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SBJ/November 19-25, 2012/MediaPrint All
NASCAR executives like to compare their sport’s TV ratings to a roller coaster. This year, the sport’s premier series took a downward ride, posting its smallest TV audience in five years and registering a 25 percent drop in the 18- to 34-year-old demographic.
NASCAR In A Nutshell
Avg. Rating % change No. of viewers (000s) % change Fox 4.8 -4.0% 8,600 -8.1% TNT 3.1 0.0% 4,980 -2.8% ESPN/ABC 2.9 -6.5% 4,564 -10.2% Chase for the Sprint Cup 2.6 -10.3% 4,139 -12.8% Totals 3.6 -5.3% 5,790 -10.1%
Coverage on Fox, TNT and ESPN averaged a 3.6 Nielsen rating and 5.8 million viewers through 35 of 36 races, down 5 percent and 10 percent respectively from last year, giving up all of the gains the sport made last year, which was its first annual ratings increase since 2005. (Three races weren’t counted because of rain delays that forced the races to be held on weekday mornings, and Sunday’s race at Homestead-Miami Speedway took place after press time.)
Ratings among advertisers’ favorite demographic, 18- to 34-year-olds, fell further. NASCAR races earned a 0.9 rating in that demo, down 25 percent from last year’s 1.2.
NASCAR executives attributed the declines to uncontrollable forces, starting with the Daytona 500’s first postponement in 54 years, from Sunday afternoon to Monday evening. NASCAR executives also cited competition from the London Olympics and NCAA basketball conference championship games as reasons for the downturn.
“The ratings thing is a real cyclical deal,” said Steve Herbst, NASCAR’s vice president of broadcasting and production. “It’s up 10 percent, down 10 percent. … We hit some weather early on. It’s an Olympic year, and there was other competitive programming we were up against. It was kind of a roller-coaster year.”
NASCAR officials said competition from the Olympics, NCAA basketball and other programming helped pull down viewership.
Photo by:GETTY IMAGES
Fox and ESPN executives insist that they are not concerned by this year’s ratings and tout the sport’s overall audience, which still is one of the biggest on TV.
“The rating story is as good now as 10 years ago,” said Mike Mulvihill, Fox Sports’ senior vice president of programming and research. “The ratings are lower, but compared to the other sports out there, it’s still a clear No. 1 in the first and second quarter, and the audience is better than people give it credit for.”
Mulvihill said Fox has reconfigured its sales pitches on NASCAR for next season to highlight that audience. The network is trying to dispel the notion among ad buyers that NASCAR doesn’t deliver an audience with buying power. It’s doing so by comparing the average income of NASCAR viewers to the average income in their home market rather than the national average. For example, in the Tampa Bay market, NASCAR viewers have an average income of $52,000, significantly more than the designated market area (DMA) average of $42,000 a year.
“There is a lot of value there,” Mulvihill said. “The whole theme of our national positioning is that NASCAR lives on Main Street. We really want to stress the middle class drives the American economy and NASCAR lives in that middle-class demo. We’re really embracing that middle class, middle American identity.”
NASCAR’s viewership decreases come at a critical time for the sport. It signed a new TV rights agreement with Fox last month that will give it $2.4 billion for the first 13 races of the 2014 to 2022 seasons, a sizable increase from Fox’s current eight-year, $1.76 billion agreement.
But NASCAR still has to sell the rights to 23 other races, which TNT and ESPN currently pay $2.74 billion to televise.
Negotiations on those 23 races aren’t expected to begin until next summer when Turner’s and ESPN’s exclusive negotiating windows open. NASCAR has not made a decision whether it will sell those races to one or two broadcast partners. It is keeping all of its options open.
Norby Williamson, ESPN’s executive vice president of programming, said ESPN will be an aggressive bidder for those rights.
“We have every intention of extending our partnership,” he said. “There’s no doubt there’s some challenges, partly on the ad sales side … but NASCAR is an important property for us now.”
