SBJ/Jan. 31-Feb. 6, 2011/MediaPrint All
FX is ready to get back into the game.
Fox executives are looking at TNT as a model for its own FX channel, which means the network is certain to play an increasingly prominent role as Fox bids for sports rights.
Hill suggests FX will be in mix for major sports rights bidding.
Though FX stepped away from the sports world five years ago — NASCAR races made up the last regular sports programming on the network — its executives think sports can help it grow even further. Whereas sports like Major League Baseball and NASCAR once had a regular space on FX’s schedule, the only sports that can be seen currently come when games run too long on Fox’s broadcast channel.
The idea is to bring a broadcast model — with a mix of sports and entertainment — to cable, and Fox thinks TNT has the blueprint for how it would look.
TNT carries NBA games and NASCAR races, which are some of the channel’s most-viewed telecasts. Last year’s coverage of the NBA’s Western Conference Finals produced four of cable’s 75 most-watched telecasts of the year. By contrast, none of FX’s shows made that list.
Fox executives think live sports are a main reason why TNT has better distribution numbers (100 million to FX’s 96 million), higher subscriber fees (more than $1 to FX’s rate in the mid-40-cents range) and more viewers than FX.
“I always thought Fox was missing a weapon by not having a closer working relationship with FX,” said media consultant Neal Pilson, who ran CBS Sports in the 1990s.
A decision to add a major sports package to FX would mark a change in strategy from five years ago, when FX lost its NASCAR rights package and decided to concentrate on producing edgy, original programming. Hit shows like “Sons of Anarchy” and “It’s Always Sunny in Philadelphia” have helped its standing in the 18- to 49-year-old demo that Fox covets, but channel executives have long believed that it will take a high-quality sports package for FX to better compete with drama-heavy entertainment channels such as TNT and USA.
Since Chase Carey came back to News Corp. in the summer of 2009, he has put a priority on acquiring sports rights. And he has made sure that FX is part of Fox’s pitches.
FX was part of Fox’s bid to pick up the ACC’s rights last summer. And the network’s recent deal with Conference USA gives Fox the option of putting games on FX.
Hill suggested that the channel will look to pick up a bigger property to help FX in the same way the NBA helps TNT. Hill doesn’t oversee FX, but he is close to Carey, and Pilson noted that network sports executives like Hill covet cable channels like FX. “You always want the flexibility and added negotiating strength by offering multiple channels for coverage,” Pilson said.
Any move to bring FX back into the sports fold would be welcomed by sports leagues, ensuring that another well-funded bidder will help keep rights fees high.
With Comcast’s acquisition of NBC closing and Fox looking for sports to place on FX, one league executive predicted that there will be more than enough bidders trying to get the biggest sports properties.
The NFL is expected to make an extra cable package available when its next round of rights come up after the 2013 season. MLB’s rights come up after the 2013 season, and NASCAR’s in 2014. And bidding for the 2014 and 2016 Olympics is expected to start later this year. FX expects to have a seat at the table for most of those.
“What FX has proved is that in terms of the development of new drama genres, it’s done better than anyone else,” Hill said. “Maybe, the time might be right for an investment to see that as a multi-entertainment platform.”
Fox Sports is preparing to produce its sixth Super Bowl since it picked up its NFL package in 1994, and David Hill has been at the center of each of those productions. SportsBusiness Journal staff writer John Ourand sat down with Hill last week to discuss his plans for the coming game.
David Hill speaks about Super Bowl strategy.
Hill: The Super Bowl attracts people who are watching the only football game they’re ever going to watch. What we want to do is to sugarcoat the pill. You’ll be seeing stories. You’ll see a little bit about the history. Hopefully, within 10 minutes of us coming on, the group milling around the bar will sit down and watch us. That’s what it’s aimed for. But, having said that, we want the hard-core football fan to sit down and get something out of it, which is when Terry, Howie, Michael and Jimmy break it down. They are going to get the previews and what to look for.
What will we see from your production on Sunday?
