Locker room cameras still lacking fans Forty Under 40: John Shea Forty Under 40: Pete Vlastelica Forty Under 40: Damani Leech 15 rounds with ‘Rocky’ musical NFL warms up to variable pricing Forty Under 40: Andrew Lustgarten Forty Under 40: Nate Appleman People: Executive transactions Forty Under 40: Bess Barnes
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Fox and Turner are taking an early look at the NHL’s cable TV package, raising the likelihood that the league will have a competitive bidding process — with as many as four networks — as it negotiates new TV deals this year.
Versus’ exclusive negotiating window ended in late January, leading the league to send out feelers to several networks to gauge interest in the NHL’s TV rights. The league reached out to ESPN, which held the NHL’s TV rights from 1992 to 2004, and is still engaged in talks with Versus, its current rights holder.
For the past several months, ESPN has been open about its interest in kicking the tires on the NHL’s cable package and was considered Versus’ main competition for the rights. Many NHL executives have favored a move back to ESPN. And with the NBA facing the possibility of canceling games next season, ESPN could be in the market for more winter sports on its schedule. Plus, ESPN has a history with the NHL, having launched ESPN2 in 1993 with a heavy schedule of NHL games.
Versus is expected to make a strong bid to retain the NHL, which is the Comcast-owned channel’s highest-rated programming. This will be the first major TV sports negotiation by the combined Comcast-NBC since federal regulators approved their merger last month. The league is hoping that Comcast will want to send a message that it’s serious about picking up sports rights by stepping up and keeping the NHL.
But the league’s outreach to Fox and Turner shows that it wants to build an auction process that will push the TV rights package well above the $77.5 million annual payout it gets from Versus.
Sources at those two programming groups said that while things still are in the exploratory stage, they are interested in examining the rights package further.
Fox has been looking to add sports to its FX cable channel, and many of its regional sports networks have deals with NHL teams. Turner could be interested in bringing more sports to its TruTV cable channel. In March, TruTV will begin telecasting some NCAA Tournament games.
While they’ve been happy with the production quality, some NHL executives have been frustrated with the overall visibility of Versus, which still is not available in many bars and restaurants. It also has the lowest distribution of the potential networks. ESPN2 is in 99 million homes, FX is in 96 million homes, TruTV is in 92 million homes and Versus is in 76 million homes.
As the next big national rights deal to be negotiated, the NHL is hoping that these channels will view hockey as a way to build their on-air sports portfolio. Any deal also could include the NHL’s international TV rights, which also are up.
“Looking at the next bunch of rights deals that are up, it’s the NHL, the Pac-10, the Olympics and the NFL,” said a source involved with the talks. “That’s kind of it for a while.”
The NHL is going into this bidding process with a fair bit of momentum. The league’s viewership numbers on Versus are up 13 percent this year. Through Feb. 20, Versus’ NHL games have averaged 319,000 viewers, compared to last year’s 283,000 through Feb. 9.
The NHL’s negotiating position was helped last week when it signed a $375 million deal with MillerCoors in the U.S. and Molson Coors in Canada that includes at least $100 million in committed media buys.
It’s not the first time this question has been asked over the last decade. And it’s easy to see why it comes up again.
Distributors, like Comcast and Time Warner Cable, are becoming more aggressive with local sports rights. The cable operators view local programming — like sports — as a key differentiator in their competition with satellite carriers and telephone companies. They want to launch their own RSNs in markets where they own cable systems.
Last spring, for example, Comcast swooped in and outbid Fox for the rights to the Astros and Rockets in Houston. Now, in easily the most talked about deal so far this year, Time Warner Cable did the same thing with the Lakers’ rights in Los Angeles.
Both moves involved rights that previously had belonged to Fox. And both moves show that distributors want to cut the middleman, like Fox, out of the regional sports business.
It’s not the first time the “sky is falling” claim has been attached to Fox’s RSN businesses. Nearly a decade ago, some predicted the same trend when several MLB teams started their own networks or began partnering with other distributors.
