SBJ/October 9 - 15, 2006/This Weeks News

ESPN ship sails smoothly under Skipper

The contrast between ESPN’s new and old regimes was never more apparent than at FedEx Field on Sept. 11, the first “Monday Night Football” game of the season.

The network’s former programming chief, Mark Shapiro, was near the center of all the off-field action, mingling with Hollywood star couple Tom Cruise and Katie Holmes in Redskins owner Dan Snyder’s luxury box.

Styles and stars: Shapiro (below, left) with Katie Holmes, and Skipper (above, second from left) with ESPN chief George Bodenheimer (left) and the Edge and Bono of U2.
Much of Shapiro’s reign at ESPN was defined by his Hollywood image. He joined the network as a Los Angeles-based producer, and he injected entertainment elements into ESPN’s all-sports schedule, from a fictional series on poker to a show about Hollywood gossip. Few people at ESPN’s Bristol, Conn., headquarters were surprised when news broke in August that Shapiro and his boss, Snyder, were investing in Cruise’s production company.

John Skipper, ESPN’s current programming boss, hails from the more rumpled world of publishing. On the field before that Monday night game, he hovered on the periphery of a group of ESPN’s top executives, avoiding the spotlight and cutting an almost solitary figure. He was a picture of nervous energy, pacing the field, wringing his hands. He was already making plans to get away, to escape to his hotel room so that he could watch the second half alone, where he could better focus on his network’s most important, and most watched, production.

That likely wouldn’t have been Shapiro’s approach. Brash, opinionated and outspoken, Shapiro had his hand in just about everything ESPN produced. Had he still been in control, the people in the production truck wouldn’t have been surprised to get a call from him, demanding changes on the fly.

Skipper, though, has a reputation for leading more quietly, and for delegating more freely. He made no calls to the production truck that night.

The difference in personality is only the most visible of the changes at ESPN since Shapiro left the company a year ago. But plenty of other adjustments have been made, some obvious, some subtle.

Inside ESPN headquarters, the biggest change is the increased emphasis on non-TV platforms. To the viewing public, the most noticeable change is a move away from the Hollywood-style entertainment programming that Shapiro supported.

Sports executives outside ESPN say they’ve seen changes in the way the network does business. Shapiro made quick decisions. Skipper is more deliberative.

“Ultimately, from a rights holder’s standpoint, it’s more a difference of style than substance,” said Adam Silver, deputy commissioner of the NBA. “They’re both extraordinarily smart and extraordinarily effective as executives. But they come to their results in a very different way.”

Everywhere, all the time
The most tangible difference between the Shapiro and Skipper regimes can be seen in their job descriptions. Shapiro oversaw all programming and production, but Skipper oversees the content on all platforms, from television to radio to magazines to online.

“It makes it easier from the standpoint of a rights holder because we can have one discussion with John about our content across all of their platforms,” Silver said.

It wasn’t until Shapiro left to work for Snyder that ESPN President George Bodenheimer was able to consolidate all of ESPN’s platforms. When Shapiro was overseeing programming and production, Skipper was overseeing ESPN Enterprises, which included new media, the magazine, consumer products and Mobile ESPN. It’s unlikely a consolidation would have worked as smoothly with both of these high-powered executives still in the company.

What the change means is most evident with ESPN’s approach to its first year of “Monday Night Football.” ESPN agreed to pay $1.1 billion a year for Monday night rights, an 83 percent hike over the network’s old Sunday night package, with the intention of spreading those rights across all of its platforms. This all-encompassing approach, which network executives describe as “surround,” includes producing several ESPN TV shows, including “Pardon The Interruption” and “Monday Night Kickoff,” at the site of the Monday night game. In addition, ESPN.com, ESPN Broadband, ESPN360 and ESPN The Magazine all feature significant content around the game.

The “surround” strategy floods the “Monday Night
Football” zone with ESPN properties.
“We do not spend any time worrying about what platforms people get content on,” Skipper said. “We spend no time worrying about cannibalization. We are looking to program all of our platforms with the best possible content.”

