phenomenon, but very strong events with very good, direct relationships with advertisers and sponsors will be looking at that route. THE DAILY: Is the explosion of outlets carrying sports the biggest change in sports TV since you've started? PILSON: The change has been kind of cumulative. Each change has created more change. With the accessibility now of so much channel capacity, the ability to get on so many different channels, and the advent of so many new sports themselves -- it has been a sea change. And what has happened is that the advertising marketplace has changed. Advertisers now see sports in a different light than they did 20 years ago. Then, they bought inventory, they simply bought commercial time. Now, they're trying to embrace the sport with signage and billboards and sponsorship. The net effect is that sports today is a much more important part of the broadcast medium than it was 20 years ago. THE DAILY: With Rupert Murdoch's presence and CBS looking to get more active, is there more that networks can do to protect the sports properties that they have? PILSON: What a network can do, and in many cases they are doing, is to seek to negotiate their deals before the end of the existing term. NBC did that with the NBA, CBS did it with the NCAA basketball tournament. Basically, in return for not going into the marketplace, the licensor agrees to make a deal but expects the network to step up to the anticipated level of that marketplace. So, the network gets to keep the event, but the licensor -- in return for foregoing to opportunity to go into an auction -- expects to, and generally gets, a much higher license fee. THE DAILY: Should we expect more of that? PILSON: The networks are trying to protect their franchises, and their experience seems to be that if they let it get out into the marketplace it usually gets more expensive to renew it. So, you will see as a trend the networks trying to negotiate before the expiration of their deals. At that point, they can offer something to their contracting parties that no one else can -- an increase in the current arrangement in return for the extended term. THE DAILY: How would new ownership at CBS affect the way that network covers sports? PILSON: A lot depends on where CBS is in terms of its competitive position at the time that any sports property comes up for negotiation. For example, if -- by the time the NFL rights come up for renewal -- CBS by that point is the No. 1 network, it will have returned to No. 1 prominence without the NFL. And my guess is that it would certainly impact its view of the importance of the NFL to its overall schedule. On the other hand, if CBS is still No. 3, its position in respect to the NFL or perhaps some other major sports property might be different. And that would probably be true whether it's new ownership or old ownership. THE DAILY: What are your thoughts on the role of the networks in the information highway? You speak of offering to help clients find their way through the maze of media opportunities. Is multimedia on that map as well? PILSON: Yes, I think so. You see the networks seeking to provide the widest possible linkage, service and exposure for their sponsors and advertisers and their business. So, certainly down the road we're going to see the networks broadening their reach any way possible. That doesn't mean the networks are struggling to survive. I think the networks are really ahead of the curve now. ... Each is only one of four entities that reach into every American home.