SBJ/September 19-25, 2011/MediaPrint All
TV networks are continuing to ride the auto category to unprecedented ad sales success around sports programming.Fox and Turner have sold out most of their postseason baseball inventory at rates more than 10 percent higher than last year. As with other sports events on TV, both networks say autos represent their strongest category.
Virtually no ad time remains for the first four games of the ALCS and World Series on Fox, network executives say. Some ad time is available in later games, if they need to be played. Network executives say they approach every MLB postseason this way and don’t expect any problems selling that time.
Chevrolet is sponsoring the pregame and postgame shows on Fox. With the ALCS this year, Fox is in line to carry the highly rated Red Sox-Yankees series if both teams advance to the championship series.
MLB is running a “Legends Are Born in October” campaign this year as it enters the postseason. Fox and Turner report strong sales for games they will broadcast in the playoffs and World Series.
Turner said it achieved near sellout levels last week for its ALDS, NLDS and NLCS games on TBS. It still has ad spots available in later “if necessary” games and online. It, too, is pacing well ahead of last year.
“We’ve seen a strong demand from the auto business,” said Jon Diament, Turner’s executive vice president of ad sales and marketing. “You’ll see a lot of auto commercials with us.”
Turner sold a sponsorship package to Audi, which is a new advertiser. The package will see Audi sponsor vignettes around the “Achieving Greatness” theme.
It also signed Dodge/Chrysler to sponsor the pregame show “On Deck.”
TBS also signed Captain Morgan to sponsor the postgame show “Inside the MLB.” The show also will be available online via Yahoo! Sports (www.sports.yahoo.com/mlb).
Diament would not speculate about whether MLB attracted some advertisers concerned about the NFL’s lockout. “The key factor is that these dollars are fourth-quarter dollars,” he said.
With 24-hour channels like Versus (to be renamed NBC Sports Network in January) and Golf Channel, NBC Sports Group has started taking steps to chip away at ESPN’s sports media dominance. It launched a block of studio programming on Versus every weeknight, starting at 6 p.m. ET, and NBC aggressively has sought to pick up sports rights, outbidding ESPN for the Olympics and NHL rights.
It’s clear that ESPN executives recognize these competitive threats and are taking steps to address them. One of the challenges NBC faces as it tries to chip away at ESPN is that ESPN is not sitting still and is looking to expand all of its platforms.
“We’re going to try and get in front of the heat,” said ESPN’s executive vice president of content, John Skipper. “I hope I can reverse the heat.”
The network’s recent NFL deal illustrates what Skipper means. The $1.9 billion per season deal has as much to do with highlight rights as it does with live games. In fact, during an interview discussing the new deal, Skipper never mentioned the live “Monday Night Football” games or the eight consecutive Pro Bowl games ESPN will carry.
But Skipper talked at length about the new, and expanded, studio shows that ESPN and ESPN2 already have launched as a result of the NFL deal. ESPN expects to produce 500 new hours of studio time each year that will be focused on highly rated NFL programming.
It hardly seemed like a coincidence that ESPN launched its new shows the same week that Versus started its “NBC SportsTalk” series.
“My goal is that if they announce five new hours a week, I’m going to announce 10 new hours a week,” Skipper said. “We will compete vigorously for the eyeballs that we currently have right now.”
That was the strategy ESPN used earlier this month after Versus launched five hours per week of “NBC SportsTalk,” plus a sports business studio show. Last week, Versus also launched “NFL Turning Point,” a co-production between NFL Films and NBC Sports Group.
ESPN responded with up to four new studio shows that have launched so far. Most of the shows were created through the highlights package that was part of ESPN’s NFL deal. That package allowed ESPN to build up the studio programming schedule across ESPN and ESPN2, something Skipper said was a priority.
ESPN2 launched “NFL 32,” hosted by Suzy Kolber and Chris Mortensen, on weekday afternoons, and “NFL Kickoff” on Fridays. The added hours of NFL programming on ESPN also will see ESPN2 pick up Jim Rome’s show. ESPN2 launched two other shows, as well: “Numbers Never Lie” and “Dan Le Batard Is Highly Questionable.”