The result has been felt in ad sales, where more advertisers want to make multiplatform buys. ESPN would not give specifics, other than to say that advertising revenue has increased.

“Sixty percent of all deals that we do that constitute $2 million or more represent at least one medium other than television,” said Sean Bratches, executive vice president of sales and marketing. “That number is actually higher when you look at the NFL.”

ESPN tried this multiplatform sales approach under Shapiro, said Mike Law of Carat USA. But it took last year’s reorganization for the strategy to take hold. “They’re moving in that direction, and we’re moving in that direction,” Law said. “Now, they’ve set up their sales group to handle all of that stuff.”

It looks like advertisers are interested in the multiplatform approach. “It entices me because the young people we are trying to reach have shifted their entertainment habits,” said Larry Novenstern, executive vice president of Optimedia. “It’s not just about watching the NFL on ESPN anymore. It’s about checking your fantasy football. It’s about interacting with each other. It’s about webcasts. It’s about blogs.”

One of the first deals ESPN cut for “Monday Night Football” was a multiplatform one with Toyota and Lexus, which co-sponsor the halftime show. Toyota and Lexus officials point to ESPN’s online offerings as one on the main reasons they signed on. “We were able to develop a customized buy for each division,” said Peggy Green, Zenith Media president of broadcast and entertainment, during an industry conference last month.

Tom McGovern, director of sports media at Optimum Sports, a unit of OMD, said there is “some buzz” to ESPN’s strategy. “But it comes down to the consumer,” he said. “Is this something consumers are looking for?”

So far, it appears so. For its regular-season opener between the Minnesota Vikings and Washington Redskins, ESPN had its highest rating ever, ESPN The Magazine had its biggest issue in terms of ad sales, and ESPN.com broke traffic records.

Those numbers really represent less a change than a progression. Shapiro guided ESPN to record rating and advertising highs during his tenure, and in the year since Skipper took over all content, each part of his domain is trending up. The networks are reporting record-high viewership, with ESPN up 14 percent, ESPN2 up 7 percent, ESPN Classic up 44 percent and ESPNews up 10 percent. At the same time, ESPN.com has averaged 17.5 million unique users a month for the last 12 months, and has recorded nine of its 16 most viewed days since the start of football season. The magazine’s readership has never been higher, with a circulation of 2.086 million and a guaranteed rate base of 1.9 million. And three ESPN Radio shows now have their largest number of affiliates ever: “Mike & Mike in the Morning” (325), “The Dan Patrick Show” (349), and “The Herd with Colin Cowherd” (330).

“The most logical explanation for why ratings are up is the way we are treating content and the way that George reorganized the group so that all content reports to one organization,” Skipper said. “That allows us to have very efficient and very seamless focus on games and events across all those platforms.”

Turning ideas into action
Neither Shapiro nor Skipper has had carte blanche to spend as much as they wanted to. That power was, and is, reserved for Bodenheimer, who used it, for example, when ESPN agreed to pay $270 million a year for NASCAR. Shapiro was involved in the negotiations before he left, and the deal was struck on Skipper’s watch, but officials with both NASCAR and the NFL say that most of their high-dollar dealing was done with Bodenheimer.

Where the action is: “Cold Pizza” on site for the
Superdome’s reopening on “MNF.”
Both Shapiro and Skipper, though, have been the point men for some of ESPN’s smaller rights deals, leading to observations that Skipper has made programming decisions that many media watchers believe Shapiro would not have made.

This summer, for example, Skipper agreed to pay up to $8 million a year for rights to Major League Soccer and other soccer programming through 2014. Shapiro has long believed that soccer is not going to take hold in the United States.

“The best thing for us is that John’s a fan,” said Doug Quinn, president of Soccer United Marketing Enterprises. “He’s vested. He’s committed.”

