SBJ/November 7-13, 2011/Media

What's the playbook for tablets?

Devices blur the lines when it comes to media and sponsorship rights

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Ninety minutes before kickoff every week, players on the Tampa Bay Buccaneers and Baltimore Ravens have to give up their playbooks.

Call it a competitive disadvantage.

Imagine the possibilities: Could tablets be a staple on the sidelines in the future?
Photo by: GETTY IMAGES / PHOTO ILLUSTRATION BY WES SCHUENEMAN
During the rest of the week, Bucs and Ravens players use their iPad playbooks to watch video of upcoming opponents and study new plays. Just before game time, it’s back to the technology from the day of leather helmets: paper and loose-leaf binders.

Baltimore and Tampa Bay are the only NFL teams that have ditched paper playbooks in favor of iPads. The NFL bans digital technology from locker rooms and sidelines 90 minutes before kickoff and during games.

“It shows you how antiquated the league is,” said former Ravens coach Brian Billick, now a Fox Sports analyst. “Players can’t bring their game plan into the locker room 90 minutes before? That’s got to change. And it’s ridiculous not to have that capability on the sideline.”

NFL rules banning tablets extend beyond the locker room. Coaches can’t use them on the sidelines, having to develop in-game strategy through Polaroids rather than video.

Across sports, on-field technology is in a 1970s time warp.

“It seems silly that during the 2011 World Series you see a coach in the dugout leafing through paper notebooks,” said SportsNet New York President Steve Raab.

Anyone who’s used an iPad can see how it would help coaches or players, even before specific apps are written for their use. However, there are sponsorship and media rights issues more complex than a flea-flicker that need to be overcome before an NFL coach’s clipboard or laminate will be replaced by a tablet.

The popularity of tablets — 23 million have been sold — have created complex sponsorship and media rights issues eventually affecting hundreds of millions of dollars in revenue that leagues, sponsors and rights holders need to work through.

“Our football department is leading the charge here,” said Kevin Rochlitz, Ravens vice president of national sales and partnerships. “We’re looking hard to find ways to capitalize on this and find new revenues, but it’s a very delicate situation, since it requires balancing our business side with our football side.”

Tablets have posed a media rights challenge for the NFL since they were first introduced last year. Since selling an exclusive four-year, $720 million mobile rights deal with Verizon in March 2010, sales of tablets have exploded, thanks in large part to Apple’s iPad launch. Apple sold 14.8 million iPads last year. But at the time, the NFL decided to split its rights. Verizon controlled rights to mobile phones. Motorola’s NFL rights include the branded headsets, which aren’t a retail product, but include sideline exclusivity for “handheld devices.” Currently, that includes mobile phones, but does not include tablets.

With tablet use approaching 23 million, and Motorola’s rights up after this season, that should change.

“The commissioner has challenged us all when it comes to innovation and on the sidelines, if instead of looking at Polaroids you’d have a tablet, obviously it would be considerably more functional,” said Keith Turner, the NFL’s senior vice president of sponsorship and media sales.

Even with millions of tablets in use, definitions are murky and are at the root of many of the rights issues. During the Internet boom of the late 1990s, the term “convergence” was a favorite. Now that we have convergent hardware, it seems to have exacerbated confusion.

“These tablets are becoming mightier than the ones associated with Moses,” quipped Steve Solomon, the former NHL chief operating officer and ABC Sports executive who now has his own media consultancy. “You just kind of feel it will eventually be in nearly every home — and advertising always follows eyeballs. Now you’ve got a battle over definitions. … When you take that tablet out of your home, the rights issues get even stickier.”

So in addition to on-field rights, it crosses the line into media definitions. Is a tablet just another TV in the home? If so, should it cost any more for your cable TV provider to stream programming to it?

“Other than live, nothing has rivaled high-def 50-inch HD screens for sports, but tablets are coming close,’” said Rick Singer, the former NBA marketer who heads sponsorship at IBM as vice president of client executive marketing. “I’ve heard people say the distinguishing characteristic is whether the device has a phone. We use a tablet to video chat with my son. So where’s the line?”

With millions of tablets in use across America, those “lines” are murky.

“It gets down to what a TV is and isn’t as far as determining who’s going to maximize revenues on tablets,” said SNY’s Raab. “I’m saying they are just another TV, because it will get increasingly difficult to split the baby and maintain the whole.”

Bruce Wilson, a partner at Covington & Burling who has advised NASCAR, the NBA, NFL and NHL on various business matters, says the search for boundaries obfuscates the larger issue.

