Cincy goes big for All-Star spotlight Sports Media: Death of a merger BMW takes VIP cue from Masters How Bama, CLC rolled to $100M extension Breaking Ground: New opportunities Gardens take root Red Wings free up space for amenities People: Executive transactions OneTwoSee to provide X1 tech content U.S. Olympic Museum in fundraising mode
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ShoWare Center in Kent, Wash., looks as if it’s going to win the race to be the first LEED-certified new arena in the United States, according to project principals.
The $84 million facility, home to the Western Hockey League’s Seattle Thunderbirds, opened Jan. 2, and officials are waiting to hear from the nonprofit U.S. Green Building Council on certification. LEED, an acronym for the council’s Leadership in Energy and Environmental Design, is a rating system in which points are scored in six categories for sustainable design and construction of new buildings.
ShoWare Center would be the first new arena, regardless of size and tenant, to be LEED-certified. Other arenas being developed and built, including the Orlando Magic’s facility, have registered for LEED certification, but they can’t be certified until they have been completed.
In addition, existing arenas such as AT&T Center in San Antonio are seeking certification in a separate LEED classification.
In the Pacific Northwest, where environmental awareness is keen, designer LMN, builder Mortenson and their LEED consultant, Paladino & Co., developed a 6,100-seat arena expected to achieve LEED silver status, one level above the 26 minimum points required to be certified.
The possibility exists that ShoWare Center could even be awarded LEED gold by scoring 39 points, said Ben Golding, Mortenson’s project manager.
“We are 100 percent sure we are going to get silver and doing all it takes to get gold,” Golding said. “At the end of the project, we had enough of a buffer to do a couple things that we think will put us over the edge.”
One example: pushing outside air into the arena for 2 1/2 weeks to eliminate gaseous emissions from newly installed materials such as cushioned seats, rather than allowing those fumes to permeate the building. “You have to have time in the schedule to do that; it’s one of those difficult points,” Golding said.
SMG manages the facility, as well as the new Lucas County Arena in Toledo, Ohio, another midsize sports venue that local officials expect to be among the first LEED-certified arenas after the 8,000-seat building opens later this year.
In Kent, midway between Seattle and Tacoma, the city signed a 10-year, $3 million naming-rights deal with VisionOne, a Swiss-based technology company with U.S. headquarters in Fresno, Calif. VisionOne’s ShoWare is its Web-based ticketing system.
SMG signed a separate five-year deal with VisionOne to use ShoWare as its ticketer, said Tim Higgins, the arena’s general manager. Higgins declined to disclose the deal’s value.
Ticket convenience fees are $3 for hockey games, and there are no fees charged for fans printing their tickets at home. Those prices are a bit lower than the industry standard, Higgins said. Individuals ordering Thunderbirds tickets online are charged $5 to pick them up at the box office.
At least three networks have emerged as serious bidders for the U.S. media rights to the English Premier League, the world’s most popular soccer league.
ESPN, Fox Soccer Channel and Setanta Sports are lining up to acquire the rights when the bidding process officially opens this spring or early summer. The EPL is making a three-year package available, from the 2010-11 season through the 2012-13 season.
The U.S. media rights will be awarded after the league decides what to do with the six British packages that it is selling. The EPL has set aside Feb. 3 as the day it will hold an auction for those packages, sources said. Fox Soccer parent News Corp., Setanta and ESPN all plan to bid on those U.K. rights.
The process in the U.S. and other international regions should begin soon after that tender has concluded, which is a risk considering the havoc that the global economic recession is having on media companies.
The time difference between Britain and the United States also is working against a significant U.S. rights fee increase, especially since most EPL games would be played on weekend mornings — a time slot that typically does not see big enough ad sales to justify a large rights fee increase.
During the last bidding process, the EPL netted just $57 million over three years from Setanta and Fox Soccer for rights in the U.S. That sum amounts to just 6 percent of its total international rights.
Overall, the EPL has reaped a windfall from its last round of TV contracts, which is bringing in $3.5 billion per year in the current contract — $2.5 billion of that from the domestic British market.
“We know through the Fox (ratings) numbers and the Champions League number from ESPN that there’s a legitimate demand for the sport here,” said Jeff L’Hote, head of LFC International, a New York-based soccer consultancy. “The opportunity for a U.S. broadcaster in this round of bidding is greater than last time and for that reason the value will increase.”
The Premier League is hoping that a bidding war will push the U.S. rights fees higher. Fox Soccer Channel and Setanta Sports are expected to bid aggressively, since the Premier League has been the foundation of both networks. Fox Soccer, which has held the rights since 1998, changed its name from Fox Sports World in 2005 largely because of the value of the Premier League, and it is now distributed in approximately 35 million homes. Its highest-rated Premier League match between Chelsea and Manchester United drew 243,000 viewers on Jan. 11.
“We’ve been their partner for 11 years now in the U.S.,” said Fox Soccer Channel general manager David Sternberg. “We’re focused on continuing that relationship, and we’re going to pursue vigorously the extension of our programming rights.”
Setanta Sports is a premium channel that costs $14.99 a month and is available on Dish Network, DirecTV, Cox, Comcast, AT&T U-Verse and Verizon FiOS. Soccer is one of its key sports, and the Premier League is its most important property with more than 150 live and exclusive matches per season.
“We know that the product is arguably the most important product in the soccer marketplace in terms of viewer appeal,” said Roger Hall, managing director international for Setanta Sports. “That’s going to make it a competitive process that will involve the usual suspects.”
Setanta and Fox Soccer collaborated to split the U.S. rights for three seasons in 2007. The deal has worked well for both parties and it’s possible that they will collaborate again later this year. Because Setanta is a premium channel, it doesn’t require advertisers the same way Fox Soccer does; and because Fox Soccer doesn’t show every game, Setanta is still worth purchasing in the eyes of the most ardent soccer fans.
“We have a very good track record [with Fox Soccer Channel],” Hall said. “All things point to that being a positive relationship in the future.”
The Premier League also is counting on ESPN making a serious bid based on the network’s increased interest in soccer since the last time EPL rights were up for bid. In that time, ESPN signed Major League Soccer to an $8 million-per-year deal through 2014.
ESPN could be more interested in the EPL’s broadband rights, which are currently held by Fox Soccer Channel and Setanta, rather than its TV rights. ESPN has been building up its online video network, ESPN360, with international soccer rights.
The notion that Myles Brand’s treatment for pancreatic cancer will lead to sweeping changes inside the NCAA’s Indianapolis halls is off base, says the man who has sat next to Brand for the last six years.
What seems likely, though, is that some of the NCAA’s top executives would be thrust into more visible roles, starting with Wally Renfro, the senior adviser to the president and Brand’s right-hand man since he became president in 2003.
Like Renfro, many of the top NCAA executives have been with the organization for years and toiled behind the scenes while the president was the face of the group, lending credence to the idea that Brand’s illness won’t affect the NCAA’s inner workings. But publicly, Brand, who is undergoing chemotherapy, won’t be traveling and speaking like he once did.
“There’s a relatively modest shifting, and most of it is in terms of focus,” Renfro said. “There’s not a lot of change taking place. … Myles is still the president of the NCAA and he’s still functioning in that position.”
Specifically, Brand said he’d ask for assistance from executive vice president Bernard Franklin on academic reform and from senior vice presidents Greg Shaheen and Jim Isch on business matters. How that assistance manifests itself remains to be seen, based on how Brand recovers and the toll chemotherapy takes on him.
Brand first told NCAA staffers on Jan. 9 that he was dealing with an unspecified illness that would cut into his travel and work hours. Then, on Jan. 17, Brand announced via a news release to those at the NCAA Convention in Washington, D.C., that he was suffering from pancreatic cancer. “The long-term prognosis is not good,” he said.
Despite Brand’s grim news, the staff has maintained a business-as-usual approach, Renfro said, and Brand is still in the office on a part-time basis.
Renfro, an NCAA veteran of four decades, will occasionally find himself in the role of the president in the coming weeks as Brand undergoes chemotherapy. He was scheduled to speak in Brand’s place at Washington & Lee on Friday, and on Jan. 17 he delivered the state-of-the-NCAA speech for Brand, who was unable to travel to Washington, D.C., for the NCAA Convention after starting chemotherapy the week before.
“Obviously, Myles is dealing with the illness and he has a treatment regimen,” Renfro said. “That regimen means he will need more hands and feet and eyes and ears to assist him. But in terms of dramatic changes in day-to-day operations, I don’t think you could read into that.
“Myles has put together terrific leadership, he’s clearly laid out strategic directions and we’ll keep the wheels on the vehicle moving forward. Myles continues to have a leadership role in all of that, THE leadership role.”
A groundswell of television viewers in the Cleveland market is bearing witness to LeBron James and the Cavaliers so far this season. One of the league’s best teams, the Cavs have posted higher local ratings than any other NBA club for the first time in their 39-year history.