Conversely, Skipper opted not to renew a rights deal for the French Open, which caused Michel Grach, media director for the French Tennis Federation, to publicly complain that Shapiro would have made a deal because he likes the sport. ESPN sources say they plan to take “a long, hard look” at whether to retain rights to Wimbledon and the Australian Open, as well.

“I do happen to love soccer,” Skipper said. “But any deal I did had to do with my belief that it was good programming and a smart deal for our company. I understand how to separate my personal interests from having to program the network. I’m happy to report that I probably can put the North Carolina Tar Heels on this year in basketball, but I won’t.”

Skipper’s 12-month tenure has coincided with some tough programming decisions.

After ESPN chose not to renew its NHL relationship under Shapiro, the league defected to OLN. Then ESPN passed on the PGA Tour, which went to The Golf Channel. Despite its heavy investment in Major League Baseball, it has been lukewarm on a package of playoff inventory, which went to Turner. ESPN still is in the running for one League Championship Series, but repeatedly has said it will not overpay for it.

Signing big-ticket deals with the NFL, NASCAR, NBA and MLB seems to have forced ESPN to use more caution when dealing with other sports leagues.

“It would be disingenuous of me to suggest that it didn’t have some implications for our other spending,” Skipper said. “But you haven’t seen us pull back on things that matter to us.”

In addition to all of the spending, growth from another big source of revenue, ESPN’s affiliate fees, has slowed considerably. Cable and satellite operators now pay ESPN about $3 per subscriber per month. According to deals signed in early 2004, ESPN will see a 7 percent license fee hike per year, a sharp drop from contracts in the late 1990s, which guaranteed 20 percent increases. But it still represents a higher increase than any other cable network gets.

Skipper’s tenure hasn’t been completely smooth. Disney brass pulled the plug on one of his pet projects, Mobile ESPN, after just nine months because it was falling far short of subscriber projections. Though Skipper was closely associated with Mobile ESPN, its failure doesn’t seem to have tarnished his reputation inside ESPN.

Reining in entertainment?
Some of ESPN’s old guard may have rolled their eyes when they saw Shapiro with Cruise and Holmes. During his four-year stint in charge of programming, there was dynamic tension between traditionalists, who wanted to focus only on sports, and Shapiro, who wanted to appeal to more than just hard-core sports fans.

“ESPN’s emphasis is coming back to all-sports-all-the-time,” said Pilson Communications President Neal Pilson, who has negotiated with both Shapiro and Skipper. “Mark brought in a lot of entertainment.”

Shapiro, who wouldn’t speak for this story, instituted several changes to ESPN’s signature “SportsCenter,” evolving it from a highlights show to one that brimmed with opinions and analysis.

Shapiro also took a page from Fox News and launched several opinion shows surrounding “SportsCenter,” including “Pardon the Interruption,” “Jim Rome Is Burning” and “Quite Frankly.” As part that blueprint, the show hosts, Tony Kornheiser, Michael Wilbon, Jim Rome and Stephen A. Smith, became stars in their own right.

While “PTI,” “Rome” and “Quite Frankly” have news-talk elements, Shapiro continued to push the envelope with the ESPN Original Entertainment, or EOE, division, introducing entertainment programming such as “Playmakers” and “Tilt,” fictional series that are no longer on the air.

One of Shapiro’s biggest risks was with the series “ESPN Hollywood,” which was seen as ESPN’s answer to “Access Hollywood.” Shapiro pinned part of his reputation on this series by publicly championing it. But the series flopped, and when Skipper pulled the plug on it just three months after Shapiro left, many in the industry predicted that the rest of the EOE department would follow. That speculation increased a couple of months later when ESPN and Skipper were criticized for ceding editorial control to controversial baseball slugger Barry Bonds in the EOE reality series “Bonds on Bonds.”

Skipper, a soccer fan, made a deal with Don
Garber and MLS that goes through 2014.
But Skipper insists he is committed to EOE, pointing to upcoming series “Bronx is Burning,” the film “Ruffian” and a NASCAR documentary as proof that he still supports original entertainment. He says he is even considering an animated series.

