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SBJ/November 26 - December 2, 2001/Marketingsponsorship
Did Fox really draw the line over $50K a week?
Published November 26, 2001
The virtual first-down line is back in national Fox NFL broadcasts, but can anyone believe that Fox dropped it earlier in the season to save money?
Even at a time when Fox is telling some of its more senior execs to rein in their monthly travel and entertainment expenses, it's hard to believe Fox's original explanation that it cut the first-down marker to save cash.
Fox says it cost $50,000 weekly to provide fans with that enhancement.
Let's see, Fox pays the NFL roughly $3 million each week for rights to broadcast its games ($4.5 billion for its eight-year NFC package), but it's worried about saving 50 grand? And instead of cutting telecast expenses broadly, Fox chose to eliminate the one broadcast feature that would produce an outcry from viewers.
What really was going on was Fox's version of the end-around play. The NFL had banned all sponsored enhancements — such as the Budweiser starting lineup — as part of its last broadcast agreement. NFL insiders say Fox has been pressuring the league to put enhancements back in since the day the old deal expired.
Fox senior vice president of sports ad sales Jim Burnette "is the most enhancement-happy salesman in the business," said one of his cable competitors, "and the NFL took away his toys."
We're in the most lackluster ad sales climate in a decade. When you consider the precipitous heights from which the market fell, it seems even worse. Is it too Machiavellian to suggest that in a year Fox has the Super Bowl, hijacking the first-down line was just part of the pressure it is applying in an effort to allow enhancements on the most expensive piece of real estate on TV?
Given the dispute Fox and Major League Baseball got into surrounding virtual advertising during the World Series, maybe it's better that the NFL holds firm. Fox wanted to sell virtual ads to non-MLB corporate sponsors. MLB stood firm. Things got messy and the words "breach of contract" were being batted around.
Fox eventually relented, and instead of cashing in on advertising that produced direct revenue, it settled for virtual ads shouting "The Tick is coming!" and telling us to watch "Ally McBeal" right behind home plate during the best World Series of the last 50 years.
Still, anyone who thinks the NFL is definitively anti-enhancement is ignoring the paid signage from Nike, Reebok and Adidas that have been on its uniforms for the last decade or so. Don't expect the NFL to allow Fox virtual ads, or any kind of in-game enhancements, on Super Bowl XXXVI, regardless of the frozen ad climate. The league, however, doesn't seem unalterably opposed. It's Fox and CBS (which has AFC broadcast rights) that are at polar extremes.
"The simple equation is, the more money we can bring in, the more our [NFL] rights are worth," said FSN President Tracy Dolgin. "We'd like to do enhancements on the NFL, but I'm not sure CBS feels the same way."
Surely, everyone at Fox knows exactly how CBS feels about the enhancements that are bread and butter for Fox in every other sport.
"If we thought adding enhancements on the NFL would increase revenues, we'd be all for it," said CBS Sports President Sean McManus. "But we don't, and until we do, there is no reason to support it."
It's half-full versus half-empty. Fox sees the down market as a reason to push even harder for NFL enhancements.
"Anything we can do in this environment to make a sale is better," said Dolgin.
"The worst time to sell them is in a down marketplace," counters McManus. "When you try to get a real premium for them later, you've established a price that's way too low."
McManus insists that the premiums CBS gets for entitlements on its halftime and postgame shows would vanish if in-game enhancements were permitted.
The biggest story in advertising during the next decade will be the incursion of advertising into programming space. We may not cycle all the way back to TV shows like "The Camel Cavalcade of News," but we'll come close. Reality shows (notably CBS' "Survivor") were some of the first recently to allow blatant product placement.
Can televised sports, as their own form of reality show, be far behind?
Terry Lefton can be reached at email@example.com.