This year’s ratings declines were set in motion before the first green flag ever dropped for the 2012 season as the Daytona 500, NASCAR’s Super Bowl, suffered through several problems. Not only was the race postponed until Monday night because of rain, but it also was beset by a long track delay after Juan Pablo Montoya’s car collided with a jet dryer
It was not a surprise to see the race’s rating decrease 8 percent from a year earlier, when it was held on a Sunday. Fox, which broadcast the Daytona race and 12 other races at the start of the season, saw a 4 percent decline in ratings and 8 percent decline in viewership for its portion of the schedule.
NASCAR’s Chase for the Sprint Cup Championship on ESPN didn’t fare much better. Ratings and viewership for this year’s Chase, which came down to Brad Keselowski and five-time champion Jimmie Johnson, were down or flat for every race and four of the nine races saw double-digit percentage decreases from the 2011 Chase, which pitted Carl Edwards and Tony Stewart as the top two drivers.
“Of course we want to see growth, but I’m not wringing my hands over these numbers,” Williamson said. “What other sport can do the numbers that NASCAR does against the NFL on Sunday afternoons?”
Turner, which airs six Sprint Cup races at the midpoint of the season, was the only broadcaster that did not see its ratings decline. Four of its six races on TNT were up from last year, and its average rating was flat. (Turner did not make an executive available to comment for this story.)
Williamson said ESPN is talking with NASCAR about making some tweaks that could increase viewership, but he didn’t offer specifics.
“They understand that they have some challenges,” Williamson said. “But ultimately, it’s their decision on how to oversee their sport.”
NASCAR executives believe that a number of tweaks planned for next year will help drive viewership, including a new digital strategy and Web presence, which it is taking over from Turner; new cars, which look more like showroom vehicles; and marketing initiatives, which are designed to boost youth and multicultural interest.
“We know our fan as well as we’ve ever known our fan and what they’re looking for,” Herbst said. “It’s no great mystery — competitive racing, bringing out the personality of the drivers.”
NASCAR’s Nationwide Series, which airs on ESPN and ABC, was averaging 1.99 million viewers through 32 races, up slightly from the 1.98 million viewers it averaged over the same period last year.
SportsBusiness Daily Assistant Managing Editor Austin Karp contributed to this story.
2012 NASCAR Sprint Cup Series TV ratings and viewership
Track Network Avg. rating % change No. of viewers (000s) % change Daytona Fox 8.0 -8.0% 13,669 -12.4% Phoenix Fox 5.6 -5.1% 9,230 -10.8% Las Vegas Fox 5.2 -11.9% 8,528 -15.4% Bristol Fox 4.4 2.3% 7,307 0.9% Auto Club Fox 3.8 -17.4% 6,153 -23.8% Martinsville Fox 4.3 -2.3% 6,835 -5.5% Texas Fox 4.0 0.0% 6,766 -3.8% Kansas Fox 4.3 10.3% 6,830 8.7% Richmond Fox 3.6 -2.7% 5,914 -3.6% Talladega Fox 5.1 -1.9% 8,300 -8.2% Darlington Fox 3.8 -7.3% 6,393 -8.4% Charlotte Fox 4.4 -2.2% 7,405 -8.9% Dover Fox 3.7 -15.9% 5,700 -22.9% Pocono TNT 3.4 6.2% 5,257 1.6% Michigan TNT 3.2 10.3% 5,284 8.1% Sonoma TNT 3.3 3.1% 5,200 0.2% Kentucky TNT 2.5 -16.7% 3,879 -21.9% Daytona TNT 3.3 -2.9% 5,449 -9.6% New Hampshire TNT 3.1 6.9% 4,775 4.7% Indianapolis ESPN 3.3 -17.5% 5,055 -20.7% Pocono ESPN 2.9 -14.7% 4,449 -18.9% Watkins Glen ESPN 2.8 NA 4,473 NA Michigan ESPN 3.3 3.1% 5,200 3.4% Bristol ABC 3.7 27.6% 5,905 16.5% Atlanta ESPN 3.4 NA 5,558 NA Richmond ABC 3.3 -10.8% 5,079 -17.6% Chicago ESPN 2.6 NA 3,949 NA New Hampshire ESPN 2.2 -18.5% 3,517 -17.0% Dover ESPN 2.2 -15.4% 3,581 -12.5% Talladega ESPN 3.2 -3.0% 5,113 -5.8% Charlotte ABC 3.2 0.0% 5,095 -5.6% Kansas ESPN 2.5 -3.8% 3,897 -6.6% Martinsville ESPN 2.4 -22.6% 3,617 -26.5% Texas ESPN 2.5 -13.8% 3,943 -16.6% Phoenix ESPN 2.8 -3.4% 4,423 -7.2% Totals 3.6 -5.3% 5,790 -10.1%
■ Local streaming deals are close.