Hollywood producer Orly Adelson hasn’t noticed any less commitment to EOE. She is preparing to deliver “Ruffian” to the network, a film that she says both Shapiro and Skipper supported. “There’s still a consistency over there,” she said. “I didn’t feel a big difference.”

Skipper understands why people believe ESPN is not as committed to EOE, since Shapiro was such a vocal supporter of it. But he insists, “We haven’t pulled back. We’ve probably been a little bit less public about it in some ways.”

While he plans to increase the number of EOE hours next year, he admits that he’s less likely to greenlight purely fictional series similar to “Playmakers” and “Tilt.”

“We’re not staying too far from games, athletes and events and the things people talk about in living rooms and bars and dorm rooms and offices,” he said.

A kinder, gentler ESPN
It’s impossible to talk about the two regimes without talking about the personalities of the two executives — personalities that media watchers say inevitably seep through the fabric of the organization.

Skipper’s style is rooted in publishing, not television. He comes from a print background, having been a publisher at Spin and Us magazines. He already was well established when he joined ESPN in June 1997 to launch ESPN The Magazine.

5 ESPN Executives You Should Know

Read about them here.

Conversely, the story of Shapiro’s rise through the ranks of ESPN quickly became part of Bristol (and industry) lore, rivaling Bodenheimer’s much-publicized ascent from the mailroom to the corner office. Shapiro started his ESPN career in 1997 as a 27-year-old coordinating producer in Los Angeles overseeing the Emmy-award winning “SportsCentury” series.

The sports leagues that work with ESPN have noticed a difference, unanimously describing Skipper as more approachable and Shapiro as more decisive.

Some trace it to the executives’ roots, seeing Skipper as the laid-back Southern gentleman and the Chicago-born Shapiro as high-strung, fast-paced and aggressive.

The difference hasn’t gone unnoticed by the company’s partners. “It’s more professional and less antagonistic under Skipper,” said one NFL executive.

“Obviously, dealing with Skipper is easier than dealing with Shapiro,” said an MLB executive, who said the league hasn’t noticed changes in how ESPN covers baseball.

Skipper (right), with former President Bush and Bodenheimer, is the Southern gentleman, more laid back than his predecessor.
It’s no surprise that executives with the leagues make such comments. Shapiro sparred with the NFL over the fictional series “Playmakers,” which portrayed the game in a negative light. He drew flak from the NFL for hiring Rush Limbaugh on “Sunday NFL Countdown.” And Shapiro was the point man during two years of often-difficult negotiations to secure a deal with MLB.

Mike Trager, an industry consultant and the former chairman of Clear Channel Entertainment’s television division, described ESPN as being more serene under Skipper, but said deals are just as hard to cut.

“Shapiro was more confrontational,” Trager said. “Skipper’s more subtle.”

Their attitudes toward dealing with the media are also different. Shapiro was a media darling, featured in reams of stories, and he delighted at tweaking some of his biggest rivals. When NBC and ESPN signed their NFL contracts, he and NBC’s Dick Ebersol traded barbs through the press.

Under Skipper, public bickering doesn’t exist. ESPN executives avoid criticizing other networks or league partners. “I’m not going to go there,” said David Berson, ESPN senior vice president of program planning and development, when asked to comment on NBC’s “Sunday Night Football.”

“My job is to set the tone and explain to people how I want to interact,” Skipper said. “In my dealings with the leagues, I will work with them as partners. I want them to enjoy working with ESPN and think that we’re fair, equitable and reasonable and we care about their sport and want to help them create the best presentations of it.”

Executives describe Skipper as someone who delegates more than Shapiro. But Skipper still communicates with his staff as much as Shapiro, holding weekly management meetings in Bristol and talking to his direct reports daily, usually by phone. Shapiro was an “e-mail lunatic,” said Norby Williamson, executive vice president of studio and remote production.