But what we’ve learned in that decade is that these deals aren’t cutting out the middleman. Rather, they are adding more expensive RSNs to cable and satellite systems across the country.
While Fox’s RSNs have taken a PR hit and lost some big-time programming assets, its RSNs aren’t going anywhere. They are still fully distributed in most markets, bringing one of the highest license fees among all cable channels. New RSNs, like the ones in Houston and Los Angeles, will have to wage distribution battles to get the carriage Fox already has.
Fox’s business model will clearly have to change; they will have to pay more to keep the rights they have.
Fox may be losing top programming assets, but it’s still going to collect its checks.
Comcast still will be paying $2.50 a subscriber a month for FS Houston, according to numbers from SNL Kagan, for at least five more years. FS Houston will collect that license fee regardless of whether it carries the Astros and Rockets. And Time Warner Cable still will be paying $2.37 a subscriber a month for FS West and $2.37 a subscriber a month for Prime Ticket (again, according to Kagan), regardless of whether FSN has rights to the Lakers or not.
FS Houston will fill its schedule with programming the Houston-area cable systems are unlikely to drop: college programming from Fox’s Big 12 and Conference USA deals, and live games from the World Series runner-up Texas Rangers and the Dallas Stars. It also has the right to carry Spurs and Mavericks games to Houston’s outer markets.
Clearly, the RSN’s programming won’t be as strong. But it still will collect the same license fees from Houston-area distributors.
Fox will use the same strategy in Los Angeles. Fox took a significant hit in losing the Lakers, one of the strongest brands in sports, starting in the 2012-13 season. But it still has the rights to the Dodgers, Angels, Clippers and Kings across FS West and Prime Ticket.
In other markets, Fox has wrapped up as many as eight long-term rights deals in the past 18 months.
Just last week, a week after the Time Warner Cable announcement, Fox signed the Twins to a long-term deal with FS North and the Suns to a long-term deal with FS Arizona.
The New York market offers a good example of what can happen when an RSN loses rights. MSG Network lost the rights to the Yankees in 2002 and the Mets in 2006. Though the lack of summer pro sports has hurt MSG’s programming lineup, it hasn’t hurt the bottom line. It’s still on every New York-area cable system.
For the past five years, the New York market has had four RSNs (YES Network, SportsNet NY, MSG and MSG Plus), which cost New York-area distributors a combined $10 a subscriber a month.
That same situation looks to be happening in Los Angeles.
It’s no secret that RSNs are a good business. Fox and Comcast executives regularly describe their regional sport network groups as the most profitable arms at their companies. That’s why so much attention is being lavished on this space.
Expect that attention — and fierce competition — to continue.
John Ourand can be reached at email@example.com. Follow him on Twitter @Ourand_SBJ.
The $43 million media rights deal that Conference USA signed with Fox last month may not be as final as the two sides originally thought.
The conference’s incumbent rights holders — ESPN and CBS College Sports — are questioning C-USA’s new deal with Fox, which was signed the first week in January.
ESPN believes its contract with C-USA gave it the right to match any offer. CBS College Sports, which has its own separate agreement with C-USA through 2016, believes it had the first crack at the package if it ever left ESPN, according to sources.
ESPN and CBS College Sports are questioning the conference’s new deal.
Conference USA spokeswoman Courtney Morrison-Archer disagreed, responding in an e-mail: “We have great respect for ESPN and have appreciated our partnership. We disagree with the assertion that ESPN was disadvantaged and are disappointed that they feel as if they were. On the contrary, ESPN had every opportunity to step up and address our concerns. Following a long and protracted discussion, the conference board of directors voted to move in a different direction. Conference USA reached an agreement with Fox on terms clearly more favorable than those offered by ESPN, and we believe the conference fully complied with its contractual obligations to ESPN.”