Hill: [Fox Sports Executive Vice President] Scotty Ackerson starts doing his first formats on the pregame show in April. We effectively locked the show in on Sunday night [Jan. 23], while sitting around a big table in a hotel in Chicago at the end of the Steelers game. We know who the teams are. We know who we’re doing profiles on. We know what our stories are now. It’s a mixture of personalities, party and Xs and Os. By personalities, we mean not only football personalities, but personalities in the wider world.
Eric Shanks and Randy Freer recently were named co-presidents of Fox Sports. What will their responsibilities be?
Hill: It’s quite simple. Randy has been running the RSNs. Eric has been running the network. That will maintain. I expect that the decisions will be made jointly. Randy will become more involved in the network decisions; Eric will become more involved in the RSN decisions.
How did you arrive at that decision?
Hill: Any business needs to refresh itself. I’ve been here 17 years doing it. I started it. And I think any business needs to get a fresh set of eyes on it. What’s happening is that Randy and Eric have been promoted, and they will assume more of a day-to-day running of the business. I will still be involved, but in a lesser presence than I have been.
What’s the biggest growth opportunity for Fox Sports?
Hill: All of our cable assets are underdeveloped in that they are not fully distributed. For us, it’s getting all of our assets to a distribution of 100 million, so we have the broadest possible reach. That’s our growth.
Manny Pacquiao’s surprising move from incumbent HBO to challenger Showtime for his next pay-per-view fight found traction during the holidays, when his promoter, Bob Arum, vacationed in Los Cabos, Mexico, with four other couples, including CBS President Les Moonves and his wife, Julie Chen.
Arum had been prodding Moonves about getting boxing back on CBS for the last two years. Moonves showed twinkles of interest, but it never went anywhere. Most advertisers had rejected the sport, Moonves reminded him. He remained skeptical about whether it could attract a mainstream audience.
But then, on the trip to Cabo, Arum sensed a shift.
Manny Pacquiao will fight Shane Mosley in a
pay-per-view bout that will air on Showtime.
The linchpin in the deal was CBS’s carriage of an hourlong episode of “Fight Camp 360,” a four-part series that Showtime will air in the weeks leading up to the fight. CBS will air the show in prime time on the week before the fight, Arum said. CBS Sports also will promote the fight during its Final Four broadcasts, Arum said, along with airing coverage from the Friday weigh-in during the Saturday of the fight.
The bout will be only the second boxing pay-per-view produced by Showtime since 2005. Earlier this month, Showtime announced it would produce a March 12 co-promotion between Top Rank and Don King Productions, featuring Miguel Cotto vs. Ricardo Mayorga.
Pacquiao’s last four bouts — against Antonio Margarito, Joshua Clottey, Miguel Cotto and Ricky Hatton — have combined for about 4 million buys and $215 million in sales during the last two years for HBO pay-per-view. The HBO Sports “24/7” series built around Pacquiao’s most recent bout attracted an audience of about 3 million per episode, according to HBO.
The shift hinged on CBS’s ability to deliver a larger and broader audience for the “360” show and other elements that will promote the pay-per-view, Arum said. All other aspects of the deal are identical to the playbook HBO follows for its pay-per-view distribution, with 45 percent of revenue going to the pay-per-view providers and the network taking a 7.5 percent commission from the other 55 percent. As it did with HBO, Top Rank will cover the production cost of the four-episode series, anticipated to be about $1.25 million, Arum said.
“HBO does a tremendous job on the ‘24/7,’ but essentially it’s seen on a platform that has 28 million homes,” Arum said. “We had to get beyond that, and Manny Pacquiao is taking us there. He’s creating a dimension like no other boxer since Ali or maybe Sugar Ray Leonard. It’s larger than just boxing. Les recognized that.”