Because of the new structure, Bratches says communication between sales/marketing and editorial is better. Bratches says he talks with Skipper daily. “I’m trying to teach John how to text message,” he quipped.

And that may illustrate the biggest distinction between the two executives. Skipper is an old-school executive who hates using his cell phone and barely knows how to text message. Shapiro wouldn’t go anywhere without his BlackBerry.

These differences were clear to the NBA’s Silver after he had dinner with them separately for the first time. Shapiro took Silver and NBA Commissioner David Stern to Rao, an exclusive eight-table Italian restaurant in Manhattan that was described in one restaurant review as “the toughest restaurant in New York City to get a table at.”

Silver’s first dinner with Skipper? It was at Virgil’s BBQ, the down-home touristy joint in Times Square, where the two bellied up to the bar to watch a University of North Carolina basketball game.

That really describes John perfectly,” Silver said. “He was in his element.”


5 ESPN Executives You Should Know

There have been a number of changes at ESPN in the last year, with some new faces joining the company and some longtime executives who have continued to amass influence. Here are five senior executives with ESPN who don’t grace these pages nearly as often as they should — but who are people you should know.

Bratches
Sean Bratches
Executive vice president of sales and marketing
Bratches, who has been with the company since 1988, is the man in charge of all revenue coming into ESPN. He is well-regarded within the cable industry, having led ESPN’s affiliate relations team through the 1990s. Promoted to oversee all sales and marketing last October, he’s already beginning to make a name for himself in the ad sales community. “He always makes himself available to us around the clock,” said the NBA’s Deputy Commissioner Adam Silver. “He’s an incredibly accomplished and capable leader.”

Driessen
Christine Driessen
Executive vice president and chief financial officer
The highest-ranking woman at ESPN, Driessen joined the company in 1985 as a controller and has had a seat at the table for every big deal the company has signed for the past two decades. Down-to-earth and approachable, ESPN executives give Driessen credit for helping shape the network’s all-encompassing “surround” strategy, which brought content and ad sales online. She’s also been an integral part of virtually every ESPN launch, from ESPN2 in 1993 to the ill-fated Mobile ESPN earlier this year.

Mehta
Salil Mehta
Executive vice president, ESPN Enterprises
Despite having one of the highest-profile jobs at ESPN, Mehta has managed to stay below the radar. At a time when ESPN is promoting its non-TV platforms in a big way, Mehta is the one overseeing all of them. Focused and driven, Mehta has earned respect in Bristol for his collegial personality. He was hired from Disney in July 2005 to direct operations for ESPN.com, ESPN360, ESPN The Magazine, ESPN Books and the soon-to-be-shut-down Mobile ESPN. As broadband continues to grow, Mehta’s role should only get bigger.

Lacey
Katie Lacey
Senior vice president, marketing
Lacey had big shoes to fill when she joined ESPN last December. That’s because she was replacing Lee Ann Daly, the well-known marketer who made a name for herself developing the popular “This is SportsCenter” campaign. Combining a collegial approach with little ego, the high-energy Lacey is continuing to develop the ESPN brand. Lacey’s early moves have been mixed: She helped guide ESPN’s much heralded World Cup campaign with U2’s Bono and was responsible for the well-conceived and executed “Is It Monday Yet?” campaign around “Monday Night Football,” but she also was behind the much-panned Mobile ESPN’s spots.

Berson
David Berson
Senior vice president, program planning and development
Bristol’s newest whiz kid, Berson has replaced Mark Shapiro as ESPN’s hardest-charging 30-something. Having joined ESPN as an intern in 1994, the 34-year-old Berson now holds one of the top two positions in ESPN’s programming department, where he helps set ESPN’s schedule and tinkers with its shows. This year, the well-liked Berson can claim success for increasing ratings for ESPN2’s morning schedule when he moved “Mike & Mike” from ESPN News and moved the much-maligned morning series “Cold Pizza” to a midmorning time slot. He’s also had a hand in retooling “Quite Frankly” and moving it to a late-night slot.

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