SBD/2/Sports Industrialists

NEAL PILSON LEAVES CBS TO START MEDIA CONSULTING FIRM

     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.
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