Moonves’ blessing set in motion a series of meetings that led to the consummation of the shift to Showtime. But the groundwork was laid about six months ago, when Arum sent Top Rank President Todd DuBoef to meet with Ken Hershman, executive vice president and GM of Showtime Sports. Because Top Rank’s premium fights long have aired on HBO, the company needed to re-establish a relationship with management at Showtime. DuBoef suggested they could do a Pacquiao pay-per-view together if CBS were in the mix. Before long, they were meeting with Showtime CEO Matt Blank.
With Showtime on board, Arum revived the idea with Moonves in Cabo. Moonves cleared executives at CBS to work together with Hershman and DuBoef on a plan, which they finalized two weeks ago during a meeting in Los Angeles. Arum said HBO Sports President Ross Greenburg made a final pitch to land Pacquiao-Mosley on the eve of that meeting, but HBO’s plan didn’t offer the reach of CBS.
Arum said he had further conversations with Greenburg and HBO Co-President Richard Plepler and does not think the move will preclude future dealings with the network, which has controlled boxing’s economic landscape for the last decade.
“It was a business decision,” said HBO spokesman Ray Stallone, “and we move on.”
Fox Sports’ online experiment “Lunch With Benefits” is beginning to pay off for some of Fox’s TV channels.
Fox Sports began moving some of the more popular FoxSports.com shows to its TV channels earlier this month. It started showing the online comedy series “Cubed” on Fuel on Friday at midnight. After its first few episodes on Fuel, it has become the channel’s top-rated show, according to Fox Sports Media Group’s Chairman and CEO David Hill.
“‘Lunch With Benefits’ has evolved into a laboratory,” Hill said. “‘Cubed’ is now existing very happily in a traditional linear broadcast platform.”
The success of “Cubed” on television has persuaded Fox to try out some of its other online shows on TV. It’s planning to move “College Experiment” to Fuel and “Coach Speak” with Brian Billick to Fox Sports Net over the next few weeks.
All the shows will remain part of FoxSports.com’s “Lunch With Benefits” programming block that unveils new shows every day at 1 p.m. ET, which Hill says continues to serve its purpose.
Fox launched the block of online video programming in December 2009 as a way to increase user engagement on FoxSports.com. Through Fox’s deal with MSN, Fox Sports stories were featured on MSN’s home page. That meant lots of clicks from casual sports fans interested in a specific headline. But it also meant much lower levels of engagement — those users didn’t stay on the FoxSports.com site for any substantial length of time, which made it especially difficult to sell advertising around it.
“We were not a basis for browsing, but were a curiosity satisfier,” Hill said. “That was what I had to change dramatically.”
Hill decided to put a TV-style schedule of video programs on the website — a new one uploaded every weekday at lunchtime. The series starred Fox Sports’ on-air personalities like Jay Glazer and Billick. They also tried to develop new stars, like the cast of “Cubed,” which Hill created as a “new kind of talk show.”
The result is that the average time users are spending on FoxSports.com has gone past 8 minutes a session. And it’s opened Hill’s eyes to the possibilities of Internet video. “It proved that people actually watched,” he said. “It gets back to everything: how compelling it is and how much time they’ve got to watch.”
In the near term, Fox Sports is going to stick with its “Lunch With Benefits” plan online. Hill doesn’t have any plans to produce events online, at least not immediately, or to roll out dedicated broadband channels.
“I’d love to have a crystal ball and look 10 or 15 years ahead and see if that is a business,” he said. “I don’t believe you can sustain it with a traditional advertising model. It has to be subscription. Therefore, you have to ask yourself, If I’m prepared to pay X dollars per month for a magazine, am I prepared to pay, as an individual, X number of dollars for a broadband channel? If so, what is that?”
Hill said Fox would continue to experiment with producing online video, but he said television production will continue to be the main priority for the foreseeable future.
“We are in a period where I don’t think anyone has a clue where it’s going to go,” Hill said. “I will tell you that television as we know it is going to be around for an awfully long time. I cannot see that changing at all. If you don’t believe that, the one business that should have gone away is radio. Radio’s not as profitable as it was. Television is probably not going to be as profitable. But watching entertainment is a passive activity. It’s not consumed through mobility. It’s sitting down and watching on the biggest screen you can with the best audio you can.”
