First Look podcast: World Congress 2017 PBC plots path to maximize distribution NBA Turnstile Tracker Baseball returns to Kinston, N.C. David Stern investing in tech startups NBA regular season sees ratings drop Faces and Places at World Congress Are sponsors wary of outspoken athletes? On Deck With: Mike Unger, USA Swimming Labor & Agents: Rosenthal takes charge
SBJ/Jan. 24-30, 2011/MediaPrint All
Continuing its strategy to build up its online news and analysis operations, Comcast SportsNet’s Mid-Atlantic regional sports network bought two Washington, D.C.-area blogs that cover the Redskins and the Nationals.
Comcast SportsNet Mid-Atlantic picked up RealRedskins.com and NatsInsider.com for an undisclosed amount. The RSN hired the sites’ two authors, Rich Tandler and Mark Zuckerman, respectively, to report full time for the RSN’s website. They also will appear on TV occasionally.
The move follows Comcast’s strategy to acquire blogs. Last March, CSN Philadelphia bought the popular Philadelphia sports blog The700Level.com. One month later, it bought a Phillies blog called BeerLeaguer.com.
In addition to sharing content, CSN will look to sell online ads across its blogs and main local site, adding sponsorship dollars.
“It’s a growth strategy,” said Mark Lapidus, CSN Mid-Atlantic’s vice president of digital media. “We are trying to find the best journalists we can.”
RealRedskins.com and NatsInsider.com will maintain their own URLs. Much of the blogs’ content will be featured on CSN Mid-Atlantic’s website, and many CSN stories will have links on the blogs.
“The blogs are not going to substantially change,” Lapidus said. “If anything, this enables them to do more on those sites because they’re now with us full time.”
Zuckerman has freelanced for CSN Mid-Atlantic since March. Zuckerman gained notoriety last spring when, as an independent blogger, he raised money from his readers to attend the Nationals spring training. Soon afterward, CSN hired him as a freelancer.
“That got my attention,” Lapidus said. “It proved he had a following.”
He will cover both the Nats and the Caps for CSNWashington.com.
Tandler wrote his Redskins blog during his spare time, while he was working in restaurant management.
CSN Mid-Atlantic is in the process of hiring its first digital media managing editor. It recently hired Jennifer Williams from ESPN to be a digital producer.
Golden Boy Promotions will launch an international television sales department under its Ring TV brand this week, hiring NASCAR’s former director of international broadcasting to run it.
The Los Angeles-based boxing company, owned in principal by Oscar De La Hoya, will work to secure international syndication for as many as 70 of the 90 fight cards that it will produce this year for telecast in the U.S. and Mexico.
Initially, the emphasis will be on syndicating Golden Boy programming that airs on Spanish-language TV in the U.S. to networks in Mexico and selling both U.S. and Mexican programming to networks throughout Latin America. But Richard Schaefer, CEO of Golden Boy, said he sees global potential, citing one-off distribution deals that U.S. promoters frequently land with a network in a boxer’s home country.
Golden Boy opted to place the department in its Ring TV subsidiary to make it easier to land business from other promoters with similar goals, Schaefer said.
The new department will be headed by Araceli Villegas, who spent the last seven years in international sales with NASCAR.
“You look at both sports and see the global passion for both motorsports and boxing,” Villegas said. “But where NASCAR continues to grow outside the U.S., boxing already has the existing international boxers that help build that bridge to the international broadcasters. This won’t be about introducing the sport. It will be letting them know Golden Boy is now available outside the U.S.”
Eventually, Golden Boy hopes to build out distribution in Europe and Asia as well, Schaefer said.
Rights fees to beam fights abroad likely will be relatively small, less than $20,000 for most shows, Schaefer conceded. The company hopes to counter that by selling in more countries, by expanding to target video-on-demand, broadband and IPTV, and by selling undercard fights that wouldn’t appeal to U.S. networks.
“I don’t know how much revenue it is, but it’s going to be more than nothing, which is basically what it is right now,” Schaefer said. “With 70 shows, if we can get an average of $50,000 worldwide per show, that’s $3 million to the bottom line. And we’re building the exposure of our fighters and the Golden Boy brand. That’s revenue potential that has been untapped and exposure potential that has been untapped.”
In the first major personnel move since regulators approved Comcast’s acquisition of NBC Universal last week, NBC’s longtime marketing chief John Miller is moving back east to join NBC’s sports group.