The team’s local Cleveland ratings have soared 130 percent on Fox Sports Ohio, posting a 7.7 average local cable rating through the first few months of the season.
That has helped fuel an overall increase in local regional sports network numbers, as on average, NBA teams have seen their local ratings climb by 11.7 percent, to a 2.4 rating, through Jan. 11,
“We are in a period of sustained success at a high level on the floor and our fan base has been energized on a regional basis,” said Cavaliers President Len Komoroski. “We are not in a growth [designated market area]. We aren’t Phoenix or Las Vegas, but we are the only NBA team in Ohio and we have a footprint of 15 million people who should be Cavs fans.”
Steve Liverani, FSN Ohio’s outgoing senior vice president and general manager, said the strong ratings for the Cavs is the main reason his network’s ad sales have remained relatively flat so far this year, a good result for a city that has been hit harder by the economy than many others.
“It’s helped us open doors at a time when the economy is sliding the wrong way,” he said. “Holding steady is a good place to be.”
The good ratings have averted a potential ad sales disaster for the league, which started its season after the financial collapse in September.
“If you’re selling basketball in this country right now, there are very few RSNs that are doing great [with ad sales],” said Mike Wach, YES Network’s executive vice president of ad sales. “It’s just not an area right now that everyone is flocking to.”
Wach described YES’s ad sales around Nets programming as so-so, with ratings down slightly, from a 0.7 last year to a 0.6 this year.
Kyle Sherman, FSN’s executive vice president of ad sales, also subscribed to the new mantra that “flat is the new up” in the current recession.
“Overall, ad sales are holding steady, which is something of an achievement in the current economy,” he said.
This year, though, the good ratings news can be spread around. The NBA’s previous ratings champ, the San Antonio Spurs, have the league’s second-highest rating so far with a 5.8, a number that was 9.4 percent off of its mark in the first half of last season.
The league’s biggest ratings gainer so far is the New Orleans Hornets, whose local ratings are up 214 percent on Cox Sports. It posted a 2.6 rating so far this season, which is up from a 0.8 rating last year.
The news isn’t all good, though.
The Charlotte Bobcats and Los Angeles Clippers have the lowest local television viewership, with each posting a 0.5 rating. It should be noted that the Clippers, given the vast size of the Los Angeles market, draw more household viewers than teams in smaller markets such as the Bobcats.
Charlotte is in the first year of its deal with Fox Sports South. Last year, its games were on the Time Warner Cable channel News 14.
Ratings on NBA team RSNs have increased 11.7 percent compared with the same period last season. Team RSN (No. of telecasts) Rating Change Hawks Fox Sports Atlanta (17) 1.3 61.60% SportSouth (14) 1.5 48.40% Celtics Comcast SportsNet New England (33) 3.7 2.20% Bobcats SportSouth* (8) 0.5 -31.10% Fox Sports Carolinas* (18) 0.5 -21.00% Bulls Comcast SportsNet Chicago (32) 2.6 22.60% Comcast SportsNet Chicago+ (1) 1.9 NA Cavaliers Fox Sports Ohio (30) 7.7 130.30% Fox Sports Ohio/WUAB (2) 4.8 231.00% Mavericks Fox Sports Dallas (20) 1.2 -34.30% Nuggets Altitude (32) 2.2 -19.10% Altitude2 (4) 1.4 154.50% Pistons Fox Sports Detroit (29) 3.9 -5.80% Fox Sports Detroit+ (4) 1.2 NA Warriors Comcast SportsNet Bay Area (33) 1.5 -36.30% Comcast SportsNet Bay Area + (1) 1 -52.40% Rockets Fox Sports Houston (29) 2.6 -9.30% Pacers Fox Sports Indiana (33) 1.9 -10.30% Clippers Fox Sports Prime (15) 0.5 -30.00% Fox Sports West (6) 0.6 54.20% Lakers Fox Sports West (20) 4.2 23.50% Grizzlies Fox Sports Memphis (22) 2 15.80% SportSouth (8) 1.6 NA Heat Sun Sports (29) 2.2 11.20% Bucks Fox Sports Wisconsin (34) 2.4 7.00% Timberwolves Fox Sports Minnesota (14) 1.1 9.60% Nets YES (37) 0.6 20.00% Hornets Cox Sports (23) 2.6 214.30% Knicks MSG (35) 1.2 3.60% Magic Sun Sports (24) 1.6 -11.00% Fox Sports Florida (9) 0.8 212.20% Thunder Fox Sports Oklahoma (29) 1.2 NA** 76ers Comcast SportsNet Philadelphia (32) 1.5 9.80% CN8 (1) 1 -16.70% Suns Fox Sports Arizona (12) 3.4 -28.40% Trail Blazers Comcast SportsNet Northwest (23) 4 15.30% Kings Comcast SportsNet California (31) 2.7 -7.40% Spurs Fox Sports San Antonio (17) 5.8 -9.40% Jazz Fox Sports Utah (31) 4.5 21.60% Wizards Comcast SportsNet Mid-Atlantic (25) 1.1 3.60% Comcast SportsNet Mid-Atlantic+* (7) 0.6 67.50%
Editor's note: This chart is revised from the print edition.
NA: Not applicable
Note: Ratings through Jan. 11, 2009, compared with telecasts through Jan. 13, 2008. Comparable data for the Toronto Raptors was not available.
* Broadcast partner has changed since 2007-08 season
** Through the first 27 telecasts through a comparable time period last season, the Seattle SuperSonics had averaged a 1.36 on Fox Sports Northwest, 12.5 percent higher than the Thunder’s first 29 telecasts in 2008-09.
Source: SBJ research
Ratings winners and losers among NBA teams’ primary TV rights holders Biggest increase Rating Change Hornets Cox Sports (23) 2.6 214.30% Cavaliers Fox Sports Ohio (30) 7.7 130.30% Hawks Fox Sports Atlanta (17) 1.3 61.60% Hawks SportSouth (14) 1.5 48.40% Lakers Fox Sports West (20) 4.2 23.50% Biggest decrease Warriors Comcast SportsNet Bay Area (33) 1.5 -36.30% Mavericks Fox Sports Dallas (20) 1.2 -34.30% Clippers Fox Sports West (15) 0.5 -30.00% Suns Fox Sports Arizona (12) 3.4 -28.40% Bobcats Fox Sports Carolinas* (18) 0.5 -21.00%
Hunt Sports Group has hired Centerplate to operate the food service at Pizza Hut Park in Frisco, Texas, home to FC Dallas of the MLS.
The move coincides with Hunt’s effort to improve the quality of concessions at its three big league stadiums, which also include Crew Stadium in Columbus and Arrowhead Stadium in Kansas City.
Centerplate replaces Sodexho, a company whose sports clients are mostly college venues, at Pizza Hut Park. Sodexho remains the concessionaire at Crew Stadium.
Hunt Sports Group President John Wagner declined to disclose the contract’s length but said Centerplate would be paid a management fee instead of a profit-and-loss agreement, where the concessionaire makes a financial investment. A fee-based deal gives the team more control, Wagner said.
Bringing on Centerplate ties into the group’s recent hiring of Jim Fischer, a former Centerplate general manager based in Kansas City, where the firm runs the regular concessions for the Hunt-owned Chiefs at Arrowhead Stadium. Levy Restaurants operates the stadium’s premium dining.
In December, Fischer was named to the newly created position of Hunt Sports Group’s manager of culinary and merchandise retail operations for Arrowhead, Crew Stadium and Pizza Hut Park.
“We are evaluating the concessions side of all our businesses,” Wagner said. “In the stadium, it’s the second-most important thing that goes on beyond the event.”
The move comes as publicly held Centerplate attempts to complete its sale to Kohlberg & Co. on Tuesday, pending shareholder approval.
Comcast is combining the national sales teams of Versus and Golf Channel under the Comcast Sports Sales banner, which will be led by advertising sales president David Cassaro.
Comcast made the move to offer a one-stop shop for ad buyers looking to buy on one of Comcast’s sports properties. It also allows Comcast to try to sell advertisers positions on more than one network, not to mention online and in video-on-demand. “Bringing golf under the umbrella supports all of our customers by offering more ads, more programs and more consistency on how we do business in the back room than maybe existed in the past,” Cassaro said.
Cassaro said both networks’ ad sales are more “challenging” than usual, due to the economic recession. But he said the downturn had no effect on the formation of Comcast Sports Sales, which had been planned since last spring.
Golf Channel, which is in 82 million homes, was the last Comcast sports network with an independent sales team. Versus is in 74 million homes.
Cassaro said there were companies that already advertise across both networks, and that the multiplatform offering “has yielded more sales,” though he wouldn’t name names.