The story line is irresistible. You have a cable company that watches every penny taking over a broadcaster that doesn’t. The potential for salacious stories is limitless.
It was, after all, this same type of story line that got the most play after the two biggest media mergers of the past 15 years: when Disney bought ABC in 1996 and when AOL and Time Warner merged in 2000. As late as 2006, when ABC broadcast its final Super Bowl, there were still gripes about longtime ABC employees booking five-star hotels while ESPN employees were parked at the local Marriott. Similarly, Time Warner executives were quick to complain about the upstart AOL executives and all of their perks.
These kinds of stories have been making the rounds long before Comcast’s NBC acquisition was formally approved this month. I started hearing them, literally, as soon as news leaked that Comcast was acquiring NBC. In these stories, Comcast and NBC always play the same roles: Comcast is cheap; NBC throws its money around.
For example, earlier this month, former New York Times reporter Sharon Waxman, who now runs TheWrap.com, reported that, “At the recent CES conference in Las Vegas, [Comcast Chairman and CEO Brian] Roberts was spotted standing in the taxi line even as town cars and limos with NBC logos went cruising by.”
For me, this angle has serious business implications. Take Comcast’s all-sports channel Versus, for example. Most of its original programming is not memorable. The shows, like the short-lived “Fanarchy” and “The Daily Line,” were produced cheaply, got anemic ratings and had scant advertising support.
But outside of Comcast’s regional sports networks, Versus is Comcast’s most profitable channel. It doesn’t look pretty at times, but it makes money for Comcast.
NBC, on the other hand, is coming off a Winter Olympics where it lost $200 million. As with all of Dick Ebersol’s Olympic productions, the Games were a critical success, but they didn’t make money.
How would Comcast view a $200 million loss? That could buy a ton of set-top boxes.
So the question is, How will these two cultures work together to remake Versus? Is it possible to improve its on-air look without spending a lot of money on it? Or does Comcast finally have to spend money on production to make money on ad sales and sponsorships? That’s one area where I’m looking to see how the clash-of-culture wars are happening.
Several executives who have been part of major media mergers over the past two decades say that too much ink is wasted on these types of stories, but they acknowledge that the stories are popular and expect reams of them to appear over the next few months.
Lou Borrelli, who was a senior AOL executive during its merger with Time Warner and has worked in the cable industry since the late 1970s, said the big mergers that work are the ones that try to assimilate both cultures.
“The question you should be asking is, can they allow the best of the two cultures to coexist,” he said. “What is the plan for maintaining the best of the performance cultures?”
Another problem with the clash-of-cultures story line is that it relies on stereotypes, like Comcast is cheap, Borrelli said.
“Comcast has not gotten where they are by saying no all the time,” he said. “People mistake good financial control and discipline to an unwillingness to invest.”
Borrelli pointed to Disney’s acquisition of ABC as a good model to follow. The fact that the deal was struck in 1996 and there’s still some tension between the broadcast and cable sides shows that there was an effort to assimilate both cultures, even if it’s clear that Disney/ESPN’s culture is the dominant one.
I couldn’t get anyone from ESPN or ABC to speak on the record for this column. There’s still a lot of lingering resentment and bruised feelings on both sides.
But the ones who did speak said it’s too easy to get wrapped up in the culture clash. The key is to have strong senior management dictating a corporate strategy while allowing for the two cultures to coexist.
“With Disney-ABC and Comcast-NBC, they have excellent management on both sides of the ball,” Borrelli said.
John Ourand can be reached at firstname.lastname@example.org. Follow him on Twitter @Ourand_SBJ.
Red Bull is launching its own North American media company that will specialize in producing and distributing content and TV shows that showcase the company’s robust roster of athletes and events.
The media company will be known as Red Bull Media House North America and will operate out of Red Bull’s offices in Santa Monica, Calif. It will be led by general manager Werner Brell; Scott Bradfield, director of moving images and content development; and Greg Jacobs, head of distribution, who was recently hired away from the NASCAR Media Group.
