SBJ/May 23-29, 2011/Media

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  • The swift, sudden exit of Dick Ebersol

    NBC Universal CEO Steve Burke and Dick Ebersol were in the middle of a contentious meeting at 30 Rock last Wednesday.

    SHANA WITTENWYLER
    Ebersol’s departure from NBC Sports ended an era that spanned more than two decades.
    The two high-powered executives were negotiating a new contract for Ebersol, but there were several sticking points, one of which dealt with salary.

    The two remained far apart as the meeting ended. Ebersol told Burke that he would resign the next morning unless they could reach an agreement.

    Burke and Ebersol met the following morning, but they were no closer to agreeing on a new deal. As he promised, Ebersol, chairman of NBC Sports Group, extended his resignation, and Burke accepted it.

    Ebersol left the Thursday meeting and told his staff the shocking news. After leading NBC Sports since 1989, he was leaving 30 Rock. By all accounts, staffers were floored. None of them expected Ebersol to leave before the 2012 Games in London.

    Before Ebersol gathered the nearly 70 staffers, some Olympic producers who had earlier been told the news were seen crying. Ebersol’s longtime assistant also was seen in tears.  

    Ebersol’s message to the staffers, delivered just before noon, talked about how he “loved being a part of your life.” Once news of the resignation got out, some NBC Sports staffers became emotional, and one group of Olympic producers based in Stamford, Conn., immediately left work and went to a bar.

    Ebersol’s divorce from NBC Sports last week marked the end of an era that spanned more than two decades at the broadcast network.

    The speed of his departure was surprising. Even early Thursday, senior NBC Sports executives had no clue that the legendary TV executive had threatened to leave.

    But it was the timing of Ebersol’s resignation — less than three weeks before the International Olympic Committee will accept bids for the 2014 and 2016 Games — that sent shock waves through the sports industry.

    NBC's Current Rights Deals

    Property Length Total value Final season of contract
    Wimbledon 4 years $52 million 2011
    Olympics 2010 Winter, 2012 Summer Games $2 billion 2012
    PGA Tour 6 years $2.95 billion* 2012
    NFL 8 years $4.82 billion 2013
    U.S. Open 9 years NA 2014
    U.S. Figure Skating 6 years NA 2014
    Notre Dame Football 5 years $50 million 2015
    Kentucky Derby 5 years NA 2015
    Preakness Stakes 5 years NA 2015
    Belmont Stakes 5 years NA 2015
    NHL 10 years $2 billion 2021

    NA: Not available
    * Part of a shared deal with other networks.
    Source: SportsBusiness Journal research

    Ebersol's departure from NBC Sports ended an era that spanned more than two decades.

    Moments after Ebersol’s resignation became public last Thursday, ESPN and Fox executives went into a scramble mode. Meetings were called, as teams of executives from both companies spent hours in meetings poring over their Olympic bids. With Ebersol no longer fronting NBC’s bid for the Olympic Games, executives from both networks believed their chances to win the 2014 and 2016 rights became better, and they looked to retool their bids. ESPN and Fox executives privately believe NBC’s Olympic bid without Ebersol will be much lower than they originally expected. Comcast sources say they still plan to be a competitive bidder.

    “People will be taking a new look at their numbers,” said former Turner Sports President Harvey Schiller. “It’s probably time for other networks like Turner and CBS to take a new look at bidding. Effectively, everything is equal. Because of Dick’s relationships, everyone thought NBC had some special insights. It’s in the best interest of the IOC to make some telephone calls.”

    News of Ebersol’s resignation came as a shock to IOC President Jacques Rogge, according to well-placed sources. U.S. Olympic Committee President Scott Blackmun also was said to be surprised by the announcement, sources say.

    Executives at the major sports leagues were all caught off guard. Popular convention suggested that Ebersol might step down after the 2012 Games in London. Nobody thought he’d leave NBC before then.

    While accepting a Sports Business Award for League of the Year on Wednesday night, NHL Chief Operating Officer John Collins cited Ebersol’s production and marketing acumen as one of the reasons he was convinced his league would continue to grow. “I think Dick Ebersol and [NBC Sports and Versus executive producer] Sam Flood have a great vision for the sport,” Collins said. “The base is there. Events like the Winter Classic really help.”

    Longtime media executive Mark Lazarus will take over as chairman of the NBC Sports Group. The former head of Turner Sports, Lazarus is well-liked, well-regarded and well-connected in the sports media world. And, most importantly, he understands the cable business, and industry insiders say he is well-positioned to expand channels like Versus and Golf Channel.

    Reports of friction between Ebersol and Comcast brass consistently have leaked out in the four months since Comcast officially took over NBC and Ebersol was picked to run the NBC Sports Group.

    Ebersol raised some eyebrows early on when he fired Versus executives such as president Jamie Davis, coordinating producer Mike Baker and executive producer Leon Schweir days after assuming control of the network.