Miller, the inspiration behind NBC’s famous “Must See TV” tag line, will lead a newly formed marketing and promotions group under the banner “The NBC Sports Agency.” He has been quietly working in this role since November and will be tasked with making sure that Comcast’s sports properties work together with NBC’s.
John Miller (at right) has a long history of working with Brandon Tartikoff (left) and Bob Wright.
Miller’s immediate to-do list will be to develop cross-channel spots to promote shows and sports across all of NBC Sports’ and Comcast’s channels. Miller believes that a steady stream of Versus and Golf Channel promos on NBC will help build ratings on those channels.
“With the fire-hose effect of the broadcast network, we think we can add a couple of tenths of a ratings point to our cable telecasts,” Miller said.
Miller also will oversee the marketing around the rebranding of Comcast’s sports channels, which will include new names and new logos for Versus and Golf Channel, NBC Universal Sports & Olympics Chairman Dick Ebersol said. There’s no word on what those channels will be called, but the changes will not happen immediately and could possibly be pushed into next year.
“So much goes into changing names,” Ebersol said, referring to everything from changing logos on production trucks to making sure the programming mix works.
Viewers got their first peek at the type of marketing Miller will create over the weekend, when NBC ran promos of Versus’ NHL coverage during its hockey coverage. That was a small preview compared to what Miller has planned for the NHL All-Star Game this coming weekend.
Miller will remain chairman of the NBC Universal Marketing Council. In that role, Miller has designated NHL All-Star Weekend a “cross-channel priority” for the company, something that until now has been reserved for NBC’s biggest events. That means spot promotions for the event — which is Sunday in Raleigh and airing on Versus — will appear on 19 Comcast and NBC networks and 46 Comcast and NBC websites.
Golf viewers will see similar changes next month, when NBC and Golf Channel share coverage of the WGC Accenture Match Play Championship, Feb. 23-27. NBC’s telecast will carry an on-screen logo describing NBC’s golf coverage as “Golf Channel on NBC,” Ebersol said.
Initially, the channels will not share on-air talent that much; eventually, they will. Miller will play a big part in making that happen.
Miller, who has headed NBC’s marketing department since 1985, has a sterling reputation as someone who has helped drive ratings for NBC’s shows.
Best known for coming up with the network’s “Must See TV” tag line, Ebersol sang Miller’s praises as someone who has never failed to “open a show.”
“Was there an audience the next week?” Ebersol asked. “Sometimes not. But it always opened.”
Ebersol said he jumped at the chance to bring Miller over to sports when he became available.
“We would have taken this and done a good job,” Ebersol said. “Under John, we have the opportunity to take this and do a great job.”
ESPN and Time Warner Cable have engaged in preliminary discussions that would give the cable operator an ownership stake — as much as 20 percent — in the new University of Texas channel in exchange for wide distribution throughout the state, according to several sources with knowledge of the talks.
ESPN, which formally announced a 20-year, $300 million deal to own and operate the first-of-its-kind channel last week, says it will push for the broadest possible distribution, meaning expanded basic carriage in Texas and sports tier carriage elsewhere. IMG College, the school’s multimedia rights holder, negotiated the deal for Texas and will lead the channel’s advertising sales.
There are 7.75 million cable and satellite households in the state, according to MediaCensus 2011 from Media Business Corp. Executives are tight-lipped on how much the channel’s license fee will be for the channel when it launches in September.
A deal with Time Warner Cable is essential for the unnamed channel’s distribution because TWC is the state’s dominant cable operator, with close to 2 million subscribers, according to Media Business Corp. In addition to being a UT corporate sponsor, TWC has wired the university for cable and broadband services, and it has a system that covers the state capital, Austin.
“The channel offers a compelling proposition to operators that have a significant presence in Texas,” said Burke Magnus, ESPN’s senior vice president of college sports.
The carriage negotiations will culminate a complicated three-plus-year process that saw a shift in ownership of Texas’ multimedia rights, conference realignment, and as the talks heightened, a series of high-level discussions between ESPN President George Bodenheimer and IMG Sports & Entertainment President George Pyne.
The Longhorns began discussing their own channel in April 2007, when athletic officials were approached by two private equity firms whose idea was to create the channel, get it up and running, and then sell it in five years. Texas officials were intrigued by the concept but didn’t like its short-term ownership model.
At the time Host Communications owned the school’s multimedia rights, including the TV rights for Texas events that weren’t televised as part of the Big 12’s package. Host’s CEO, Tom Stultz, agreed to represent Texas in the discussions to form a channel. He then moved over to IMG when it acquired Host a year later.