Relations between the conference and ESPN have become so strained that the network threatened legal action against Conference USA. Sources say that ESPN executives were angered when they were told the conference had a deal with Fox and believed that the conference had not negotiated in good faith. ESPN executives say they had an oral agreement on a new deal with the conference and were working to finalize it when the Fox deal was announced.
ESPN and C-USA had a meeting as late as Dec. 23 to negotiate final points of their potential deal, sources said. On Jan. 4, however, C-USA Commissioner Britton Banowsky called ESPN executives to say that the conference’s presidents elected to explore other opportunities. The next day, the conference announced its deal with Fox.
ESPN believed its contract mandated that the conference present it with a final offer, giving ESPN the right to match. That was never done, ESPN sources said.
Since the conference closed its deal with Fox on Jan. 5, it has spent the past several weeks talking with ESPN and Fox to see whether there’s a compromise that would allow both networks to share games, industry sources said. However, a source with knowledge of the talks offered little hope that negotiations would reopen and insisted that ESPN missed its opportunity to retain the rights.
The new contract is set to kick in with the 2011 football season and runs through the 2015-16 academic year.
Fox and ESPN executives have not met face to face. Rather, they have been making their pitches to Wasserman Media Group’s Dean Jordan, the consultant hired by Conference USA to negotiate the media deal, sources said. Jordan said last week that he could not comment and referred all inquiries to Conference USA.
ESPN, Fox and the conference, however, are no closer to finding a compromise than they were at the beginning of this process, according to those sources, and there appears to be little willingness from the conference to negotiate new terms.
CBS College Sports has not threatened legal action. But sources said the network would be placated with extra live game programming.
The Fox deal allows it to show a minimum of 20 regular-season football games. Fox picks the first 10 football games; CBS College picks the next 10; and Fox picks the final 10.
If the new contract holds up, the football championship game will be televised on FSN, Fox Network or FX. The deal also includes a minimum of 10 regular-season basketball games.
Conference USA lauded the contract with Fox at the time because it meant a nearly 100 percent increase in rights fees and that its football teams wouldn’t be playing regularly on Tuesday, Wednesday or Friday nights, as they sometimes did on ESPN. The Fox deal does call for some games on Thursday nights.
Open Sports, the online sports startup created in 2008 by SportsLine.com founder Mike Levy, has ceased operations after failing to find a sustainable niche in the hypercompetitive digital arena.
The Florida-based operation, seeking to blend fantasy sports with sports news, commentary, social networking and other material, was founded largely in the hopes of challenging established market leaders such as ESPN.com, CBSSports.com and Yahoo!. A major fantasy games partnership struck with Fox Sports in 2009 sought to further that aim, with the two entities collaborating on a series of fantasy football and NASCAR products.
ALEX GORT SR. / GORT PRODUCTIONS
SportsLine.com founder Mike Levy created the Florida-based operation.
Open Sports launched with $10 million in funding, all of it privately raised by Levy, with a secondary $4 million round raised in 2009. Levy then briefly funded the company personally early last year before a third and final batch of $3 million was raised, again privately and primarily from friends and business colleagues of Levy.
In particular, a suite of ultra-short-form fantasy football games launched last summer under the brand name Fantasy Live, some played in 20-minute increments during Sunday NFL games, failed to find a mass audience. The Fantasy Live games also proved quite expensive to create and support technically. The company created its own custom-built scoring and statistics system rather than hire an outside data vendor as is commonly done.
“It just didn’t work out. Not every one of these things do work out. It’s my blunder and I take full responsibility for everything,” Levy said. “I was never able to get professional, institutional venture funding. They didn’t think there was really room for another major player in fantasy, and that it was too late to really get traction in the space. And in retrospect, I probably should have listened.”
The shuttering of Open Sports cost about 40 people their jobs. Levy, who took SportsLine.com public in 1997 and was among the original trailblazers in online sports, said he is looking at other business opportunities but has made no firm plans regarding his future.