“I’ve got the four best products for sports news and information on sports television,” Skipper said, referring to ESPN, ESPN2, ESPNews and ESPNU. “We’ve been on a mission to improve the quality of our live news and information on all of our networks.”
But while one may wonder whether an over-reliance on NFL programming might dilute the impact of those shows, executives across the networks aren’t concerned. They all feel that the glut of new NFL programming will not hurt ratings, citing the popularity of live NFL games.
NFL shoulder programming also rates well. For example, the regular season’s first “NFL Countdown” attracted 2.414 million viewers Sunday morning, good enough to place in the top 200 for all cable shows last week. It was ESPN’s fourth most watched show of the week, out-rating such mainstays as “Pardon the Interruption” and “Around the Horn.”
“NFL programming rates great,” Skipper said. “When we do ‘NFL 32’ in the 6 to 7 p.m. slot on ESPN2, we will see a dramatic uptick in ratings from what we had there before. It’s a pretty insatiable demand for quality NFL product. Fans really, really care.”
The highlights package expands beyond studio programming. It will allow ESPN to use more NFL footage to create documentaries for its “30 for 30” series.
“We were very pleased that people seem to understand that the deal we do is dramatically different from the deal somebody else does because of all of our platforms, all of the networks and the amount of NFL product we have,” Skipper said. “The 17 games are the showcase, but the day-to-day stuff is just as important to us.”
John Ourand can be reached at email@example.com. Follow him on Twitter @Ourand_SBJ.
The Big Ten Network has signed a multiyear deal with the CBSSports.com College Network to create the Big Ten Digital Network, a portal for official websites of 11 of 12 conference schools as well as for the conference and network themselves.
Before the deal, the Big Ten Network and individual schools had managed their digital rights separately, and fans were generally required to buy two separate content subscriptions if they wanted to see all available live games online from a particular school. Now, one joint Big Ten Digital Network subscription, priced at $14.95 a month or $119.95 a year, provides access to audio and video from all 12 schools and more than 500 live events a year not televised by the TV network. BTN.com, a site held by the Big Ten Network, has been redesigned and will serve as the hub for the new digital alliance.
Other major conferences are going through similar exercises to centralize their digital rights. The SEC partners with XOS Digital for the SEC Digital Network. Schools in the Pac-12 are turning over their digital rights to the conference beginning next year. A new digital platform, part of the conference’s evolving in-house Pac-12 Enterprises, will carry live games and other content.
The ACC is also working on a digital network with Raycom Sports to make all of its live streaming events available through one portal. The ACC tried a similar move in 2006-07 with ACC Select, but that effort died quickly because member schools wanted live events to drive traffic to their own sites as opposed to ACC.com. Now, the trend continues to move in the other direction.
There will be a significant advertising component in the pact as sponsorships will be sold across the entire digital network. The individual schools, Big Ten Network and CBSSports.com College Network will share in advertising sales, and be able to sell across the entire network. Financial terms were not disclosed, but the subscription and advertising revenue generated through the new alliance will be shared among the involved parties.
The one element not included in the network is the official athletic department site for the University of Nebraska, huskers.com. Nebraska, in its first year with the Big Ten, is aligned with NeuLion for management of its website. CBSSports.com intends to pursue those rights and bring the school fully into the network once the current deal expires in 2013.
Before the deal, CBSSports.com had been managing the official sites for nine Big Ten schools, and then aligned with Ohio State and Minnesota in June to get up to 11.
“We’ve now got a situation where we can really leverage the network’s and the schools’ audiences and offer much more choice and much more value to both fans and advertisers,” said Rob Schupler, CBSSports.com College Network senior vice president of university sales and marketing.
The Big Ten Network is 51 percent owned by Fox, but officials for the channel said there was no issue with striking such a deep partnership with a division of rival outlet CBS. Fox Sports Interactive Media is not heavily involved in the hosting and management of college athletic websites.
“This is about doing what’s best for the network, and everybody involved is on board with that,” said Big Ten Network President Mark Silverman.
Staff writer Michael Smith contributed to this report.
ESPN is hitting back against critics who publicly accused the media company of wild, indiscriminate spending with its eight-year, $15.2 billion deal to extend its rights to “Monday Night Football.”