“It’s tough to judge in an economically tough time,” he said, “but since we formally brought them into the group we’ve seen the benefit of sitting with a major beer client, major automotive partner and major packaged goods company. They’re interested in hearing our ideas.”
The 18- to 49-year-old demographic is drawn to live sports programming on Versus such as mixed martial arts, the NHL and Professional Bull Riding, while outdoor programming generally appeals to wealthy, older men, the same core demographic as Golf Channel.
“You would be surprised at how affluent the people in the fishing and hunting category are,” Cassaro said. “I like to think we can be a little more nimble [than our competitors]. Our ratings and events sometimes aren’t as big, so we can afford to find integrations that maybe some of our competitors can’t.”
Leading NFLPA executive director candidate Troy Vincent met or talked with at least two of the four
U.S.congressmen who sent a letter to the union and the Department of Labor last month that raised concerns about the search for a successor to the late Gene Upshaw, said U.S. Rep. Jim Moran.
The question of whether Vincent spurred a congressional inquiry into the search has become a major issue, and sources said that if true it could potentially hurt his chances of getting the executive director job.
Moran, a Democrat from Northern Virginia, is not one of the four who signed the letter. His interest was sparked by his daughter, Mary Moran, who runs human resources at the NFLPA and asked her father to look into what prompted the letter. Moran, who forwarded his findings to the union last week, said that when he asked his four colleagues why they sent the letter, “In each case, all mentioned Troy Vincent.”
Vincent, sources said, denied that he had met with the congressmen when he was asked earlier this month by interim Executive Director Richard Berthelsen during a candidate interview. Vincent, a former NFLPA player president, is one of five final candidates vying for the post and, along with fellow former NFLPA president Trace Armstrong, is considered a top contender for the job.
The search will move into its next phase when the union’s executive committee questions the remaining candidates in interviews expected to take place sometime after Sunday’s Pro Bowl. It is thought that one or two candidates will be cut; the rest will travel to Maui, where the 32 player representatives will elect the next executive director.
The congressmen who signed the letter are Gregory Meeks of New York, G.K. Butterfield of North Carolina, EdolphusTowns of New York and Bobby Rush of Illinois, all Democrats.
“I spoke with Congressman Butterfield first,” Moran said, “and he mentioned that Troy was a great guy and his family owned land in [Butterfield’s] district.”
Meeks said he met with Vincent in Meeks’ office before the letter was sent, Moran said, at which time Vincent asked Meeks to ensure that the process was not discriminatory against a black candidate. Vincent is black. Vincent also asked Meeks not to endorse him, Moran said, recounting his conversation with Meeks.
Meeks also said, Moran added, that Vincent had communicated to him that Vincent had been the choice of Gene Upshaw to succeed him. Upshaw ran the NFLPA for 25 years before dying unexpectedly in August. Vincent and Upshaw had not been on speaking terms for five months before Upshaw’s death.
Moran said he told Meeks that Meeks may be misinformed about Upshaw and Vincent’s relationship.
Rush, Moran said, replied that he had not had an opportunity to speak with Vincent. Towns, Moran said, told Moran that he had talked with Vincent.
A spokesman for the House Committee on Oversight and Government Reform, which Towns chairs, denied that Towns had spoken to Vincent specifically about the NFLPA position, but said Meeks had met Vincent in the past.
A spokesman for Butterfield, Ken Willis, said the representative had not met with Vincent and only signed the letter because Meeks asked him to on the floor of the House. A spokeswoman for Rush said she would call back but had not by press time.
Moran wrote up his findings in a memo, which he sent to Berthelsen. Berthelsen then sent the findings to the players executive committee, according to a source.
Berthelsen has declined for months to comment on anything regarding the search process, and he could not be reached on this story late last week.
Two members of the executive committee, Kevin Mawae and Keenan McCardell, traveled to Washington last Wednesday to meet with Meeks expressly to find out whether Vincent had met with him, according to multiple sources.
Mawae wouldn’t comment, and McCardell could not be reached.
Sources differed on what Meeks told the duo. One source said that Meeks was very “political,” meaning that he didn’t give a definitive answer, while another said that Meeks denied having met with Vincent before the letter was sent.
Meeks, approached last week, before Moran spoke out, as he walked into his Capitol Hill office, was asked whether he had met or spoken with Vincent. Meeks responded, “I have spoken with former NFL players.” Asked again, specifically, if he had spoken with Vincent, Meeks said, “Not regarding that, the matter you’re referring to.”
It’s unclear what Meeks was referring to, because the reporter had not mentioned the letter regarding the NFLPA. Meeks then walked into his office and closed the door, ending the interview.
Later, when Meeks emerged from his office and walked to the underground parking garage, he did not respond to questions asking him to identify the other former players with whom he said he had spoken.
Sources said that if Vincent is found to have played a part in getting the letter sent, it could potentially harm his chances of getting the job. The move could be viewed as showing a lack of respect for the search process and could make it appear the union was weak at a time when it is facing labor unrest.
Sources also say the union is increasingly divided between those who support Vincent and those who oppose him.
In addition, some sources say NFLPA staff members favor candidate Armstrong because they believe they are more likely to keep their jobs at the union if he is elected executive director. Armstong could not be reached for comment.
Other sources say that staff members oppose Vincent because they believe he tried to unseat Upshaw at the annual meeting in Maui last year. Vincent has denied he had any part in any coup attempt.
At the interview in Dallas, Vincent presented the executive committee with a February 2007 e-mail written by Upshaw expressing his desire that Vincent succeed him, one source said. But sources loyal to Upshaw noted that was before Upshaw cut off the relationship in March 2008.
There have been differing media reports about Vincent’s relationship with Upshaw in the months before Upshaw’s death, and the letter the four congressman sent to the NFLPA specifically referenced a Jan. 4 column in The New York Times. The piece stated that although Upshaw would not name a successor, “he often hinted that Vincent had the requisite skills to lead the membership” and that part of the rift between Upshaw and Vincent was because Vincent was more willing than Upshaw to reach out to retired players. Former players have waged a public battle with the union over retirement benefits, and some have sued the NFLPA over marketing royalties.
But numerous friends of Upshaw disputed the Times’ characterization of their relationship.
One of them, former NFL player and NFLPA executive committee member Robert Smith said, “I know Gene did not want Troy in that position.”
Smith, who was initially mentioned in the media as a candidate for the executive director job but chose not to run, said, “I know for a fact the retired-players issues were not the issue between Gene and Troy. Their relationship soured over other issues.” Smith would not say what those issues were.
Correspondent Sarah Anderson contributed to this story. She writes for the Washington Business Journal, an affiliated publication.
Why has NFL Network’s distribution push stagnated, just as the new MLB Network completed the most successful launch in cable history?
NFL executives would point to MLB’s decision to sell equity in the channel to cable operators. Cable operators, however, would counter by pointing to the monthly cost of each channel. At 70 cents per subscriber per month, NFL Network charges more than twice as much as MLB Network.
But one of the most compelling reasons for the distribution difference lies with how each league treats its out-of-market package. The NFL has sold Sunday Ticket exclusively to DirecTV since 1994, and its current deal lasts through 2010. MLB decided to tie access to Extra Innings with carriage of its network. Cable couldn’t take one without the other.
Cable operators are quick to point to that discrepancy as a main reason why NFL Network is having distribution problems.
“If we had been given access to the NFL Sunday Ticket, we would not have been able to put the NFL Network on a sports tier,” said David Cohen, Comcast executive vice president. “The deal structures between the NFL and Major League Baseball are 100 percent identical. It’s just that the two leagues have treated their out-of-market packages in a different way. As a result, they’ve ended up with different carriage of the network-owned channel.”
Major League Baseball discovered the power of its out-of-market package as a negotiating tool two years ago, when it was battling cable to carry its channel.
In October 2007, soon after he secured carriage on the top cable operators, MLB’s Tim Brosnan said the threat of losing Extra Innings to satellite is what brought cable operators to the table.
“We probably underestimated how powerful a weapon going exclusively with the Extra Innings package was,” he said.
Since then, other league channels, including NBA TV and NHL Network, have tied carriage of their league-owned channels to access to their out-of-market packages.
NFL Network’s Steve Bornstein would not discuss the specifics of his channel’s distribution strategy, but said he doesn’t compare the NFL’s channel to that of any other league’s.
“Comparing us to those networks is not anything that I ever do,” Bornstein said. “I’m putting out a 24-hour-a-day signal that’s getting real viewership.”
A former NFL executive believes the Sunday Ticket argument from cable falls short. The executive suggested that the league probably would not be in a better financial position if it cut a Sunday Ticket deal with cable because the league would wind up with essentially the same amount of revenue regardless of what it does.