“The larger question long term is whether consumers will buy more of these [tablets] instead of traditional phones or computers,” Wilson said. “In the end, eyeballs will determine revenue models.”

Property marketers have to start placing their bets. As in all things domestically, the pricing benchmark will be set by the NFL, which dominates TV sports. The NFL’s biggest sponsorship deals are those that offer branding along its well-exposed sidelines. Gatorade, Reebok and Motorola pay millions for exposure on those sidelines. How much would it be worth for Apple or Motorola to have NFL coaches holding a branded tablet on the sidelines every Sunday?

“What you’ve got now on NFL sidelines are binders full of black and white photos, so any move in this direction has to be an improvement,” said John Tatum, CEO of Genesco Sports Enterprises, sponsorship agency for Motorola, and Verizon Wireless. “Certainly this is the clear evolutionary path. But any time you are dealing with technology perceived as directly impacting the game, it’s going to get scrutinized.”

For big sports properties, constructing a deal with a tablet maker that includes meaningful on-field integration will necessitate navigating through a maze of overlapping category definitions. Getting tablets approved for game use by coaches and players means politicking through a Bermuda Triangle of coaches and competition committees.

Given those difficulties, most properties have banned tablets from sidelines. Hewlett-Packard has NBA tablet rights through its league sponsorship, but its Touchpad cannot be used on sidelines. The league has reached out to its coaches association to see what sort of applications coaches would like.

Still, tablets on NBA sidelines aren’t expected soon.

A Toronto Maple Leafs assistant reviews a play on a tablet during a preseason game last year.
Photo by: NEWSCOM
“Tablets are a tricky category and probably getting more so across sports,” said Mark Tatum, the NBA’s executive vice president of global marketing partnerships. “You can see this is the direction it is all headed, but every property will have to find the right applications and a level of integration they are comfortable with.”

It’s not just with the leagues. Rights holders have been trying to figure out what to do with broadband and mobile rights since well before tablets came on the scene. Issues of control and value have been difficult for rights holders and distributors to navigate.

Broadcasters and cable networks have drawn distributors’ ire by making their programming available online. Distributors believe they’ve paid for that programming through their carriage fees and want to control how it’s made available.

“You have this ginormous struggle going on between distributors and content owners,” said media consultant Chris Bevilacqua. “Everybody wants to get direct to the viewer.”

The answer for cable and satellite operators has been a concept called TV Everywhere, which allows cable subscribers to access their cable channels on TV, tablets and broadband.

It’s taken a while for the TV Everywhere concept to take hold.

So far, ESPN has been one of its biggest supporters, having made a big bet on TV Everywhere. It launched an app, WatchESPN, that streams programming to tablets. ESPN has cleared almost all of the rights with the leagues for its app, which has been downloaded 4.2 million times.

“TV Everywhere is the mantra,” said Chuck Pagano, ESPN’s executive vice president and chief technology officer. “And we believe in the concept.  … It has added value to us and our cable partners because people are now watching more and more bits in the house or wherever they happen to be because they are authenticated,” he added.

Other rights holders, such as Fox, are moving more slowly. Fox only recently has cut deals that allow DirecTV and Dish Network, among others, to stream certain channels to authenticated subscribers on tablets.

“Live events in general are better suited since they are live, DVR-proof appointment viewing,” said Clark Pierce, senior vice president of emerging technology for Fox Sports Networks.

Another big question deals with determining tablet rights. Distributors do not want to charge more to subscribers that want to view channels on tablets. But leagues and rights holders assign added value to those rights, both in affiliate fees distributors pay and advertising fees sponsors pay.

The advertising piece is even trickier, since viewers on iPads can’t be counted by Nielsen yet.

When he was helping to sell the Pac-12’s media rights, Bevilacqua said he factored the value of the conference’s wireless rights — including tablets — into the price ultimately paid by cable companies to launch the Pac-12’s channels. He didn’t give specifics about how much those rights are worth.

“We allocated, at least in our own minds, what we thought linear and all these other nonlinear rights are worth,” he said. “If you can start building that in, there needs to be some economic model that makes it all work. I don’t see digital rights getting thrown in. They get value and they get price that way.”

Fox’s Pierce agreed, saying that distributors “see value in offering products to their subscribers that feature these mobile rights, they are not added value.”

So where is it all going?

None of the marketers interviewed for this story were willing to make a prediction as to when tablets will first appear on pro sports sidelines. However, Billick believes NFL rules will be relaxed and its teams will abandon their paper playbooks for tablet computers relatively quickly.

“Now that two clubs are doing it, within two years, everybody will have that pad on the sideline and in the booth,” he said.
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