    Ebersol hinted at some of that friction during a press conference last month announcing the NHL deal. When asked to compare corporate bosses General Electric and Comcast, Ebersol said GE “so often believed in us and put enormous amounts of money out there.”

    But when he spoke of Comcast, Ebersol said: “They are looking to make sure that every aspect has been evaluated, that we’re going to make money, and I don’t ever believe I’m ever going to be let out of the building unless we can show them we’re going to make money.”

    Staff writers Tripp Mickle and Terry Lefton contributed to this report.

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  • Ratings up 32 percent for Champions League on FSC

    Fox Soccer Channel this year saw a 32 percent increase in viewership for UEFA Champions League games over 2010, its first year as U.S. broadcaster of the European soccer tournament. FSC averaged 186,000 viewers for 28 taped and live telecasts, up from 141,000 for the same number in 2010.

    Champions League also brought new advertisers to the network and became the first sports property to be spread across Fox’s six different channels: FSC, Fox Soccer Plus, Fox Deportes, FSN, FX and Fox. In December, Fox extended its exclusive rights with the tournament until the 2014-15 season.

    “When you see the results we’ve had with [Champions League] it shows why we’re picking it up for another five years,” said David Nathanson, FSC’s executive vice president and general manager. “The [Champions League] gave us a midweek fixture and gave us a vehicle to promote our weekend programming.”

    Nathanson said ad inventory for Champions League games sold out for the 2010-11 season, and that inventory for Saturday’s final between FC Barcelona and Manchester United sold out in January. That game will be shown live on Fox at 2:45 p.m. Eastern.

    “The reality is that if we had known [Barcelona and Manchester United] were going to be in the finals we probably could have charged more,” Nathanson said. “[Champions League] has broadened our portfolio and raised the quality of [advertisers].”

    Pizza Hut, Heineken and Acura came on as new Champions League sponsors this year, and Geico, State Farm Insurance, Volkswagen and Asics footwear renewed from the 2009-10 tournament. For the first time, Apple bought ad time with FSC for the Champions League finals. Nathanson declined to reveal ad revenue.

    The Champions League semifinals on FX also performed well — the April 27 semifinal between FC Barcelona and Real Madrid garnered 489,000 viewers, while 308,000 watched the May 4 game between Manchester United and FC Schalke.

    Fox will debut a new “Live from London” pregame show on Friday night on FSC, and the network will add 30 minutes to its pregame show on Saturday, beginning at 1 p.m. Nathanson said that for the 2011-12 Champions League tournament, Fox will add a live on-field reporter for UEFA matches — it now relies on reporters from the local broadcast.

    The bump in total viewership brings FSC closer to the tournament’s peak viewership on ESPN, which controlled rights to the league for more than a decade but was outbid by Fox and Setanta Sports in 2009. The 2009 Champions League averaged 287,000 viewers on ESPN. FSC is distributed in 39 million homes, while ESPN is in 99.5 million homes.

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  • Rivalry with NBC has a starring role in new book on ESPN

    John Ourand
    I didn’t know that Dick Ebersol interviewed to become president of ESPN in 1979, after he lost his job as NBC’s head of comedy, variety and specials.

    I didn’t realize that ESPN2’s 1993 launch led to one of the craziest, drunken parties in the 32-year history of ESPN.
    But dozens of stories like these make up the 745 pages of James Miller and Tom Shales’ much-anticipated book, “Those Guys Have All the Fun: Inside the World of ESPN,” which will be released this week.

    From the book: ESPN vs. NBC over the NFL

    [At the NFL’s Manhattan headquarters on April 14, 2005, Walt Disney Co. President and CEO] Bob Iger told the NFL guys that he had an offer for Monday night, but they didn’t want to hear about it, at least not then. “We’re not going to accept offers for Monday night,” [Denver Broncos owner Pat] Bowlen said. “You want to be in prime-time football, you have to be on Sunday night.” Iger said he didn’t want to do it that way, and proceeded to make a $1.5 billion offer: $1 billion for “Sunday Night Football” on ESPN, and $500 million for “Monday Night Football” on ABC. So much for ABC dumping “Monday Night Football.”

    Bowlen exploded. [New England Patriots owner Bob] Kraft was frustrated. They couldn’t believe Iger was now making a bid that Bowlen had practically begged him to make more than six months earlier. The NFL gang was so miffed, they left the room.

    While Iger agonized, [NFL Chief Operating Officer Roger] Goodell called Dick Ebersol and asked how quickly he could get over there. Ebersol was at 280 Park Ave. in 20 minutes and was spirited up by a back elevator. The NFL negotiating team asked Ebersol if he was still willing to pay $600 million for Sunday night. Ebersol said yes, and the NFL guys said, “Congratulations, you have a new football night.”


    Minutes later, Commissioner [Paul] Tagliabue told Iger and [George] Bodenheimer that Sunday night was no longer an option. … Iger had been told by at least one knowledgeable insider that NBC was in the bidding and had simply refused to believe it. Now he knew it was true, whether it made sense or not. Sunday night was gone, and only Monday night remained. And Iger knew what [the NFL’s Steve] Bornstein had known for close to two decades: he just couldn’t let ESPN go without football because it would brutally harm the brand, and more important, between 30 and 35 percent of its affiliate fees were from football. ESPN had to have football.