“On one hand, they would get much broader distribution at rates they were happy with,” the executive said. “But the rates would be tied into Sunday Ticket, so there might not be incremental economic value being created for the league at some level — getting paid less for Sunday Ticket but getting paid more from cable.”
— John Ourand
Digitaria, a San Diego-based digital marketing and technology firm, has formed a separate sports division to handle its growing corporate focus on the industry.
As part of the reorganization, the firm has signed a one-year deal, with options, to design and manage the digital assets of AVP Pro Beach Volleyball. AVP had been aligned with MLB Advanced Media since early 2007, but its contract with baseball’s digital arm was not renewed after Dec. 31.
MLBAM is sharpening its focus on its own properties and is tabbing only select, larger clients for outside work.
Digitaria in recent years has secured nearly two dozen sports-related digital projects, including the construction of Web sites for the Atlanta Falcons, Baltimore Ravens, International Speedway Corp. and, most recently, the expansion Seattle Sounders FC of Major League Soccer. The new division, which will comprise about 20 people out of Digitaria’s total head-count of 90, will target the major American stick-and-ball properties as well as action and international sports.
“The landscape is definitely moving,” said John Van Spyk, Digitaria vice president and the executive who will lead the new sports division. “You’ve certainly had in recent years some properties move to bring more of their digital assets in-house. Some will be able to pull it off, but some league and team solutions have room for improvement, so we still feel there is a lot of opportunity. This framework allows us to specialize our team and really have a concentrated focus.”
The redesigned AVP site was scheduled to have launched last Friday. It was slated to include an increased emphasis on social-media applications, video content and real-time information. Further enhancements are planned for later this year.
“This is the next step of our evolution, and one that will allow us to expand our [digital] capabilities and offer new opportunities and content to our fans,” said Leonard Armato, AVP commissioner. “BAM was a good partner, but their business model has changed a bit, and our parting was a good one. We’re coming out now with a fresh, new look that’s going to allow people to go deeper into what we’re doing.”
Wayne Huizenga is likely the last of a rare breed: a three-team owner who dramatically changed the sports landscape of an entire region. Last week, he closed a deal selling his majority interest in the Miami Dolphins, the final piece of his sports holdings that at one time included the Florida Marlins and the NHL Panthers. Following is a look at the Dolphins under Huizenga’s tenure.
1994: Huizenga buys 85 percent of the team and 50 percent of the team’s stadium from the Robbie family for $109 million plus the assumption of more than $15 million in debt. Huizenga already owned the remaining shares of the team and the stadium, having acquired those stakes in 1990.
1996: Pro Player — an amalgam of three New England clothing makers turned subsidiary of underwear giant Fruit of the Loom — signs a 10-year, $20 million naming-rights deal for what was then known as Joe Robbie Stadium, named after the Dolphins’ original owner.
1999: Fruit of the Loom files for bankruptcy protection.
January 2000: Team loses wild-card playoff game to Jacksonville 62-7. It’s Dan Marino’s final game with the team.
April 2000: Huizenga regains naming rights to the stadium and indicates the name will not change until a new naming-rights deal is secured.
June 2000: Dolphins announce that Huizenga plans to add one or more minority investors, with the increasing cost of NFL teams pushing many owners to consider selling ownership stakes.
May 2001: Huizenga calls off an attempt to sell a minority interest in the team, citing poor market conditions.
September 2001: After agreeing in principle to buy the AFL’s Florida Bobcats, Huizenga passes on buying into the indoor league.
2004: Still no new naming-rights deal for the stadium. Huizenga says the club recently said no to two potential deals because of the way the name would sound and because of concerns that fans would abbreviate it into an unfavorable shorthand moniker, but he declined to name the two companies.
January 2005: Team concludes a 4-12 season, its first sub-.500 season since 1988.
January 2005: Huizenga changes the name of Pro Player Stadium to Dolphins Stadium and unveils a three-phase plan to renovate the 18-year-old facility using $300 million-plus in private financing.
March 2005: Huizenga asks owners to consider awarding the Super Bowl every three years to Dolphins Stadium, which he would expand with adjacent buildings and facilities for concerts and for team and sponsor parties.
April 2006: The stadium name is changed to Dolphin Stadium. Also unveiled are a new stadium logo; two high-definition video boards; and a new fascia LED ribbon-board.
October 2006: Fitch Ratings downgrades the debt tied to Dolphin Stadium, citing the steep debt load of the facility’s ownership company. The stadium company is selling $100 million in bonds through a government agency to finance renovations to the facility.
December 2007: Team flirts with a winless season, losing 13 straight before winning on Dec. 16. The Dolphins finish 1-15.
December 2007: Bill Parcells signs a four-year contract to become the team’s executive vice president of football operations.
March 2008: Stephen Ross acquires half of the team and stadium from Huizenga in a $550 million deal.
October 2008: Ross agrees to sell part of his share of the holding company that owns the team, underscoring the high price of operating in the NFL, but he and Huizenga each continue to own half of the team.
October 2008: NFL owners pre-emptively approve the sale by Huizenga of an additional 45 percent stake of the Dolphins to Ross. Huizenga will remain the general partner until he decides when he wants to let the stake go, giving Ross 95 percent.
December 2008: Dolphins win the AFC East, advancing to the playoffs for the first time since 2001. The team is eliminated in the wild-card round, losing 27-9 to Baltimore.
January 2009: Huizenga and Ross jointly announce the closing of the deal that gives Ross 95 percent ownership of the Dolphins and their stadium and makes him managing general partner.
Research by Danielle Oliver
Sources: Miami Dolphins, SportsBusiness Journal/Daily archives
M&M’s will be monitoring two races this season — the one involving its driver Kyle Busch in the No. 18 Toyota, and the one to identify NASCAR’s most colorful fan.
The Mars brand will kick off its second “Most Colorful Fan of NASCAR” promotion Feb. 15, the day of the Daytona 500, but the 2009 version will have many more tentacles, including a presence on NASCAR.com and social-networking sites. The campaign will run 28 weeks, 10 weeks longer than last year’s version.
“We’re trying to go where the fans are, play where the people play,” said Ryan Bowling, Mars’ manager of public relations and marketing. “Instead of trying to drive people to a racing site, we’re going where they are every day, like Facebook and Twitter.”
The promotion’s home will be on NASCAR.com, where a link will take fans to the contest. There, they’ll be able to upload race-related photos of themselves and viewers will vote each week for the most colorful fan. The weekly winners will enter a playoff, where the ultimate most colorful fan will be crowned. Mars is tinkering with the idea of creating its own Chase from that playoff model.
M&M’s also will use behind-the-scenes video of Busch and crew chief Steve Addington on Facebook and Twitter pages, as well as YouTube.
At the race venues, Mars will send M&M’s ambassadors — most likely employees from its agency, Weber Shandwick — to engage fans and bring the M&M’s program to life, Bowling said.
Eleven NBA teams were recognized for having full-season-ticket sales of at least 10,000 when league officials handed out awards during their annual marketing meetings recently held in Phoenix.
Last year, 10 NBA teams reached the 10,000 full-season-ticket sales mark.
The teams this year eclipsing the 10,000 full-season-ticket sales mark are the Boston Celtics, Chicago Bulls, Dallas Mavericks, Golden State Warriors, Los Angeles Lakers, New Orleans Hornets, Phoenix Suns, Portland Trail Blazers, Oklahoma City Thunder, Toronto Raptors and Utah Jazz. New to the list this season are the Celtics, Bulls, Hornets, Blazers and Thunder. Dropping off the 10,000 full-season sales list are the Cleveland Cavaliers, New York Knicks, San Antonio Spurs and Miami Heat.
“Despite all the economic turmoil, we are trending up or even [across all categories], and we are up 5 percent in sponsorship revenue teamwide,” said Chris Granger, senior vice president of team marketing and business operations for the NBA. “Our group sales are up double digits and there is a creative effort among teams to share ideas and get a real sense of what works and what doesn’t.”
Seven teams that have sold at least 2,000 in new full-season-ticket sales this season are the Celtics, Warriors, Houston Rockets, Hornets, Thunder, Orlando Magic and the Trail Blazers. Last season, eight teams had sold more than 2,000 new full-season tickets. Those teams were Cleveland, Toronto and Utah, along with the Magic, New Jersey Nets, Celtics, Detroit Pistons and the Trail Blazers.
Teams recognized this year for the highest group sales were Chicago, Cleveland, Denver, Detroit, Indiana and Washington.
Through Jan. 19, the NBA is averaging 17,244 fans per game, up 0.9 percent to date from last season. The Pistons lead the NBA in attendance with an average of 22,076 fans per game. The Sacramento Kings are last in the NBA in average attendance with 12,277 fans per game. The Kings also have the largest attendance decrease in the NBA with an 11.6 percent drop at the gate. The New Orleans Hornets have the highest attendance gain with a 38.6 percent increase to an average of 16,976 fans per game.