Fox Sports, which was a board member and equity holder in Open Sports, will look to WhatIfSports.com, the Cincinnati-based creator of online sports simulations and fantasy games it bought in 2005, as its engine for fantasy sports products. The first major new effort coming out under that realignment will be fantasy football games set to go to market this summer.
“We’re making a big investment going forward in WhatIf,” said Jeff Husvar, Fox Sports Interactive Media executive vice president and general manager. “They’re really becoming our interactive gaming division for all of Fox Sports.”
Husvar said the split with Levy and Open Sports was amicable, despite Fox’s mounting concerns toward the end of the NFL season regarding the company’s financial viability.
“There was a definite sense that it was simply the wrong time, wrong place,” Husvar said.
It still does not have a name, but Bill Simmons announced details of his new project, a website that will be 70 percent sports and 30 percent pop culture. It is expected to launch in late April or mid-May., and while it will be fully owned by ESPN, its name will not carry the ESPN brand.
“This is something that was really important to me when my contract was up at the end of last year,” Simmons said. “It’s going to have a bunch of quality writers. And it’s going to have the flexibility to have a lot of people come in and write one time a year or a couple of times a year, whatever.”
Simmons would not say whom he has hired to write for the site, other than Chuck Klosterman and Katie Baker. “We’re going to start with somewhere between eight to 12 writers that will be on staff full time and some freelance people that will be involved on a weekly or biweekly basis or a monthly basis,” Simmons said.
The free site will focus on selling sponsorships, with Simmons looking to cap the number of advertisers at between five and 10 “and make them more like partners.” He drew a parallel with the ESPN documentary series “30 for 30,” which focused on signing a few sponsors.
“They were integrated with everything we did. I feel like they were happy with how the arrangement worked out,” Simmons said. By limiting the number of sponsors, Simmons believes that the site will not become a slave to page views and a minimum number of posts per day.
Simmons also hopes to set up a network of podcasts, as his podcast, “The B.S. Report,” is the most popular sports podcast on iTunes. “We are going to have some podcasts beyond just mine. We’re going to create a couple of new ones and, maybe, have a little bit of a network.”
Walter Bernard, who has consulted on previous ESPN projects, is designing the site. “The hope is that people will go to this site, and they won’t feel overwhelmed,” Simmons said. “That’s a problem with some of the mainstream sites. There’s so much content that people have trouble trying to discern what’s worth reading and what’s worth their time.”
Online sports hub Bleacher Report has hired former Salon.com writer and sports journalism veteran King Kaufman to be its manager of writer development, the latest in a series of moves designed to boost the editorial quality on the site.
Kaufman will create a series of educational and training materials for Bleacher Report writers, as well as work directly with select writers. Unlike many of his prior stops, Kaufman does not plan to write extensively for the site.
“I’m fascinated by the ways that media is reinventing itself,” said Kaufman, who at Salon.com also co-wrote a blog on the future of journalism. “These guys are doing some really interesting things in the space.”
The three-year-old company has sought to forge a niche in its Wikipedia-type brand of open-source sports journalism. Since last summer, Bleacher Report has put into effect a more rigid and transparent set of editorial vetting guidelines, hired longtime digital media executive Brian Grey to be its chief executive officer, closed a $10.5 million round of Series C venture capital funding, become profitable on an operating basis, and instituted a structure in which some top writers on the site would be paid.
Amid all this, traffic has grown to more than 10 million unique users a month, according to measurement firm comScore. But in many corners of sports media, particularly on social media outposts, the Bleacher Report brand remains a badly tarnished one, in part because of erroneous content that has periodically appeared on the site.
“There’s still a huge disconnect out there with regard to our brand,” said David Finocchio, Bleacher Report co-founder and vice president of content. “Who we are now and who we are becoming does not match up at all with what you read in certain corners. It’s disheartening to see some guys that five, seven years ago were the very bloggers standing up for this whole new paradigm in sports media now bashing us. But the reality is that we’ve become very selective now in what we run. Less than 15 percent of our applicants are getting on the site.”