“That acquisition by IMG represented a big change in the process,” said Stultz, now senior vice president and managing director of IMG College. “When Host was doing the talking, there was a belief that we’d find a way, but when it was IMG College, there no longer was a question about whether we could do it or if the financing would work. It took discussions into a whole new stage.”
Talks for the channel picked up last summer as major college conferences realigned and Texas explored a move to the Pac-10. As those talks evolved, it became apparent that UT’s athletic director, DeLoss Dodds, was driving much of the discussion and that Texas was central to the Big 12’s salvation, all of which added to the Longhorns’ leverage in pursuing their own channel.
“Texas’ whole profile in the sports industry changed from that,” Stultz said. “The tone of the discussions changed. Anyone who was lukewarm before certainly wanted to be a part of the channel now because they understood the power and reach of Texas athletics.”
It was September when Texas and IMG College decided to partner with ESPN, choosing the Disney-owned company over Fox, cable operators and other private-equity candidates. ESPN’s commitment showed in a $300 million, 20-year offer that beat out other bids, and it committed to put all of its creative resources to work to enhance the programming.
“Let’s just say the money is there on the production side to do it the way it needs to be done,” Dodds said. “ESPN has made a full commitment on the production side.”
In fact, a clause in the contract requires ESPN to produce programming for the Texas channel that is comparable in quality to ESPN’s national networks. One option ESPN is considering is building a studio onto the end of the football stadium.
“We’re going to bring all of our experience, personnel and resources to bear to make it successful,” Magnus said. “There’s more than enough content, and we’ll have the budget to keep content fresh and diverse.”
Based on its multimedia rights contract with IMG College, Texas receives 82.5 percent of the $300 million rights fee from ESPN, or $247.5 million over the 20 years of the deal. IMG College will keep $52.5 million.
That breakdown is based on IMG College’s revenue-share contract with the school that gives Texas a larger share of the revenue as it increases. Once annual revenue hits the highest threshold spelled out in the contract — $15 million or more — the split is 82.5 percent for Texas to 17.5 percent for IMG.
IMG College’s revenue-share agreement with Texas is unlike any of its other school contracts, which pay a guarantee and then a 50-50 split of revenue once it hits certain thresholds. In other words, Texas’ cut of revenue from the channel would have been $150 million instead of $247.5 million if Dodds had negotiated a conventional contract.
IMG College also is in talks with Texas to extend its rights agreement, which has 11 years left, out to 20 years so that it’s co-terminus with the ESPN contract.
“We’ve always believed that we’re in business with Host and now IMG,” Dodds said. “We have a lot of faith in them to do the business and we have a lot of faith in our ability to generate revenue. We’d rather share in the risk and share in the good times.
“The good times are still here,” he added with a laugh.
Added Stultz: “This deal with the channel shows the beauty of a revenue-share model for the school. They’re getting much more money than if they had a traditional multimedia rights deal.”
As the talks with ESPN progressed, questions emerged over what to do with the digital rights. IMG College owns the digital rights to the official UT athletic department website, but ESPN wanted a website that would represent the network and carry part of its programming.
The rub was that many of UT’s live events already were being streamed on the official site and now they were moving to the channel. ESPN needed a website where it could promote the channel and broadcast events live if they weren’t airing on the TV channel.
IMG College will retain the rights to the official website, but it will show highlights instead of live streamed events. According to the agreement between IMG College and ESPN, the school’s official site cannot show more than two minutes of an event that’s live on the channel or the channel’s website.
IMG College also will sell all of the advertising inventory on the channel. In addition to ad units, IMG will sell title sponsorships to shows, segments and features on the channel, and it will target Texas’ corporate sponsors first. Under the banner of Longhorn Sports Network, which is managed by Scott Willingham, IMG College sells the corporate sponsorship program as well.
Advertisers will be billed by the network, and the network will pay IMG College a commission. Corporate sponsors will continue to be billed by IMG College.
“We’ll give partners every opportunity to bundle everything together so that they can make a bigger impact,” Stultz said.
IMG College is in the process of building a national sales team of 15 to 20 people who also will be involved in the selling for the network. The national group is being assembled by IMG College’s senior vice president, Lawton Logan.
It will be ESPN’s job, as the channel’s owner and operator, to hire a general manager and staff of 50 to 75 employees. ESPN wants to fill the channel’s top spot quickly, and a source said ESPN is likely to hire from within. Most will be based in Austin, while others will be in New York and some will be at ESPN’s Bristol, Conn., headquarters.