NBA Commissioner David Stern surprised many in the audience when he said consumers will start to see live streams of local games this year. Currently, Los Angeles Lakers games on Time Warner Cable SportsNet are the only local NBA games streamed on a TV Everywhere basis, but Stern suggested that other markets should start local streaming live games soon.
“That’s a prototype of what’s going to sweep the nation locally. There’s no question about it,” Stern said. “One at a time, the rights granted will include [TV Everywhere] as we work out the triangulation of team-league-regional sports network-operator.”
Local streaming has become one of the most frustrating stories in sports media over the past several years, as teams, leagues, RSNs and distributors have been unable to agree on a model to stream games. MLB, NBA and NHL teams have been close to launching live, local streaming for years, but it still hasn’t happened.
NHL Chief Operating Officer John Collins gave voice to those frustrations when he said, “We’ve been talking about it for four years now. … This is the year when it goes over the top and we get those deals done.”
Fox Sports co-President Eric Shanks did not put a timetable on local deals, but he said many of the local issues already have been settled on a national level, where national media deals include TV Everywhere rights.
Shanks said local teams have not felt pressure to cut these deals so far because there hasn’t appeared to be enough consumer demand for local streaming yet. But he added that situation is changing.
“People are not switching providers because one has it and the other one doesn’t,” he said. “But that’s going to change really quickly, especially when everybody has products out there but there are games that have a big red X over it that you can’t get. Then you’re going to have a problem on your hands.”
■ MLB may combine Extra Innings and MLB.TV.
“If you look at how the out-of-market marketplace has evolved, it’s really a marketplace for both broadcast and online.”
Major League Baseball
Photo by:MARC BRYAN-BROWN
Having launched four years ago, MLB Network is a year away from having to renew many of its affiliate deals with cable operators and is looking to create a better negotiating position as it embarks on negotiations.
“You’re going to see us do some things that allow us to have the leverage that we need in the marketplace, to get the carriage we think we deserve at the prices that we think are fair to us and fair to the consumer,” Brosnan said. “We’re right in the nitty gritty with that now.”
MLB Network is in 70 million homes, making it the best distributed league-owned network. It charges around 27 cents per subscriber per month, according to SNL Kagan.
But cable operators have complained that the Extra Innings package, which MLB originally used as an enticement to launch the network, didn’t have the buy rates that they were expecting when they first cut the deal. It’s true that cable operators have not done a good job marketing Extra Innings, but it’s also true that the MLB.TV offering is depressing interest in the Extra Innings package, especially since MLB.TV’s deals with companies like Apple TV and Roku allow subscribers to watch on large-screen TVs.
That could soon change, Brosnan said.
“If you look at how the out-of-market marketplace has evolved, it’s really a marketplace for both broadcast and online. It’s as robust in both places now as the TV market was five years ago,” Brosnan said. “There has been a lot of discussion. I think you’ll see some proof of that discussion bearing fruit of, perhaps, combining those packages and using that as a lever to help drive distribution for the network.”