Kaufman said that disconnect helped sell him on the job. “Over time, reputations can change,” he said.
Kaufman, who also wrote previously for the San Francisco Examiner, is well-known for his acerbic and often self-deprecating style, as well as his fondness for sabermetrics and other statistical analysis.
Company executives said Bleacher Report is trying to position itself in part as a talent feeder for more established sports outlets.
The PGA Tour’s official website is launching its first ad campaign this week with a 30-second spot featuring Bubba Watson.
The Watson ad will be the first of three that will run throughout the golf season on NBC, CBS and Golf Channel. The tour will use ad inventory that’s part of its broadcast agreement with the networks. The first spot will run this week during the broadcast of the Honda Classic on Golf Channel and NBC.
The tour’s ad agency, GSD&M of Austin, Texas, came up with the creative and PGA Tour Entertainment produced the spots. The theme, “You can’t get any closer than this,” was a byproduct of research conducted with Turner Sports, the tour’s digital partner.
“We wanted to find out why people access PGATour.com,” said Lee Bushkell, the site’s general manager and tour vice president. “A lot of it was what we thought, but we wanted to put some research behind it. Mostly, people feel a connection to the league and the brand because we are the authentic source, they view our assets as the most comprehensive and they feel more connected. That’s really how we came up with ‘You can’t get any closer than this’ and that’s what we wanted to come across in the message.”
One of the website’s greatest assets, Bushkell said, is the ability to take fans inside the ropes or behind the scenes at tour events.
Each of the three spots takes actual footage from PGA Tour events and inserts fans into the action via green screen. In the spots, fans are holding mobile phones, laptops or iPads as their method of accessing the official website while the golf shots play out right in front of them. Watson’s ad is taken from his victory last year at the Travelers Championship, where he hit an approach shot to within an inch of the cup in his playoff victory over Corey Pavin and Scott Verplank.
Later this season, PGATour.com will run a promotional contest that will call for fans to edit their photo into an image and submit it on the site. The winning image will run in Sports Illustrated in May before The Players Championship.
The spots, which will also run through social media sites such as Facebook, will include footage from Camilo Villegas, Ernie Els and Tiger Woods, among others.
ESPN is completing a deal that will give it an equity stake in a new rallycross series that will include 10 races by 2013. Terms were not available.
The series, which was conceptualized by rally car driver and TV personality Tanner Foust’s manager, Brian Gale, will feature some of the top names in rally and action sports, including Foust, Brian Deegan, Dave Mirra and others. The drivers will compete in three races and then meet for a championship at the Summer X Games in Los Angeles this July.
The concept builds on the recent success of rally at Summer X Games. ESPN added the sport to its slate of action sports competitions in 2006 and has featured cars racing against each other at The Home Depot Center for five years. Rally cars careen through the stadium’s parking lot, speed over a series of bumps and a giant jump in the stadium, and race to beat each other across the finish line. Cars have flipped, crashed and launched through the air during the race, creating a spectacle that works well for spectators at the venue and watching on TV.
“From that first year of X Games until now, look what [rally has] become,” said Steve Astephen, a Wasserman Media Group principal who heads the agency’s action sports division. “It’s a sport that’s affordable, and it’s cars that people can afford and drive. Hats off to ESPN. This will be good entertainment.”
The three rallycross races that ESPN plans in 2011 will take place in Irwindale, Calif.; Pikes Peak, Colo.; and Snoqualmie, Wash. The first race will be taped and televised on ESPN2. The other two races will be taped and televised on ESPN. Initial plans show all three races following NASCAR Nationwide Series competition.
ESPN and Gale’s company, a partner in the series, plan to hold four races in 2012 plus races at the Summer and Winter X Games, respectively, and eight races in 2013 plus races at the Summer and Winter X Games.
The partners plan to sell title, presenting and associate sponsorships to the series. Those sponsorships won’t include the X Games.
At least four manufacturers will participate: Mitsubishi, Subaru, Hyundai and Ford.