Magnus said it’s impossible “to know how long it will be before the channel is profitable, but we wouldn’t be doing this unless we thought it was a good business proposition.”
While he didn’t rule out cutting a similar deal with another school, Magnus said ESPN has nothing in the offing. “Our focus is here for the foreseeable future,” he said.
Because of Texas’ reach and following, it is uniquely positioned to launch such a channel, Stultz and Magnus said. There are only a handful of schools that could launch similar channels.
Oklahoma is in the process of forming its own channel, and Notre Dame and BYU have the kind of national followings that could position those schools to do something similar.
But teams in the Big Ten could not cut this kind of deal because of the rights held by the Big Ten Network. The Pac-10 also has made its intentions of launching a conference network clear. The SEC and ACC are encumbered by long-term rights agreements.
Despite more interest around the NFL than ever and record TV ratings for its games, NFL Network’s distribution continues to stagnate at nearly 57 million homes. The network appears no closer to cutting deals with three of the country’s five biggest cable operators than it has been for the past two years, according to cable and league sources.
Despite striking a deal with Comcast nearly two years ago — a deal league officials thought would force other operators to follow suit — NFL Network still can’t find carriage on Time Warner Cable, Cablevision and Charter.
One of the reasons for those holdups is the exclusive four-year, $720 million deal the league signed with Verizon last spring.
League executives have not had serious discussions with any of the cable operators since the fall, sources said.
The NFL refused comment for this story, citing the ongoing negotiations. Neither Time Warner Cable nor Cablevision would comment either.
Cable operator sources say the biggest obstacle remains price. In the spring of 2009, Comcast agreed to a nine-year deal that would average more than 50 cents a subscriber a month, according to sources. Though still well behind other sports networks like ESPN, which is more than $4, NFL Network’s rate makes it one of the most expensive channels on cable systems. In the fall of 2009, Comcast also launched NFL RedZone on its sports tier, which has much smaller distribution, at a cost of about 25 cents a month.
But the Verizon deal has become a significant hurdle for the remaining holdouts. Verizon has the exclusive mobile rights to stream NFL Network’s live games, plus the NFL RedZone channel on Sunday afternoons, and that is a nonstarter for many operators.
“Time Warner is not going to do deals that don’t contemplate multiplatform rights,” said one cable industry executive with knowledge of the talks. “Time Warner has made it clear that it wants to buy content all the way through the food chain.”
As an example, the executive pointed to Time Warner Cable’s ESPN deal, which allows the multisystem operator to stream ESPN, ESPN2 and ESPNU to its broadband and mobile customers.
Cable operators have been outspoken about paying for TV rights, broadband rights and mobile rights in one bundle, as part of the industry’s “TV Everywhere” initiative.
“TV Everywhere is the cable industry’s big push,” said Rich Greenfield, a financial analyst at BTIG. “Cable operators want as many rights on as many platforms as possible.”
Given the huge popularity of NFL games on TV, Greenfield is surprised that cable operators like Time Warner and Cablevision still are holding out on NFL Network, even if they can’t secure multiplatform rights.
“When you look at the importance of the NFL on TV, it seems more valuable than anything else you can put on your system,” Greenfield said.
But longtime cable industry analyst Steve Effros understands the holdup over mobile rights. He said many questions still exist about mobile viewing patterns, which make cutting deals in a mobile environment much trickier. Those types of questions, he said, have been holding up these types of deals for a couple of years.
“Nobody has a real business plan for this type of viewing, and everyone is afraid of what they don’t know,” he said. “People aren’t watching games on their cell phones and there’s not much evidence that they will.”
For cable operators, the Verizon deal feels like déjà vu. They have spent decades complaining that the NFL sells its out-of-market package, Sunday Ticket, exclusively to their biggest satellite competitor, DirecTV.
Now, the league is selling mobile content — again, exclusively — to their biggest telecom competitor. The NFL is locked into its Verizon deal though 2013, and Verizon aggressively marketed its NFL content deal in cable markets this season.
The lack of carriage casts a pall on what should have been a celebratory year for NFL Network. It has more distribution than any other league-owned network, counting nearly 2 million more homes than MLB Network. And its live game programming set viewing records in 2010.
NFL executives clearly expected more, particularly after the league signed a deal with the country’s biggest cable operator, Comcast. The lack of wide distribution in major media markets like New York City and Los Angeles, also hurts.