With Sunday’s Super Bowl perhaps one of the last to be contested under a system with a salary cap, there are nonetheless no plans to begin talks for a new collective-bargaining agreement, NFL Players Association Acting Executive Director Richard Berthelsen said last week.
At the same time, the union last week whittled down to at least five the number of candidates to be the executive director who will lead the players at this critical juncture. That group includes outsider candidate DeMaurice Smith, a high-profile Washington, D.C., attorney who was on President Obama’s transition team.
“We have been advised the owners are discussing among themselves, through various committees, what their bargaining stance will be,” Berthelsen said. “We don’t expect to meet with them until they have decided on that bargaining stance.”
NFL owners voted unanimously in May to end the CBA two years early, arguing that the current deal overwhelmingly favors the players. The deal now runs through the end of the 2010 season, with that final campaign having no salary cap.
Since its adoption in 1993, the salary cap has been credited for underpinning the sport’s rapid growth.
“Typically, in collective bargaining, when one side gives notice that they want to re-open or terminate, they are expected to make proposals as to how they want the agreement changed,” Berthelsen said. “The NFL owners have not yet done that with us.”
NFL spokesman Greg Aiello said in response, “There are two more years to go under the current deal. There is plenty of time to negotiate the next agreement.”
Union officials are convinced the league wants to push talks up to the first hard deadline, which is March 2010. Absent a deal then, the NFL would enter a season without a salary cap. March 2011 would become the next major deadline, with a lockout of the players the most likely scenario at that point if a new labor pact were not struck.
The NFLPA’s outside attorney, Jeffrey Kessler, said the league is using the executive director search as an excuse to delay meeting and instead wants to wait until near the deadline to begin talking in earnest.
“The union was willing to have discussions because the position of players is really going to be the same regardless of who the executive director is,” Kessler said.
Aiello called Kessler’s comment “nonsense.”
“We are ready and eager to meet as soon as possible,” Aiello said. “The NFLPA has not asked for any meetings.”
League sources have said in the past the NFL does not envision serious negotiations beginning until well after a new NFLPA executive director is named. That is slated to occur in March at the NFLPA’s annual meeting in Hawaii.
Last week, the NFLPA narrowed down the list of candidates for a successor to Gene Upshaw, who died Aug. 20 from pancreatic cancer after leading the union for 25 years. Although it was not clear as of last Thursday exactly how many candidates remain, sources said that former players Troy Vincent, Trace Armstrong, Jim Covert and Ben Utt, as well as Smith, a partner with Patton Boggs, are still in the running.
It was not clear if former player John Spagnola is still in that mix. Three other candidates, former NFLPA player president Mike Kenn, athlete attorney David Cornwell and Rod West, the CEO of the gas and electric utility company for New Orleans, confirmed last week they are no longer candidates.
The NFLPA declined to comment on the search. Covert, Utt, Vincent, Armstrong and Spagnola could not immediately be reached for comment. A spokeswoman for Patton Boggs, Smith’s firm, declined to comment.
The list will likely be cut down again such that only three or four candidates would give presentations to the 32 player representatives at the union’s annual meeting in Hawaii. One source said that next cut may occur sometime after the Pro Bowl early next month.
The union’s interim executive director, Berthelsen, is scheduled to speak with the media on Thursday at the union’s annual press conference during Super Bowl week. He is likely to outline the NFLPA’s stance on labor relations and give an update on the search process at that time.
It will be an odd sight for industry veterans to see the dais without the commanding presence of Upshaw, while Berthelsen, the more reserved, longtime general counsel for the group, leads the session. The player president traditionally sits next to the executive director and speaks to the media. Tennessee Titans center Kevin Mawae is the player president, having taken over last year for Vincent.
Has distribution for NFL Network been hurt by the league’s policy that mandates that every game not facing a blackout be broadcast into its local market?
Cable executives privately think so, and are terrified that the NFL will eventually do away with that practice, leading to more pressure on cable operators to cut a deal.
Imagine the amount of pressure operators would face if, for example, cable subscribers in Dallas can’t see a Cowboys game that is on NFL Network.
Currently, the NFL would make that game available to a local broadcaster in the Dallas designated market area.
Other NFL cable partners, like ESPN and TNT, have tried to get rid of this policy over the years. In bidding for a package of game rights in 2004, Comcast wanted to shelve that rule, believing it would hurt its sports channel’s chances to increase its license fee and distribution.
Other networks say cable exclusivity has been critical in getting cable operators to make deals. A Fox executive suggested that the Big Ten Network never would have been able to cut cable deals with Comcast or Time Warner if it had to make its games available to over-the-air broadcasters.
Mark Lazarus, who oversaw NFL programming while with TNT for 16 years, suggested that the NFL should consider moving away from that 20-year-old rule.
“The other sports have been more progressive,” said Lazarus, who is now with Career Sports and Entertainment. “They’ve been able to command rights fee growth. But they’ve also given value to the networks and their distribution partners in exchange by making it exclusively available over the cable and satellite platform.”
However, Steve Bornstein, head of the NFL Network, said the league has no intention of changing that rule.
“Our eyes were wide open,” he said. “We knew exactly what we were doing, and we still think our sport and the content we’re putting out there is popular enough that people are going to demand it from their distributors.”
The problem is that the NFL is tied to the rule.
League executives have curried favor in Washington, D.C., by highlighting their TV policy. It would be hard for them to do an about-face and do away with a rule that they have been championing on Capitol Hill for decades.
In November, for example, after ESPN paid $495 million over four years to bring all BCS bowl games — including the championship game — to cable, the NFL’s top lobbyists blanketed Capitol Hill with a simple message: Unlike every other sports property in America, the NFL is committed to making every regular-season and postseason game available to over-the-air broadcasters.
In a letter sent to all members of the U.S. House of Representatives, the NFL’s Jeffrey Miller called the broadcast-centric approach “the centerpiece of our television policy.”
“It’s been our policy for over 20 years and we don’t see any reason to change it,” Bornstein said. “We want to serve everybody. I inherited those broadcasting policies. As a professional in the business, you admire those broadcasting policies. That’s contributed to the broad popularity of the sport. I don’t see any reason to really challenge that.”
— John Ourand
The NBA’s national television ratings are up 17 percent on ESPN with a 1.4 average (1.33 million households) rating over 34 telecasts, compared with a 1.2 rating (1.19 million households) over 33 telecasts through Jan. 19 last season. The two Christmas Day games broadcast this season on ABC generated a 4.3 rating (4.9 million households) compared with a 3.3 rating (3.7 million households) over two broadcasts for the two Christmas Day games last season.
“We are still riding the wave of last year’s Finals and we are coming off Team USA in the Olympics,” said Doug White, senior director of programming and acquisitions for ESPN/ABC Sports. “There is also better performance from the Eastern Conference with teams like Boston, Cleveland and Orlando really balancing the league.”
Ratings are down 2 percent on Turner. Through Jan. 19, the NBA on TNT generated a 1.0 average rating (1.199 million households) over 25 games, compared to a 1.1 rating (1.203 million households) over 27 games through Jan. 19 last season.
Jennifer Storms, Turner’s senior vice president of marketing and programming, said Turner’s numbers weren’t surprising given some of the poor early-season games on the network.
She expects ratings to rise in the next few weeks, when TNT has better matchups in the run-up to the NBA All-Star Game, part of a longtime Turner strategy of programming marquee games to help market the midseason showcase. Turner holds the rights to the game.
“This is part of our programming and flow strategy,” she said.
Golf fashion and educating PGA of America professionals about surviving the economic downturn take center stage at this week’s annual PGA Merchandise Show, which will have a slightly smaller feel this year.
Attendance at the event, which runs Wednesday through Sunday, is expected to be down about 5 percent from the 44,500 that attended last year. The number of exhibitors this year is approximately 1,000, down about 200 from last year, primarily the result of consolidation in the industry and fewer registrations from smaller companies, said show organizers. The PGA Show is held annually at the Orange County Convention Center in Orlando.
The major golf companies are mixed in the size and scope of their efforts this year. Nike is taking part in various events but does not have an exhibit on the floor of the convention center. Callaway, which erects one of the larger exhibits on the equipment side of the show floor, is scaling back its display and bringing fewer employees.
Acushnet’s Titleist brand returns to the show after a six-year absence, and Puma is increasing its square footage. Adidas Golf has the same size exhibit as last year, though its newly acquired Ashworth brand will occupy some of the space.
The show has evolved since 2001 to become less about selling and more about product education and marketing. To that end, organizers are introducing a fashion gallery this year to allow apparel companies to present their 2009 lines. At least 22 will participate, including Nike, Puma and Adidas Golf.
Meanwhile, the educational component of the show will focus on helping PGA of America members and teaching professionals to combat the effects of the economy. Seminar subjects include financial planning, merchandising, club membership, player development and golf course management.