    There would be no more ABC “Monday Night Football.” With almost no bargaining position, a situation aggravated by the fact that Bornstein knew from eons of experience how much ESPN could afford to spend, Disney had to bid up to $1.1 billion a year for eight years to place “Monday Night Football” on ESPN’s roster.


    Ebersol: There’s no question that if ABC-ESPN had made the deal within two weeks of the time the other networks did, they would have held on to both packages, and I’d be shocked if they couldn’t have held on to it for, like, a million-four for both.


    Iger: I was feeling good that we had secured an eight-year deal for sports television’s most venerable franchise when the other TV packages went for six years. I also felt good that we had clearly strengthened one of Disney’s core brands, ESPN, and had created a new opportunity for ABC on Monday nights.


    Bornstein: I don’t want to sound smug. I was pleased with the end result of these negotiations. Essentially, the NFL got paid more money for less product. We created a new package, and we got another hour of prime-time television because NBC was going to program the seven-to-eight o’clock block promoting our sport.


    Sean McManus: We thought the break-even number was $425 million, and NBC paid $600 million. You can ask them if they’re making or losing money on it, but I know what the economics are, and I know how many more playoff games [CBS has] and what our ratings are, and I know that we generate probably 30 percent more ratings points each year.


    From “Those Guys Have All the Fun,” by James Andrew Miller and Tom Shales

    The book is comprehensive, covering ESPN in great detail from its humble beginnings to its current brand as the Worldwide Leader in Sports. The parts of the book I found most fascinating, however, didn’t come from inside the world of ESPN. They come from outside, detailing how ESPN’s rivals and league partners view the sports media giant.

    In particular, I was struck with the ferocity of ESPN’s rivalry with NBC. The book details a bitter multi-decade feud between ESPN and ABC Sports. Since ESPN shed the ABC Sports brand in 2006, it seems that NBC has stepped in to carry the mantle as ESPN’s most bitter rival.

    In a quote that is certain to make the rounds in Bristol, Conn., this week, Ebersol tells Miller and Shales, “But there’s very little that they do anymore that’s much better than some local cable operation. That’s hard to believe with all the resources they have and the army of people and all that, but nobody seems to care. That’s what I mean when I say they lost their way in terms of quality and everything else.”

    Sitting in a Manhattan café following ESPN’s upfront presentation last week, I asked Miller about that quote, and he said it reflects a real sense of competitiveness between the two sports media companies.

    “NBC and ESPN are like the Bears and the Packers. They are like the Yankees and the Red Sox,” Miller said. “They are very, very competitive with each other.”

    Miller believes a lot of that competitiveness stems from the fact that many of NBC’s top-flight producers and talent left ESPN and ABC Sports — many on less than good terms. Miller referenced people like Al Michaels, John Madden, Fred Gaudelli and Drew Esocoff. They have remained competitive with their former employer, and their former employer has remained competitive with them.

    “Those are pretty important people who left,” he said, “and I think that contributes to some of the competitiveness.”
    With NBC now overseeing Comcast’s cable sports channels, Versus and Golf Channel, the competition has become even more intense. ESPN and NBC fought over the rights to the NHL (which went to NBC) and the Pac-10 (which went to ESPN and Fox). Next month, they will be dueling for Olympic rights.

    The intense competition also can be seen during the NFL season, when NBC and ESPN compete more than any other of the league’s network partners, due to the fact that they split the NFL’s two full-season prime-time packages.

    While Fox and CBS also compete with ESPN, Miller says he doesn’t get the sense that their battles are as fierce as NBC’s.

    “One of my favorite interviews for the book was [Fox Sports Chairman] David Hill,” Miller said. “His basic premise is that ESPN is zigging and Fox is zagging. ESPN doesn’t do what Fox does. Fox isn’t going to put football on at night, because that’s going to ruin a guaranteed revenue stream for them. But on Sunday afternoon, that’s fine, they’ll do it then. I don’t think he’s upset by ESPN because he thinks they do something different. They don’t have ESPN in their sights as much. I think NBC does.”

    Miller said the leagues also are wary of ESPN’s propensity to market ESPN more than a league — something that was started during Mark Shapiro’s reign as head of programming.

    “During the Shapiro years, Mark was such a fierce defender of ESPN’s brand that if the leagues didn’t like it, tough. So he had tough relationships with the leagues,” Miller said. “[John] Skipper is a kinder, softer leader. But I still think there’s some tension there.”

    Miller also pointed out that because ESPN has more hours to fill than its broadcast competitors, it appears that it is thumping its chest more frequently than others.

    “The leagues should thank them, I guess, in the sense that it gives them more exposure,” Miller said. “I don’t think the leagues see it that way. They see it as being used.”

    John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.

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