Bradfield and Jacobs said Red Bull Media House North America will produce and distribute action sports and lifestyle content for digital and linear networks throughout the U.S. The ultimate goal of the group is to significantly expand Red Bull’s presence on TV.
The energy drink company already has a track record of success in that area, producing the “Red Bull: New Year. No Limits” events for ESPN, “Project X” about Shaun White’s private halfpipe for NBC, and Red Bull X Fighters programming for Fuel TV.
Red Bull Media House executives now hope to generate new programs with more mainstream appeal such as reality TV shows around athletes. They hope to place that programming on networks they haven’t worked with in the past, which could include anyone from Versus to National Geographic.
If successful, Red Bull Media House North America will provide another stream of revenue for the energy drink company and further the company’s marketing and brand association with bold athletes and daring sports.
“We have access to athletes and cool events that other corporations don’t have the access to or authenticity with,” Jacobs said.
Bradfield added, “One of our calling cards is we’re an authentic brand in that [18- to 34-year-old] demographic. As we reach into new networks, we can bring that fan base along and help the networks grow in that demo.”
Red Bull Media House North America is an extension of an operation the company already established in Europe. The company developed the first Red Bull Media House in Austria in 2007, and today more than 400 employees work for it worldwide.
The North American operation will be the company’s first offshoot of the European group. It will have 60 employees, most of whom already work for Red Bull, and Bradfield said he expects the organization to expand over the next 18 months.
“If you want to be successful in this [media] world, you have to be successful in the U.S.,” Jacobs said. “That’s what we plan to do.”
The fast-reviving realm of athlete websites has gained another new entry with the arrival of SportsBuzz.com.
The Virginia-based portal, operated by Buzz Networks LLC, soft-launched in November but this week is preparing to launch an expanded model that will offer a mix of free and premium content. The core, subscription-based athlete-generated content will be supplemented by free material that includes videos, blog postings, photos, personal updates and tweets.
SportsBuzz.com has about 40 athletes in its portal, most notably Washington Redskins tight end Chris Cooley, New Orleans Saints running back Reggie Bush and Philadelphia Eagles wide receiver DeSean Jackson, and is an official licensee of the NFL Players Association. The site is developing similar relationships with hockey and basketball players and their unions, with several new deals likely to be signed in the coming months.
SportsBuzz will take an active role in helping its athletes produce original content.
SportsBuzz.com is seeking to differentiate itself by taking a highly active role in content creation. The company has positioned staffers in several major cities to be near the athletes in its portal to help develop original content, shoot video, and aid in their overall outreach through the site.
“Fans want to be as close as possible to their favorite athletes, but it’s still not easy for the guys to put themselves out there, even within social media,” said Paul Hourigan, Buzz Networks’ chief operating officer. “We want to ensure we have the best quality content we can, so for us that means working directly with the guys and helping them develop great ideas.”
The company was co-founded and is led by Ray Cohen, who was chief executive of TravelClick before selling that company in 2007 to GenStar Capital for $300 million. SportsBuzz.com subscriptions begin at 79 cents a month, per athlete. Individual athletes then participate in revenue-sharing agreements based on the number of followers they attract.
Subscription plans also include a fan mail component in which athletes will receive online letters directly from fans.
“This is a really unique opportunity for athletes. I think it’s moving toward what athletes will be doing in the future,” said Cooley, who before SportsBuzz.com’s creation was already drawing up to 15,000 unique users a day to his popular and irreverent blog. “It’s tough for players to really be themselves in conventional media. But here, if you make a faux pas, it’s just edited out.”
Atlanta wide receiver Brian Finneran is among many players in the SportsBuzz.com portal who previously had no presence in social media or anywhere else online.
“I really wasn’t doing anything before,” he said. “But they’re putting in a lot of time with the teams and players to build relationships, build content. They’ve made it very easy for people like me.”