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SBJ/January 2-8, 2012/MediaPrint All
Golf Channel’s “Golf Central” will add show dates to NBC Sports this year to give the network a pregame show before its Saturday and Sunday coverage of PGA Tour tournaments for the first time on a regular basis.
NBC experimented with a “Golf Central” pregame show prior to its coverage of the Tour Championship in September and found advertisers and viewers receptive. Most importantly, NBC concluded the additional 30 minutes of coverage wouldn’t cannibalize the viewing audience, even though it aired at the same time as Golf Channel’s tour coverage.
“Golf Central” broadcast on-site from the 2011 Arnold Palmer Invitational in Orlando.
Photo by:MARK ASHMAN / GOLF CHANNEL
“Advertisers are buying to align themselves with content, regardless of how it’s distributed,” said Seth Winter, NBC Sports Group’s senior vice president of sales and marketing. “Whether it’s broadcast, cable or digital, advertisers align with content agnostically. We’ve quickly responded to what the market wants with this golf vertical. It makes golf sponsorship that much easier for the client and the agency and we’re able to go into the marketplace with a unified shot.”
NBC’s expanded coverage will run prior to the majority of its 10 tour events on both weekend days, but the network isn’t sure yet if it will carry the pregame show before all of the tournaments.
NBC’s tournament coverage begins in late February with the Accenture Match Play and continues into the Florida swing with four more tournaments. The jewel of the PGA Tour package is the Players Championship in May.
Winter said those tournaments, plus the U.S. Open, the Ryder Cup this year and Golf Channel content, has provided the golf sales team with new opportunities to sell across multiple platforms, including GolfChannel.com. And with the need to sell across platforms has come the need for more golf inventory, which the new “Golf Central” on NBC provides.
The majority of golf’s ad inventory is dominated by event title sponsors and the PGA Tour’s official marketing partners, so new inventory presents opportunities for non-tour partners such as Dick’s Sporting Goods, Chase and Sprint to get access to golf’s high-end demographics.
Winter said advertisers in the traditionally strong categories in golf will again be prevalent in 2012: equipment and apparel makers, financial companies and luxury automakers.
“Almost all of the clients are interested in buying across the platforms,” Winter said. “Every bit of information we have shows that the more a client can invest across, the higher the level of engagement the brand has with the viewer or the user. We see it in the NFL, we see it in the Olympics. There’s greater message and brand recall when you’re interacting across multiple platforms.”
Golf Channel is benefiting from NBC’s broader reach and the cross-promotion between the networks, which is driving viewership, said Mike McCarley, Golf Channel’s president.
“I think you’ll see in 2012 much more of what we can do with the additional resources of NBC Universal to promote big events and the launches of new shows,” he added.
When NBC flips the switch on Versus this week, it’s not just the network’s name and branding that will change. With programming from the NHL, MLS and the Olympics, NBC plans to fill the new NBC Sports Network’s most desirable time slots with more traditional sports.
“You’ll see more green and less brown,” said NBC Universal Sports & Olympics Chairman Mark Lazarus, referring to the difference between stick-and-ball programming and outdoor.
Lazarus said the channel still is committed to outdoor programming, though the number of hours will be reduced.
“It brings in viewers and revenue,” Lazarus said. “We’re not trying to get out of it. We’re trying to put it in consistent dayparts.”
NBC plans to rebrand its outdoor programming blocks as NBC Sports Outdoors and run them in traditionally low-rated time slots: midmorning during the week and on weekends when NBC Sports Network does not have live events.
Lazarus says the renamed Versus won’t get rid of outdoors shows, just package them better.
Photo by:SHANA WITTENWYLER
In the first half of 2012, Lazarus said NBC Sports Network will focus on supporting NBC Sports Group’s biggest events: the Super Bowl, NHL playoffs and the Olympics. He has the channel on a five-year plan. By 2017, Lazarus expects NBC Sports Network to be a much more important part of the TV sports landscape.
“NBC Sports Network is a work in progress,” Lazarus said. “It’s going to take five years to get to where I think it can be held in wide respect across the entire sports spectrum. … The one thing that I love about my bosses is that they have patience.”
Lazarus sat down with SportsBusiness Journal in his New York office in late December to talk about changes that already have taken place at NBC Sports Group, as well as changes that will be coming in 2012.