Sean Bratches, ESPN’s executive vice president of sales and marketing, said he fielded calls earlier this month, shortly after the deal was announced, from several video distributors who expressed concern over the nearly $2 billion annual price tag. He said he allayed their fears that ESPN would seek to fund the deal through increases in their affiliate fees.
But some critics took their concerns public last week, pointing to ESPN’s NFL deal as an example of a sports rights landscape that is becoming too expensive for the average fan. Matt Polka, who heads an association of small cable operators, publicly called for Congress to take a look at the cost of sports rights. Polka complained that consumers ultimately would have to pay for the contract through higher cable fees.
“We’re accustomed to his refrain,” Bratches said. “It’s unfortunate that these types of allegations are made without any conversation with us to explain the thought process behind our investment.”
Financial analyst Craig Moffett of Bernstein Research also questioned the size of the deal, concluding that “sports fans are overwhelmingly being subsidized by non-sports fans,” and suggesting that an opportunity exists “for an entertainment-only offering, at half the price of a sports-included offering.”
But Bratches said the distributors who contacted ESPN don’t share those same fears. Bratches promised that ESPN would not try to force them to pay an “NFL Tax.” He also explained how much more TV, broadband and mobile content ESPN was getting through this deal. On TV alone, ESPN is planning to roll out 500 new hours of NFL-related studio programming, which is the highest-rated programming on TV. In 2010, for example, 17 ESPN-produced NFL games made the list of cable’s 20 most watched shows.
Executives from several large distributors confirmed Bratches’ account and said that they were not alarmed by the size of ESPN’s “Monday Night Football” deal.
At $4.69 per subscriber per month, ESPN already is the most expensive channel on cable systems. TNT is a distant second, at $1.16, according to SNL Financial. At that rate, even a small percentage increase would represent big bucks to distributors.
“There is no NFL surcharge, and we’re not seeking to negotiate one,” Bratches said. “The consumption of sports continues to grow on TV and all platforms. This is the last bastion of live programming, making it valuable to many networks. We’re confident that the price-value dynamic is in line.”
Interviews with executives from three of the biggest distributors suggest that ESPN’s NFL price tag was expected and is not a huge concern. These executives said they are satisfied that ESPN does not make its content available for free on mobile or broadband platforms, as only authenticated subscribers can watch ESPN content on digital platforms. Distributors also control up to 40 percent of ad inventory during “Monday Night Football” games, which translates to significant ad sales revenue.
Even if distributors weren’t satisfied, they would have little recourse. It would be a huge risk for any distributor to drop ESPN because they don’t buy ESPN as an individual channel. It’s part of a bundle of channels that includes all the ESPN and Disney-branded cable channels and the ABC broadcast network. If a distributor tries to say no to ESPN, it would have to do without all of Disney’s channels, which gives ESPN protection against any distributor trying to shed its sports channels.
“The size of the NFL contract is notable because this is the most expensive content on television at a time when consumers are seeing increased pressure,” said David Bank, managing director of global media and Internet research for RBC Capital Markets. “But I don’t stay up late worrying in the near term that the push back will amount to much. For distributors, it’s not about losing just ESPN. It’s about losing the entire Disney package.”
Reaction from financial markets also has been muted. At deadline, Disney’s stock was up slightly in the week following the NFL announcement. And, perhaps most importantly, there’s been no outcry inside the Beltway from Congress or regulators.
While this increase from the average cost of the current contract ($1.1 billion per year) to the new one ($1.9 billion per year) is more than 70 percent, Credit Suisse analyst Spencer Wang said the actual annual increases are just 6 percent.
“This implies a neutral impact on our margin assumptions and to the extent that ESPN can grow revenues at a faster clip, we still see the opportunity for longer term margin expansion,” Wang wrote in a research report.
Yahoo! Sports is turning its scale into engagement, says Ken Fuchs.
■ At a high level, where do you see Yahoo! Sports going right now?
FUCHS: It’s been 41 months straight as of [last week] we’ve been No. 1 [in traffic]. It’s coming up on four years. There’s incredible momentum, and I think what’s really interesting is we’ve had this scale play of more than 50 million users for a while. And what we’ve started to do with the business is turn that into tremendous engagement across the site. That starts with the pillars of fantasy, investigative journalism, Rivals.com, video, and now we start to build on what we’ve done. There’s tremendous opportunity still, and we’re incredibly excited about the year we’ve had to year to date, and looking forward to next year and all the events coming up, like the Olympics. This is a story that goes beyond scale. The engagement story is one on which we’re just beginning to turn on the jets.