■ Google, Microsoft and Apple are nosing around for sports rights.
Nobody thinks that the World Series or NBA Finals will be on YouTube any time soon. But top executives with MLB and the NBA said they’ve seen increased interest from digital media companies like Google, Microsoft and Apple in recent months.
“They are sniffing around,” said MLB’s Brosnan, who just negotiated media deals with ESPN, Fox and Turner. “Pay-TV services are never secure, but with TV Everywhere starting to gain some traction, pay TV is looking like it’s building a model that might have some traction and will be here to stay.”
Stern, whose NBA is in the fifth year of eight-year media rights deals with ESPN and Turner, said he anticipates a time when digital media companies place a bet on sports rights in the same way that Fox Sports invested in the NFL in 1994.
“When we think about a potential landscape change, we think about a coming battle, potentially, between companies like Apple and Google and Microsoft. They each have devices and operating systems and might be looking for some way to differentiate themselves,” he said. “Ultimately, I think they are all going to conclude that content is going to drive them. They’re all fighting about the device and the operating system by which you get your content. I think there’s some negotiation yet to be done.”
ESPN President John Skipper and Turner’s David Levy don’t see digital media companies as a threat for sports rights today. Rather, both ESPN and Turner have set up partnerships with those companies, providing programming and apps they can use on their systems. They both expect to keep those relationships going well into the future.
“I can’t think of technology companies who have successfully morphed into content companies,” Skipper said. “It’s what they always think they want to do and what they always have trouble doing. The notion that Google or Apple is getting ready to buy the NBA Finals and broadcast them is very unlikely.”
■ We are a few years away from TV Everywhere.
“We don’t even talk about on-demand any more because it’s so integrated in how we all watch TV. TV Everywhere is on a similar path.”
SVP, Comcast Cable
Photo by:MARC BRYAN-BROWN
“When we launched on-demand 10 years ago, we had to convince people to push the on-demand button because they thought that they were going to get charged,” Strauss said. “We don’t even talk about on-demand any more because it’s so integrated in how we all watch TV. TV Everywhere is on a similar path, but it’s not going to take 10 years.”
Strauss believes programming support from big programmers, like ESPN and Turner, will lead to quicker TV Everywhere adoption rates. It took a lot longer for big programmers to warm to the on-demand world.
“Three to five years is too conservative,” Strauss said.
■ Fox, ESPN will bid for EPL in three years.
NBC may have plucked the English Premier League rights from ESPN and Fox, but executives with both those networks reaffirmed their commitment to soccer and say they plan to bid aggressively on EPL rights when they are back on the market in just three years.
“We’ll be right back at this in three years again,” ESPN’s Skipper said. “We loved our association with the English Premier League.”
Fox Sports’ Shanks sounded a similar theme.
“If we have the opportunity to grab [EPL rights] again, we would have them back in time for our first World Cup [in 2018],” Shanks said.
■ Turner is shedding the pay option for March Madness Live.
In March 2012, Turner allowed fans who couldn’t figure out the authentication process to pay $3.99 for online access to all 67 NCAA tournament games.
In March 2013, that option is going away, said TBS’s Jeremy Legg, senior vice president of business development and multiplatform distribution.
That means only cable and satellite subscribers will be able to access online streams of the games that appear on TBS, TNT and truTV.
“We grew through authentication last year,” Legg said. “We got our grounding pretty well, both in terms of the technology and how we work with the MVPD partners. We think it’s time to move to that model.”
Last year, the paid option operated as a catch-all, allowing quick and easy access for a relatively low price. Legg said the move toward TV Everywhere necessitated the move to authentication.
“We’re all marching down the path toward TV Everywhere, and sports is a critical component to that,” he said.
John Ourand can be reached at firstname.lastname@example.org. Follow him on Twitter @Ourand_SBJ.