■ What should viewers expect when they turn on NBC Sports Network in March, two months after the rebrand?
LAZARUS: They will see a beautiful plume of peacock feathers instead of the black-and-red VS. You will see marketing and interstitials that will be relevant to storytelling and the legacy of NBC Sports. You will see strong hockey production with exclusive games. You will see Major League Soccer in the middle of March. You’ll see more green and less brown. You’ll see more stick-and-ball sports and more talk about stick-and-ball sports.
■ When did you know you wanted to rebrand Versus?
LAZARUS: The first day I heard it in 2006 when I was working somewhere else. As a competitor, I was OK with it because I didn’t think it was as strong a branding as it could have been. When I came into the fold here with Dick [Ebersol] early on, I said that’s one of the things that I think we should focus on early. It wasn’t my original thought. There were lots of people with that idea.
■ NBC paid a premium for the NHL and Olympics rights. Can sports networks make money today when sports rights are increasing as quickly as they have been?
LAZARUS: We’re a new entry into the marketplace. We’ve probably been part of the fuel here. It’s important for us to build sports as a part of the NBC Universal portfolio here. We can grow this. There’s plenty of opportunity for us, as long as we continue to improve all of our products to be a powerful engine for this company and partners, both leagues and distributors and marketers.
■ Let’s talk about NBC’s other sports networks. How has the merger with NBC benefited Golf Channel?
LAZARUS: From marketing, promotion and branding, the peacock gave Golf Channel some good sports credibility. Golf Channel gave NBC further credibility in the endemic golf world. It has led to good ratings on NBC and it has led to record ratings on Golf Channel. As importantly, we started to get more credibility in the golf community. … We have credibility in the golf community in a way that we didn’t necessarily in the past, when we were a nice channel that golfers and golf fans looked at. Now they look at us as the definitive network of record for everything golf.
■ There’s been some talk that you may change the names of your RSNs to use the NBC brand. Where do you stand on that?
LAZARUS: Our plan is to not change the name in the short-term. We think there’s value for Comcast and for our company to keep the Comcast SportsNet name. For the most part, they’re all in Comcast territories. That has a value to the Comcast customers.
■ Will the RSNs see any changes?
LAZARUS: We’ve done a lot on the digital side of the RSNs and rolling them up into NBCSports.com. On air, you’ll start to see more of NBC production, technique and graphics. It will be sort of a production takeover.
The newly hired head of Showtime’s sports division stood in a hotel meeting room in Atlantic City a few weeks ago, showing off a slickly produced promo for the first multimillion-dollar fight of 2012, the rematch between welterweights Victor Ortiz and Andre Berto. As if cued by the fading picture, one of the two men on the screen burst through the door.
Striding in with smile blazing, Ortiz grabbed Stephen Espinoza by the shoulders as an old friend would, then took a lap around the room, introducing himself to the producers, editors and cameramen there to document the day.
After pleasantries, it was time for Espinoza and Ortiz to head down the hall, where they would join Berto at a press gathering to promote the Feb. 11 fight, noteworthy as much for its television implications as it is for its place on the sports docket.
The charismatic Ortiz is a cornerstone of what Espinoza hopes to build at Showtime.
Photo by:GETTY IMAGES
Several top boxing promoters said the offer — about $1.7 million, or $400,000 less than the network paid for the first fight — sent a message. After years spending aggressively for fights even when no other network had the budget to compete, HBO was trimming its sails. The former head of the network’s sports division, Ross Greenburg, left the job in July. In October, HBO replaced him with Ken Hershman, who spent the last eight years in the same role at Showtime, where he had a boxing budget that insiders estimate ranged from one-fifth to one-half of HBO’s.
For Hershman’s replacement, Showtime Networks Chairman and CEO Matt Blank chose Espinoza, an attorney best known for his work with Oscar De La Hoya and his boxing company, Golden Boy Promotions.
Neither HBO nor Showtime discusses its boxing budget publicly. But two well-connected boxing sources said that, based on what they have been told and observed, HBO’s budget will be about $35 million this year, about half of what it spent as recently as five years ago. In contrast, Showtime will increase its budget to at least $28 million.