Those topics, said Joe Steranka, CEO of the PGA of America, are “things that are relevant in this economy so that golf professionals and their staffs can come down, get ideas, and immediately go back and get going.”
Nationwide, rounds of golf played and revenue from rounds were both flat in 2008, according to data compiled by the PGA of America. The association, which stages the PGA Championship and Ryder Cup, represents 28,000 teaching pros and serves as the steward of the golf business.
ADVERTISER NOTES Anheuser-Busch 9 ads covering 6 minutes of total ad time.An official Super Bowl game ball gets
its laces at a Wilson Sporting Goods
factory in Ohio.
Audi (R8) 1 60-second ad in 1st quarter. Agency: The Richards Group, Dallas. Bridgestone 2 30-second ads. Agency: The Richards Group, Dallas. Careerbuilder.com 30-second ads in 2nd and 3rd quarters. Agency: Wieden & Kennedy, Portland. Cars.com 1 60-second ad in 2nd quarter. Agency: DDB, Chicago. Castrol No details available. Coca-Cola Multiple spots. Agency: Wieden & Kennedy, Portland. Dennys 1 30-second ad in 3rd quarter. Agency: Goodby, Silverstein & Partners, San Francisco. Disney (Pixar) Movie Up due out May 29. DreamWorks 1 30-second ad in 2nd quarter, touting Monsters vs. Aliens in 3-D. E-Trade 1 30-second ad. Agency: Grey, New York. Fox Pictures No details available. Frito-Lay (Doritos) 1 30-second consumer-generated ad. General Electric Agency: BBDO, New York. GoDaddy 2 30-second ads; in-house production. H&R Block 1 30-second ad in 2nd half. Agency: Campbell Mithun, Minneapolis. Hyundai (Genesis Coupe) 1 30-second ad in each half. Agency: Goodby, Silverstein & Partners, San Francisco. Monster.com 2 30-second ads in 4th quarter. Agency: BBDO, New York. NFL 1 60-second ad. Agency: BBDO, New York. Paramount Movies due out this summer include Star Trek, Transformers: Revenge of the Fallen and G.I. Joe. Pedigree 1 30-second ad. Agency: TBWA/Chiat/Day, Los Angeles. Pepsi Either 2 30-second ads or 1 60-second ad. SoBe Life Water 1 60-second ad, in 3-D. Agency: Arnell Group, New York. Teleflora 1 30-second ad in 2nd quarter. Agency: Fire Station Agency (in-house group). Universal Pictures* In-house production. Movies due out this summer include Land of the Lost and The Fast and The Furious 4. * Part of NBC Universal
Note: List reflects advertisers and positions known as of Jan. 21.
Compiled by Austin Karp, SportsBusiness Daily
Source: Companies, NBC, SBD archives
The U.S. Soccer Federation isn’t exactly buying a win, but it will try to do the next best thing when its men’s national team plays rival Mexico in a World Cup qualifier Feb. 11.
Instead of playing the match in an NFL stadium, the organization will sacrifice an estimated $1 million to $1.5 million in potential gate revenue in order to play before a smaller, more supportive U.S. crowd at 24,700-seat Columbus Crew Stadium.
Five out of the last six U.S.-Mexico meetings on U.S. soil have been sellouts. A friendly at Houston’s Reliant Stadium in February 2008 drew 70,103 spectators and generated approximately $3.5 million in gate revenue.
But the game in Columbus is expected to generate between $2 million and $2.5 million. Tickets for the game go on sale Wednesday and range in price from $48 to $250.
“In the economic environment we’re in and in the pre-eminent game of the year, it’s never easy (to give up revenue), but it’s an easy decision in this case because the most important thing we do is qualifying for the World Cup,” said U.S. Soccer President Sunil Gulati. “[Qualifying for the World Cup is] so central to our mission that even if it didn’t add commercial value, it would still override all of those issues.”
The U.S., along with Costa Rica, El Salvador, Honduras, Mexico and Trinidad & Tobago, is competing in the 10-game round-robin format through Oct. 14, with the top three teams automatically advancing to the World Cup.
U.S. Soccer selects the location of World Cup qualifiers based on a series of criteria, including expected fan support, ease of travel, a solid playing surface and familiarity.
The organization reportedly weighed playing Mexico in Salt Lake City, Seattle and Columbus. Salt Lake City and Seattle were ruled out in part because the markets would mean longer flights and greater jet lag for U.S. players on European club teams. Columbus provided a shorter flight, a good playing surface, the same cold weather that U.S. players are accustomed to in Europe and a familiar environment for players.
The U.S. has played seven games in Columbus since it opened in 1999 and has never lost. It has four wins and three ties there. Because of the stadium’s size, U.S. Soccer also wields more control over ticket sales. The majority of tickets will be sold to U.S. Soccer members and fan clubs. The remainder of the tickets will be sold to the general public.
“If we play in a large stadium, it’s quite likely we’ll play in a venue with a crowd that’s at best 50-50 (Mexico and U.S. fans),” Gulati said. “That’s not an advantage for us.”
The selection created some challenges for ESPN and Univision, which are televising the game.
ESPN was expecting a game on the West Coast like in 2007 and 2008 and had reserved a 9 p.m. programming window on ESPN2. But when Columbus was selected and an earlier kickoff was set, the network had to find an alternative. It weighed putting the game on ESPN Classic before bumping a 7 p.m. Dayton-Xavier basketball game off of ESPN2 to make room for the U.S.-Mexico match.
A later game would have been more favorable for Univision, as well. Because the population of Hispanics of Mexican origin is greater on the West Coast than East, a later start could have helped Univision’s ratings.
The U.S. Golf Association will bring in $55 million over six years under a new U.K. rights deal with British Sky Broadcasting for coverage of its annual championships through 2014.
British Sky Broadcasting had aired coverage of USGA championships on a year-by-year basis for approximately 15 years, but this is its first multiyear contract. The previous financial terms could not be determined, but a source familiar with the deal characterized the new deal as bringing a “substantial” annual increase for the exact same inventory, which includes online streaming rights in the U.K.
Television coverage consists of the U.S. Open, U.S. Women’s Open and U.S. Senior Open, as well as the U.S. Amateur events. It also includes U.S.-based Walker Cups and Curtis Cups, biennial men’s and women’s team competitions pitting U.S. amateurs against those from the U.K. and Ireland.
Based on financial statements and USGA projections, the USGA’s domestic and international television fees accounted for about $40 million in revenue in 2008. The new U.K. deal gets the USGA closer to covering its annual costs of operating the U.S. Open, estimated at $50 million in 2008.
“Getting the U.S. Open underpinned (with media rights) is one of the things that is very important to the USGA in the long term,” said IMG Vice Chairman Alastair Johnson, who consults golf properties on television rights, though he did not work on this deal. It was negotiated by the USGA.
British Sky Broadcasting owns U.K. rights for the PGA Championship and Ryder Cup through 2016. The Masters and the British Open air in the U.K. on the BBC.
The Chicago White Sox are aiming to release a President Barack Obama-themed version of their cap in time for the start of spring training.
The club has developed two prototype designs of its club hat with Obama marks on the side and back. The hats have been approved by MLB Properties, and the White Sox now are awaiting a formal blessing from the Obama administration before league licensee New Era goes into production. Both designs will be made if accepted by Obama.
The White Sox enjoy a special relationship with the newly inaugurated president due to his roots in south Chicago. Should the hat happen as intended, proceeds from its sale would be donated to charities, likely ones that provide services near U.S. Cellular Field.
Retail distribution would likely be tied, at least at the outset, to official league and club channels, such as the team’s stadium store and MLB.com’s online shop, but a wider release could occur should demand warrant it.
“We know exactly what we want to do with this [hat]. It’s just a matter now of getting sign-off from Obama’s camp, going through the proper channels and moving forward,” said Brooks Boyer, White Sox vice president and chief marketing officer.
“We’re very excited. This is somebody who’s obviously a White Sox fan, but more importantly, really embraces and embodies the attributes of our brand: the notions of pride, passion and tradition we rally around. He’s made it hip to be a White Sox fan,” Boyer said.
Sales of all White Sox hats have surged 25 percent since Obama’s election in early November compared with the same period a year ago. Obama himself is not part of that increase, as club officials have tried unsuccessfully to give him a fresh replacement for an older, tattered White Sox cap he owns.
The club is devising other marketing and merchandising opportunities around its most powerful fan and have developed an area within the team’s official Web site devoted to Obama.
While team officials said there is not a concern about upsetting conservative-leaning White Sox fans, pointing to baseball’s historic role as a political unifier, they are aiming to draw a careful line about how much they do in connection with the president.
“We don’t want to be overly opportunistic and exploit this,” Boyer said.