■ What did the Miami story, and some of your other investigative scoops, do for the site, particularly with regard to the Yahoo! Sports brand?
FUCHS: It’s one of a series of stories and products that we’ve rolled out that have really helped set Yahoo! Sports apart. If you look at the authenticity, the credibility, the thoroughness and the trustworthiness that we’ve generated through stories like this, it’s amazing. The Miami story generated thousands of media mentions, tens of thousands of Facebook likes, thousands of tweets. The penetration level of that story I believe was truly unmatched. You can see the reaction from our peers in terms of what we really accomplished with that story. You’re talking about an entire year spent investigating. The thoroughness of it. It also set a new bar for how you do investigative journalism online. You think about the story they told and then the product we built with all the player pages, almost a hundred player pages for every single person involved, all the multimedia we put in there. So you had to come to Yahoo! Sports to get that story, and not just have it repurposed elsewhere. You cannot tell that whole story through other mediums. It was a perfect intersection of how the Web can inform investigative journalism in really interesting ways.
■ You’ve been operating without any sort of full live game rights, unlike many of your key competitors such as ESPN, CBS and the league sites. Is that a detriment to you, and if so, how? Is that something you think Yahoo! Sports needs?
FUCHS: I don’t think so. I think we’ve proven that you don’t need full game rights necessarily. That doesn’t mean that ultimately we may not want to explore interesting products that are unique to Yahoo! users and enhance the experience. “MLB.com Full Count” is a great example of developing something new and innovative that brings the best of linear television to the Web in a way that you can’t do on TV. The ability to infuse a product with social media, real-time decision-making on where to go, user controls in a really highly caffeinated, engaging way on the Web is transformative. So there continue to be opportunities to do things that are different. And we have fabulous relationships with the leagues, and we’ll continue to work with them on ways to bring their content in front of our 50 million users.
■ What is the biggest misnomer or misunderstanding as to what Yahoo! Sports is, and what the Yahoo! Sports brand is?
FUCHS: It’s interesting to see how much [the brand] has changed in the time I’ve been in this space. Yahoo! has traditionally been known as an aggregator, and what we’ve done really well over the last several years is develop our original voice, the notion of “only on Yahoo! Sports.” What you see is that we are changing as to who we are, and it’s starting to pick up in terms of the recognition of that.
■ What have you seen lately with fantasy football? There’s a notion with many of your competitors that the NFL lockout was perhaps the best thing that ever happened to them because it compressed the offseason and ultimately heightened fan interest.
FUCHS: We saw 26 days of six-figure registrations. You get a sense of our scale on that. And overall, we grew 15 percent year over year on registrations. You look at the fact that we’re far and away the No. 1 player in the space in terms of scale, to grow double-digit percentages like that, to have that level of interest is absolutely phenomenal. Having that compressed time frame did renew the [fan] passion. You had free agency happening every single day. News happening every day. News that we were breaking. It all happened so quickly, but happened with such a force.
The NFL’s decision to hold off on awarding a new TV package for at least a year surprised TV network executives, who originally believed the league was one or two months away from cutting a deal.
“I was shocked,” said one network executive. “I really thought that would be the next deal that they would do.”
Up to four TV networks were having informal talks with the NFL about a new Thursday night package of eight games during the first half of the season. The package of games was never officially on the market. The NFL started the informal conversations to gauge interest in the package. But several network executives were expecting talks to heat up as soon as the league finalized its “Monday Night Football” extension with ESPN.
NFL Commissioner Roger Goodell squashed that idea Sept. 8, during a press call announcing the league’s $15.2 billion extension with ESPN. Goodell said that rather than coming before the NFL extends its broadcast deals with CBS, Fox and NBC, any new eight-game package still was a long way from reality.
“It’s not likely that we would do it in the next year,” Goodell said. “We’re going to continue our discussions with our current partners and evaluate aspects of our new labor agreement as part of that. [We’re going to] make what we expect to be the best decision for our fans, for our 32 clubs and for our partners.”