So early in November, days after he signed his Showtime contract, but before the network had announced his hire, Espinoza phoned Golden Boy CEO Schaefer with what he thought was the right offer for Ortiz-Berto II: $2 million. HBO quickly upped its bid but, in Schaefer’s words, it was “too little, too late.” Showtime got the fight for $2.2 million, only $100,000 more than HBO’s final offer, according to sources.
Showtime also promised CBS promotional assets that it previously had unlocked only to promote pay-per-views. Chief among them will be slots for the 30-second promo Espinoza showed off in Atlantic City.
“Before I’m even in the office, I’m writing a really large check for this fight because it’s something I strongly believe in,” Espinoza said. “Seeing the level of excitement and seeing the asset that we have to sell against and build a brand around in the next two months, I’m already confident it is a success.
“We’re sending the message that we’re a top-tier brand with top-tier content.”
It felt that way at Caesars Atlantic City last month, as Espinoza stumped in front of media assembled for the finals of the Super Six, a tournament Hershman created in an effort to build exposure for fighters who committed to multiple appearances on Showtime. He would be joined by Ortiz, Berto and Canadian star Lucian Bute, three fighters whom, along with Super Six champ Andre Ward, he considers cornerstones of what he hopes to build.
On the way out of the meeting room as they headed to the press conference, Espinoza pulled Ortiz to his shoulder.
“I didn’t even have the job yet and I was trying to buy this fight,” Espinoza said into the fighter’s ear. “Let’s go sell some tickets.”
■ ■ ■ ■
So one network writes a larger check than another and lands the rights to a sporting event. Happens all the time, right?
It does in most sports. But in boxing, there has been no real competition for U.S. TV rights in two decades. In boxing, promoters line up what they hope is a saleable fight. They set a price for the TV rights and take it to HBO. HBO says yes, or no, or makes a counteroffer, sometimes offering less money, sometimes suggesting a different match.
Only after that dance is concluded is the fight discussed anywhere else.
Hershman (above) left Showtime for HBO in October, opening the door for Espinoza.
“That may not be the case any longer.”
Other promoters put the perceived change more bluntly.
“I hear that Showtime is going to increase their budget and actually go to war with HBO,” said promoter Gary Shaw, who in the last 10 years has sold more fights to Showtime than any other promoter.
On fight day in Atlantic City, while Ortiz and Berto were holding court down the hall, the latter’s promoter, Lou DiBella, laid out the implications of the shifting landscape while guzzling back-to-back iced coffees.
“One of the best things that could have happened for boxing was Showtime getting this [Ortiz-Berto] fight,” said DiBella, a former TV executive who ran boxing for HBO back when its budget was flush. “Now, everyone is on alert that there’s a marketplace.
“It’s a shot across the bow and it makes a statement. Go cut your budgets. But if you make a mistake I’m going to jump on it. If you let me have something totally compelling that’s going to drive subscribers to my network, I’m going to spend the money to get it. That’s good for boxing.”
For its part, HBO has little to say about the perceived shift. Mark Taffet, senior vice president of sports operations and pay-per-view, said the network offered what it thought was the appropriate fee for Ortiz-Berto II, and that the promoters “made a business decision” to take the fight elsewhere. He would not discuss specifics of the negotiation, a common stance at HBO Sports. Taffet said that if there is talk of increased competition from Showtime it should be left to his new boss, Hershman, who starts at HBO on Jan. 8.
After losing the Ortiz-Berto fight, HBO was relatively quick to announce three others for early 2012, including a World Championship Boxing card promoted by Top Rank featuring Julio Cesar Chavez Jr. and Nonito Donaire. Its flagship World Championship Boxing series attracted an average of 1.2 million viewers for first-run showings last year, up 10 percent.
Still, the perception among promoters is that HBO has been handcuffed for 2012 while awaiting Hershman’s arrival. And it’s not all because of Ortiz-Berto. There also was the tabling of a developmental series that Greenburg approved before leaving last year.
Already a business in which volatility is expected and instability is the norm, promoters say the last few months have felt especially transitory. They all know Hershman well from years negotiating with him at HBO, but don’t know what changes he might have in mind for the network — or that it might require of him.
And then there is Espinoza. They know him well, too.
Or at least they think they do.