Sports marketing executives with Chicago ties said the club’s Obama embrace did not run much immediate risk of backfiring.
“Short-term, at least, this is a very smart business play,” said Tom Fox, former Gatorade and Wasserman Media Group executive. “There’s a tremendous amount of good will around this guy right now, regardless of political affiliation. As time goes on, and his positions in office become more defined, you do run some risk of this becoming more of a polarizing thing, but not in the short run.”
After years of distribution missteps and a controversial negotiating strategy, there are signs that NFL executives are willing to take a new approach with NFL Network, which has become a rare and high-profile black eye for the biggest and most powerful sports property in the United States.
The network still is talking with potential partners about giving up equity in the network, demonstrating that after more than five years, the league is growing increasingly concerned about how to get the asset in more homes. For the last two years, its distribution has been going backward despite high-quality year-round programming and top-shelf production.
The confidential equity discussions also suggest that owners and top league executives are willing to change course on a distribution strategy that has been marked with miscalculations.
Last month, league executives met in New York City with the top brass from Fox. The two sides discussed ways Fox could help increase distribution of NFL Network, which is in 35 million homes and is set to lose 2 million homes in April when its deal with Comcast ends.
The mid-December meeting included top Fox executives Peter Chernin, David Hill and Tony Vinciquerra, as well as NFL Commissioner Roger Goodell. NFL Network President and CEO Steve Bornstein participated via speakerphone from his Los Angeles office.
The meeting touched on many of the same points as the league’s discussions with ESPN earlier in the year. The NFL told Fox it was considering giving up equity in its channel to a broadcaster that could wield more leverage with the country’s biggest cable operators. The NFL’s goal is simple: It needs its network in more homes.
As an incentive, the NFL told Fox it was considering placing more live regular-season games on NFL Network if a deal was completed — something the league believes will help in carriage battles against big cable.
Fox executives, who had initiated the talks in late summer, listened intently. They see NFL Network bolstering their cable sports portfolio and envision a scenario similar to their partnership on the Big Ten Network, where Fox owns slightly less than half of the network and was able to cut cable deals with the country’s two biggest cable operators, Comcast and Time Warner. Those two operators have kept NFL Network largely on the sidelines. Time Warner Cable does not carry the channel at all, and Comcast has relegated it to the digital ghetto, its sports-and-information tier.
Sources say executives on both sides left the December meeting upbeat and positive, but the two have not held follow-up talks and conversations are considered still in the early stages.
Meanwhile, multiple sources say the NFL’s talks with ESPN about a partnership on NFL Network have broken off completely. The sides were not able to agree on the amount of equity and control ESPN would have with the network. At one point, the NFL offered to increase the number of games on NFL Network, with the added games coming from ESPN’s “Monday Night Football” schedule, sources said. ESPN dismissed the offer and talks have not resumed.
The idea of giving up equity is a relatively new one for NFL Network, which, unlike other league-owned networks, has remained staunchly independent. For the past five years, NFL executives have believed that their league is powerful enough — and their programming appealing enough — that they don’t need help to get carriage.
But that mind-set may be changing, especially as other networks, like most notably MLB Network, have given up equity to get carriage.
Hatching the idea
Being stuck in less than 40 million homes is not what league executives envisioned when they hatched the idea of their own network.
That was in 2002, when the league was trying to figure out whether to exercise an option in its TV contracts that would terminate the eight-year TV deals that it had with ABC, CBS, Fox and ESPN.
The two executives most instrumental with cutting those original deals — NFL President Neil Austrian and executive vice president Tom Spock — had left the league by then.
In their place was Goodell, who had been named chief operating officer in December 2001, and Bornstein, whom Goodell brought into the league in September 2002 to assist on the TV strategy. The commissioner at the time, Paul Tagliabue, team owners Robert Kraft and Pat Bowlen, NFL executives Frank Hawkins, Chris Russo, Neil Glat and outside consultant Kevin Mayer made up the group that met regularly that fall on the 17th floor of the league’s New York offices.
By the start of 2003, the group decided not to exercise the option terminating the league’s broadcast TV deals. Instead, it focused on launching a league-owned channel. League executives believed, and rightly so, that NFL programming was the reason ESPN and TNT became fully distributed networks; that NFL Sunday Ticket had fueled DirecTV’s popularity; and that the NFL had catapulted Fox into being a dominant network and brand when the league moved its NFC package to the network in 1994. After years of watching other companies build equity off NFL programming, the league felt it could expand its own media asset by launching NFL Network.
Plus, worried that broadcast TV rights fees could stagnate, the group members decided that a new network — one they envisioned could grow to 70 million subscribers and eventually carry live games — would help keep those TV rights fees high and serve as a safeguard should one of the networks drop out of the bidding.
Bornstein’s past accomplishments with ESPN figured into the league’s thinking.
“Because of the success he had with ESPN jacking up those subscriber fees over the years, Steve brought a perspective that other people shared — that it would be nice to not be solely dependent on ad-supported broadcast networks,” said an executive with direct knowledge of the NFL’s plans. “You didn’t want all your eggs in that basket.”
In March 2003, owners officially approved the network’s creation, and NFL Network formally launched eight months later, in November, to about 10 million DirecTV homes.
After its first two years, the channel was a distribution success, having grown to 30 million homes and signing distribution deals with three of the top five cable operators (Charter, Cox and Comcast) and both satellite providers (DirecTV and EchoStar).
But then the league made a spate of controversial and questionable decisions. First, the league passed on a $450 million-a-year deal from Comcast and opted to place a new package of eight regular-season games on NFL Network. Second, the network nearly tripled its license fee to the cable operators. Third, it was steadfast in its negotiating posture and seen as unwilling to compromise.
These moves angered operators and stunted the growth of the network, resulting in a distrust between the sides that continues to this day.
Comcast Chairman and CEO Brian Roberts and Tagliabue were having dinner at Restaurant August in New Orleans in the spring of 2004, just six months after the NFL Network launched.
It was a warm evening in early May, and the two engaged in small talk with high-ranking cable executives at the restaurant’s bar before heading upstairs for a small dinner in a private dining room. Bornstein and Comcast COO Steve Burke also attended the dinner.
The group was in town for the cable industry’s annual trade show, and Tagliabue knew that NFL Network needed to get a carriage agreement from the nation’s biggest cable operator if it had any chance of success.
By the end of the dinner, the group had decided on the framework of a plan. Comcast would launch NFL Network on its D2 tier, which is its second-most-popular digital service.
In return, Comcast believed that it would be awarded the Thursday and Saturday night package of eight regular-season games for OLN, its network that was subsequently renamed Versus.
Comcast executives also believed that they finally would get a chance to distribute the NFL’s popular package of out-of-market games, Sunday Ticket. The NFL had exclusively sold the package to cable’s main rival, DirecTV, since 1994, but the package was coming up for bid.
Three months after that May dinner, Comcast launched NFL Network on its D2 tier, which had roughly 10 million homes at the time.
But just three months later, the NFL renewed Sunday Ticket’s exclusive deal with DirecTV for $3.5 billion over five years, which meant that cable operators would not have access to the package until after the 2010 season.
Comcast officials privately seethed. But they still believed that they had the inside track to what they really wanted, the live-game package. By getting those games, Comcast felt it would be able to increase OLN’s distribution and license fee.
Shortly after losing out on Sunday Ticket, Comcast officials say that they sweetened their bid by offering the NFL an equity position in OLN, in addition to the $450 million a year package for the games.
But in the fall of 2005, sources said Tagliabue was receiving pressure from some NFL owners who did not want to sell the rights to Comcast. Roberts’ reputation as a difficult negotiator and some of his “my-way-or-the-highway” tactics irritated owners, the sources said.
One of the defining moments that fall came as OLN launched its coverage of the NHL, coverage that was widely panned for on-air gaffes and a studio set that one newspaper described as “something assembled in a garage by a bunch of kids on a rainy day.”
Based on those early results, one influential owner called Tagliabue and pleaded with him not to entrust NFL programming to Comcast.
In January 2006, Tagliabue called Roberts and told him that the NFL planned to put the eight-game package on NFL Network rather than take the deal with Comcast.
Roberts was furious. And hurt. He never thought that he’d lose the package and was particularly peeved that the NFL spurned him in favor of its own network. Not only that, but he was angry that Bornstein was one of the NFL’s executives making the decision, since Bornstein was also in charge of the winning bidder, the NFL Network.
During the conversation, Roberts warned Tagliabue that the league would have trouble expanding NFL Network, even with the live games. According to Comcast officials, Tagliabue responded, “Sometimes the owners have to learn the hard way.”
Operators were caught off guard by the decision to put live games on NFL Network so soon, which triggered a clause in their affiliate deals that nearly tripled the license fee, from about 25 cents per subscriber per month to about 70 cents.