That means that the league will renew its broadcast packages, which expire at the end of the 2013 season. League and media sources expect each of those packages to command more than $1 billion a year in their new contracts and come close to the 73 percent increase that ESPN agreed to pay.
A league source said the decision to wait a year before awarding the new eight-game package is partly a result of the NFL’s decision not to increase its schedule to 18 games.
With an 18-game schedule, the league would have enough new game inventory to create a new TV package. The only way to carve out a new package with a 16-game schedule would be to take games away from CBS and Fox’s current packages, which could be problematic as the league goes back to those networks in renewal talks. Because of this, a network source said the league would not launch a new TV package until 2014 at the earliest, once its new TV deals take effect.
The proposed eight-game package already has drawn a lot of interest from cable channels, who view highly rated NFL games as the surest way to increase distribution and affiliate fees. The NFL has had informal conversations about it with Comcast, ESPN, Fox and Turner. Comcast is interested in putting the package on Versus, which will be renamed NBC Sports Network in January; Fox is kicking the tires for FX.
Goodell started having initial conversations about the package soon after the league’s labor situation was resolved. The idea was to add eight early-season Thursday night games to complement NFL Network’s eight-game package during the second half of the season. Sources suggest the NFL could command around $700 million for such a package.
One idea that had been discussed involved the future of the NFL Network. The league was considering giving up management responsibilities or an ownership stake in the network. Turner uses this model in its NBA contract; Comcast uses it with the NHL.
The ACC’s football syndication package has expanded into 40 new markets this season, including such faraway locales as Los Angeles, San Francisco and Denver.
Those new markets give ACC football more exposure than it’s ever enjoyed in its longtime relationship with Raycom Sports, which syndicates the games for the league.
Raycom has held the conference’s syndication rights since 1982. In the ACC’s new 12-year, $1.86 billion TV agreement, which kicks in this season, ESPN owns all of the media rights, so Raycom must sublicense games each week from ESPN to syndicate.
Danielle Trotta and Tommy Bowden host Raycom’s studio show for the ACC Network, now seen in non-ACC locales such as Los Angeles and Denver.
“By virtue of the new sublicensing contract with ESPN, we’re permitted to distribute games outside of the ACC states now,” said Ken Haines, CEO of Charlotte-based Raycom Sports. “We’re going into markets now that we never dreamed of and that’s all new exposure for the ACC. We’ve got much greater flexibility to sell and it certainly has taken the ACC to a wider audience.”
Raycom began branding its broadcasts “The ACC Network” last season, and those telecasts are now in six of the top 10 TV markets, 13 of the top 25, and 25 of the top 50. The broadcasts were in 14 of the top 50 markets last year. Overall, the network coverage has nearly doubled from 28 million households to 53 million in the last year, or about 46 percent of the U.S. TV households.
While nearly all of the TV stations in the ACC Network signed on for the entire 13-week package, Raycom still has the flexibility for one-offs. For example, when Rutgers played at North Carolina on Sept. 10, Raycom was able to create syndication agreements for stations in the New York area, which further increased the ACC’s exposure.
Syndication rates vary by market, and Raycom didn’t reveal what stations pay for the games.
Haines said the growing appeal of college football led to some of the agreements. In some cases on the West Coast, digital channels need programming, and often they find live games, even if they’re out-of-market teams, preferable to sitcom re-runs or entertainment shows.
Raycom’s ACC Network games, which start at 12:30 p.m. on the East Coast, 9:30 a.m. Pacific, sometimes provide lead-ins on the West Coast to games involving their local teams.
In the ACC footprint, Raycom keeps much of the advertising inventory. The farther Raycom gets away from the ACC’s states, the more inventory goes to the station.
“It’s just a testament to the popularity of live college sports,” Haines said.
Raycom also has launched a live pregame and halftime studio show this season for the first time. Those segments originate out of studios in Charlotte at NASCAR Media Group’s facility. In addition, Raycom is producing ACC games for Fox regional networks for the first time.
The new syndication and production activity combined with the studio show, the debut of a new HD production truck, new iPhone, iPad and Android apps for live streaming and other digital initiatives with the ACC led Haines to call this “the biggest and most significant football season in the history of Raycom Sports.”