■ ■ ■ ■
A couple of hours after wrapping up with Ortiz and Berto, Espinoza leaned over a table at a nearby noodle bar, flipping through news clippings between sips of his soup. He checked emails on his BlackBerry and handed a fight program over to a fan seated at a nearby booth.
“If you wanted to see a Golden Boy conspiracy, we gave you one right off the bat,” Espinoza said, nodding. “Golden Boy fighter, big money. But I’ll give everybody credit. I didn’t hear it, at least not to my face. They see what the entire commitment is, so they know Richard wasn’t doing me any favors. And it’s a fight anybody would want to buy, so I’m not doing any favors for him.”
This is what people in boxing know about Stephen Espinoza: As lawyer to De La Hoya, he represented the fighter in a bitter, ugly dispute with his former promoter, Top Rank founder Bob Arum, crafting the legal argument that made the fighter a free agent. He then worked on the formation of De La Hoya’s promotion company, Golden Boy, where he has had a hand in every one of its fighter, sponsor and television contracts.
Nobody questions Espinoza’s understanding of boxing’s oddball structure or its iconoclastic cast of characters. But they wonder how he fits in at a TV network, and particularly one that appears poised to make a run at the A-list. When they voice their concern candidly, it is what you would expect it to be — that Showtime installed Espinoza to sidle up to Golden Boy, and that he will favor them and cut out the rest when filling slots on the Showtime programming calendar.
In conversations with each of the major promoters in his first month on the job, Espinoza worked to allay that concern. “That, I told them, is not going to happen,” Espinoza said. “I want to succeed in this job. And I’m not going to last very long if I’m favoring Golden Boy. That’s not going to serve me here.
“I picked up my life and moved [from Los Angeles] to New York. You think I’m going to risk all this because I like Oscar and Richard? I’d be less than intelligent. So forget ethically, morally and programming-wise — all of which matter to me, by the way. From a self-interest standpoint, remaining too close to Golden Boy wouldn’t make any sense.”
The connection to Golden Boy, and more importantly the fight game, got Espinoza considered for the Showtime job. This, everyone in boxing knows.
This is what most of them don’t know: In Espinoza’s mind — and that of the Showtime executive who hired him, Blank — he has worked in television for the last 15 years. De La Hoya and Golden Boy are clients. But so is Gavin Polone, the executive producer of “Curb Your Enthusiasm” and “Gilmore Girls,” as well as films including “Zombieland” and “Secret Window.” And so is Tyler Perry, who went the grassroots, self-financed route to land atop the Forbes list as the highest paid man in entertainment last year. When one of Ward’s business managers approached Espinoza after the fighter won the Super Six, it wasn’t to talk about matchups, but to ask whether he could help with an introduction to Perry.
Espinoza has represented producers, writers and directors. He has secured financing for TV series’ and films.
So when he sat down for the first time with Blank in what would turn out to be a whirlwind courtship, they quickly found they spoke the same language.
During dinner with Espinoza before the Super Six final, Blank described the fit.
“Boxing is not a terribly linear world,” Blank said, smiling at his own understatement. “So you have to have somebody who understands how the boxing business works … Once we finally met Stephen, it was a pretty easy hire. The intangible in this case is passion. He had it. And you have to. Because you don’t want somebody who comes to work every day saying, ‘I can’t believe I work in this crazy business.’
“Stephen knows what he’s getting into. And he really wants to be the guy who makes this work.”
At dinner in Atlantic City, Blank stressed the role he saw for boxing on premium cable. It wasn’t about ratings, but subscribers. There was a time when people bought HBO or Showtime to get an early crack at a blockbuster movie, but Netflix, Xboxes and iPads snapped the barb off that hook. Premium networks now are about original programming, and the brand image it conveys.
“Showtime was a second-class brand for years,” Blank said. “It’s very hard to turn something like that around. But we’re now a first-class brand. And that’s important.
“We don’t have to win at nine o’clock on Sundays. We have to win in December, when people pay that bill. And that happens because of the brand. We win because of the brand and its franchises.
“Five or 10 years ago, all those big movies — we’d say they were ours. Now they’re everywhere. You can’t say they’re ours. But this fight tonight? It’s mine. It’s Stephen’s.”
In the coming months, the boxing world will watch closely to see what else is theirs.
And what is still HBO’s.