The rate increase emboldened operators, who used it to make a public stand against the league’s demands.
Relations quickly deteriorated from there.
The NFL pulled its signal from Charter when the operator moved the channel to a sports tier. It sued Comcast after that company moved the channel to a sports tier. It also sued EchoStar when the satellite distributor moved NFL Network to a digital tier.
NFL Network has yet to recover from those moves, and after a promising beginning, it now has deals with only two of the nine biggest
U.S.cable operators, Cox and Comcast.
While league executives refuse to this day to talk about the negotiations, Comcast executives are still smarting from what they feel was unfair treatment. But it wouldn’t be the only time that operators felt that the league was delivering mixed messages.
Turning down Time Warner
In the fall of 2006, Time Warner Cable’s Fred Dressler agreed to carry NFL Network.
At an annual cable function at the New York Hilton that November, Dressler, who headed the programming group for the country’s second largest operator, huddled with Adam Shaw, NFL Network’s senior vice president of distribution and marketing. Over drinks, the two finalized the framework of a deal that would see Time Warner launch NFL Network on analog in its markets that had NFL teams, like Dallas and Cleveland, and on a digital tier everywhere else.
As the two shook hands to cement the deal, Dressler was not convinced. He told Shaw, “I’ll do this deal, Adam. But your bosses won’t.”
Shaw, who had been trying to cut a Time Warner deal for three years, was more optimistic. He felt this was the best deal he could get from Dressler, who was soon retiring and wanted to wrap up NFL negotiations before he left.
But Dressler proved to be right.
The following week, Shaw called to say that his bosses would not agree to any digital distribution. It was analog or nothing.
In one of his last interviews before his death a year ago, Dressler recounted that exchange, saying that even though he shook hands with Shaw, he never expected the deal to close and was not surprised by Shaw’s subsequent phone call.
Shaw has since left the network and did not comment for this story.
Operators consistently point to examples like this as evidence of the NFL’s lack of negotiating flexibility. Operators are infuriated by the fact that there has been no give in the league’s position. Its offer from three years ago — 70 cents per subscriber — is almost exactly the same rate it is offering today.
The problem, according to one executive with knowledge of NFL Network’s strategy, is that the channel is boxed in and can’t afford to negotiate too far off of that 70 cents per subscriber figure.
That’s because it has to make up the $450 million that owners passed up when they decided not to sell the eight-game package to Comcast.
“The NFL had this amount of money on the table that they had forgone,” the executive said. “The NFL had to do their pricing based on what that forgone revenue was. In a pure economic sense, that’s what went wrong.”
Bornstein says that the notion that the league has been inflexible is flat-out wrong.
Without going into detail, he says NFL Network has moved off of its original demands. Sources say that the league will accept digital basic penetration instead of expanded basic analog. And NFL executives have hinted that they would be willing to give up an equity stake to a partner, something that was seen as a deal breaker three years ago.
“We continue to explore creative solutions,” Bornstein said. “What you’re asking me is can I cut four distribution deals with four gatekeepers in the cable industry. I’m always optimistic that if we continue to put out good content, we will be able to work out deals with those four guys that we worked out with 240 other guys.”
A visual success
Bornstein’s Los Angeles office gives one a feel for his flair for confrontation, as he keeps several framed quotes that bolster his hard-nosed and pugilistic persona.
One, from Shakespeare’s “Henry VI,” reads, “The first thing we do, let’s kill all the lawyers.” Another is a signed quote from Mike Tyson about everyone having a “plan” until they get “hit.”
During an October interview, Bornstein complained that the NFL Network’s distribution challenges were overshadowing other measures of its success.
“With one notable exception, which has been our issue in cracking big cable, it’s been a fabulous success story,” he said of the network’s first five years.
To underscore his point, Bornstein spoke in front of a wall of Emmy statues. Most were collected from his time at ESPN. But NFL Network was responsible for five of them, an impressive haul for a channel that’s been around for such a short period.
When the NFL decided to launch the network, owners were committed to investing heavily in its on-air look. Using many of the production values from NFL Films, not to mention much of its library, NFL Network’s programming is top shelf, with a sleek look that rivals much bigger and better-funded broadcasters.
Its Los Angeles studios are state-of-the-art, with impressive sets, quality talent and the latest technology. Across the industry, the network receives high marks for its on-air look and feel.
“They’re not going to put anything with the letters ‘NFL’ on this unless it can be the best it can be,” Bornstein said. “We won our first Emmy within six weeks of being on the air. I won my first one at ESPN eight years after being on air.”
Bornstein said ratings and viewer feedback prove to him that the programming is resonating.
“Whenever you build something, there’s … an energy that comes from the people that are skeptical of you at first, the people that ridicule you when they realize that there’s something real there,” he said. “But people really do love the content we’re putting out there. … The distributors that have us, love us.”
And the ratings seem to support him. NFL Network was the highest-rated cable network in prime time for the week of Dec. 15 with a 2.3 coverage-area rating, thanks largely to its two live games that week. One of those games, the Ravens-Cowboys matchup, pulled a 9.2 coverage-area rating, making it the fourth-highest-rated cable sporting event of the year.
Despite the NFL Network’s impressive production, many in sports business insist the league miscalculated the value of its own programming, which has prevented the network from getting full distribution.
Mark Lazarus was with TNT when it got an eight-game package in the early 1990s. He admits the NFL — and the NBA — helped TNT become a fully distributed network because operators believed that exclusive sports programming helped bring more subscribers to cable.
But Lazarus, who is now president of media and marketing for Career Sports and Entertainment, notes that NFL executives are dealing with a different environment today.
“When you think back to those years — the late 1980s, early 1990s — growth in cable homes every year was 5 to 7 percent,” he said. “We weren’t near the full distribution that we’re at today. Live, high-impact sports helped drive cable penetration.”
That kind of growth doesn’t exist today and operators are looking for other things — like equity or partnerships — to counter a mature subscriber base. And that’s where he believes the NFL has missed out.
“While sports is still one of the most precious programming commodities out there, cable operators want scale,” Lazarus said. “Distributors want and need scale in sports, not a small number of episodes.”
David Cohen, Comcast executive vice president, agrees that part of the NFL Network’s failure has been that the eight-game package is not compelling enough for operators because so much other NFL content is already available. He describes the network’s offering as “a small additional increment of out-of-market games.”
“That’s the fatal flaw underlying the NFL Network,” Cohen states. “If they put a whole season on the network, and they priced it at a rational level and they retooled the out-of-market package, then they may have a value creator there.”
The suggestion that NFL Network is nothing more than eight live games is one that makes Bornstein visibly bristle.
“Anyone who says that misses the point,” he said. “They’re not programmers or they’re not football fans. We do 365 days of quality programming and we have the viewership to support it. I don’t know what other metrics you can look at.”
Where to from here?
This week as NFL owners meet in Tampa for Super Bowl XLIII, they will again be asked about the future of NFL Network.
And as they have for the last five years, they will publicly support the concept and strategy. No fissures of discontent have developed among the ranks, at least not publicly.
In his office in the Culver City section of Los Angeles a few months ago, Bornstein mirrored such confidence. Sitting back in a leather chair, he was calm and determined as he spoke.
In looking back at the distribution battles over the past five years, Bornstein expresses no regrets and contends that NFL Network did not miss the mark on pricing. Rather, he says cable operators changed priorities over the years, and have become more focused on their telephone and Internet businesses, as opposed to video programming.
“The cable business changed on us. It wasn’t anything that we did,” he said. “They decided that they want to be telephone companies. They are concentrating on delivering high-speed data. They are concentrating on delivering telephones. They are not just video providers anymore … If you are in the business of delivering [only] video programming, we would have these deals done.”
But deals get done by communication and negotiation, and the network’s only talks these days seem to be with potential equity partners.
In fact, Time Warner Cable, Charter and Cablevision did not have any substantive talks with the NFL in 2008, sources say. The network is involved in lawsuits with Comcast and EchoStar and is not talking with those companies either.
NFL Network’s affiliate relations department, which is responsible for maintaining relationships with cable operators, also appears in disarray, losing three high-ranking executives in the past 19 months without replacing any of them.
Shaw, who headed the department, left in April 2007, and vice presidents Art Marquez and Brian Decker left in July and December 2008, respectively.
The fact that none have been replaced bolsters cable operators’ opinion that the NFL is not willing to work with them.
Bornstein, whose future at NFL Network has been the subject of speculation, dismisses the notion that the network is without a distribution plan. He also disagrees with the idea that the network needs a new approach.
During his interview, he remained upbeat about the long-term plan and preached patience.
“I’m not trying to fix something,” he said. “I’m trying to build something.”
As the talks with broadcasters like Fox continue, however, the question is whether NFL owners want a five-year-old channel to still be in a building mode.