SBJ/Sept. 16-22, 2013/MediaPrint All
Sporting News Media President Jeff Price is departing the company after leading the brand through a significant transition to a digital-first outfit.
Price, a veteran media and marketing executive who previously held roles with Sports Illustrated, Millsport, Trakus and MasterCard, led the effort to shift the 127-year-old Sporting News from a print-based company to one highly active on the Web, on mobile devices and in social media. He was then a key figure in a major joint venture struck in March between the Perform Group and American City Business Journals, parent company of Sporting News, SportsBusiness Journal and SportsBusiness Daily, to create Sporting News Media.
Price, whose departure is effectively immediately, will pursue entrepreneurial projects under his own company name, Acorn Sports Ventures, with an early focus on youth sports. He will continue to be based in New York.
“We started on a path four years ago to transform a challenged brand and create a digital future,” Price said. “That effort has been successful, and now with Perform, Sporting News is really set up for a long-term road of stability and growth. So I’ve got some entrepreneurial itches I want to scratch.”
Price was named Sporting News president and publisher in February 2010 after a four-month stint consulting for ACBJ on an independent basis.
“Jeff was the architect behind the makeover of Sporting News over the last three years and the driving force from [ACBJ’s] side in putting our U.S. media businesses together,” said Juan Delgado, Sporting News Media managing director. “We will miss him greatly and he will remain a close friend of Sporting News Media.”
Eyebrows first rose back in May when EA Sports teamed with DirecTV and Amazon to offer a special $99 version of the “Madden NFL 25” video game that also included a free 2013 subscription to NFL Sunday Ticket. The retail value of the Sunday Ticket subscription alone is as much as $300, making the offer a deep discount.
Copies of Madden have poured onto eBay after the special promotion.
The “Madden” offer also represents the only prominent way consumers can get NFL Sunday Ticket on a digital-only basis, as neither a satellite dish nor a DirecTV subscription is needed to get the out-of-market games with the promotion. DirecTV does offer a digital-only version of NFL Sunday Ticket for those who certify they cannot receive satellite TV, but this service is not actively marketed. Digital access as part of a premium package with the linear NFL Sunday Ticket package has been available for six years, and support with full-featured mobile applications started in 2010.
DirecTV servers showed some strain during the opening week of the 2013 NFL season, as the online game video ran slowly during much of the afternoon of Sept. 8.
This broad advent of digital-only consumption of NFL Sunday Ticket arrives as the league is actively determining the future of the premium-level product, which is estimated to have about 2 million subscribers. The NFL’s current, exclusive pact with DirecTV expires after the 2014 season. But the league has been in early-stage talks with a variety of digital and linear media outfits, and at this point nothing is being ruled out. An NFL Sunday Ticket that includes a broad digital-only offering, or even team-specific packages, remains a possibility.
“What we’re trying to figure out is what is the right path for Sunday Ticket for both our fans and our business partners,” said Brian Rolapp, NFL Media chief operating officer. “How do we use technology to make this product better? How can we reconfigure this to make sure that everybody who wants Sunday Ticket and is willing to pay for it can get it? That’s what we’re trying to understand, and what’s informing our talks. Long term, we’re after both platform innovation and product innovation.”
DirecTV Chief Executive Mike White said in a recent earnings call with analysts that he was “optimistic … Sunday Ticket will stay with us for the long haul.” In the meantime, the satellite system has sent a survey to some of its subscribers gauging their interest in the possibility of digital-only and team-specific versions of NFL Sunday Ticket.
“It’s clear that DirecTV is looking at all sorts of interesting ways to monetize Sunday Ticket,” said Rich Greenfield, media and technology analyst with BTIG. “I would expect some sort of clarity on all this by the end of this season.”
First-week sales of “Madden NFL 25,” which retails for $60, were down a sharp 39 percent from last year’s comparable figure, reaching 1 million units. But company officials and analysts say the forthcoming release of next-generation gaming consoles Xbox One and PlayStation 4 in November are more at the root of the current slowdown as opposed to the glut of “Madden” games in the resale markets.
In such an active market, however, one of the industry’s oldest players, CBS Sports, has remained quiet.
This year, CBS opted not even to kick the tires when Fox Sports and NBC Sports Group agreed to pay NASCAR a combined $8.2 billion for rights through 2024. It remained on the sideline as Fox outbid NBC for the rights to golf’s U.S. Open. Its executive team also opted not to match ESPN’s $75 million-a-year bid to swipe U.S. Open tennis rights, an event that CBS has produced since 1968.
These moves — or, rather, the lack of them — have caused some industry observers to scratch their heads, wondering why a broadcast network that runs an all-sports cable channel wouldn’t be more involved.
“We’ve said all along that we’re not currently in the marketplace for hundred-million-dollar deals,” said CBS Sports Chairman Sean McManus. “But we’re trying to improve our programming, which I think we’ve done dramatically by doing smart deals.”
McManus said the industry will see sports rights fees level off when cable networks are more fully distributed.
Photo by:PATRICK E. MCCARTHY
“This scenario really is a win-win-win situation,” he said. “The primary rights holder gets revenue to amortize its rights fee, the conference gets additional exposure for its schools, and CBS Sports Network acquires high-quality content. It only works when all three partners gain value, which in these arrangements they do.”
CBS Sports’ slow-and-steady strategy with CBSSN has centered on producing blocks of live programming. It started producing more studio programming and simulcasting radio programs. CBS Sports uses its cable channel to enhance big events, adding bonus coverage to the Masters, PGA Championship and the NCAA tournament. Last week, it started producing a three-hour NFL pregame show in the run-up to its Sunday afternoon telecasts.
“We’re trying to be smart about this. We’re trying to be strategic,” McManus said. “We have a long-term plan that is maybe not as immediate as some other people have. But for our company, it is the right strategy. We’re patient. Eventually, that patience will pay off.”
CBS’s decision not to get involved in big rights negotiations is not a sign that it has concerns that a sports rights bubble is about to collapse. Rather, CBS Sports executives want to build up CBSSN before getting involved with the bidding.
“There’s been a sports rights bubble since the 1960s,” McManus said. “Obviously, rights fees continue to go up, but the reason they continue to go up is that sports is the most valuable content in all of media right now.”
McManus believes prices will level off as networks mature but he said they are not likely to come down.
“There will come a time when there will be an adjustment in the rights paid — when cable networks are more fully distributed and they’re getting the kind of sub fees that they want,” McManus said. “But I don’t think that adjustment is right around the corner because there’s still so much competition for what is a limited amount of inventory.”
Sources say CBS is not a serious player in picking up NBA or Big Ten rights — the next two big rights deals that will come to market. But expect the broadcaster and its cable channel to become more involved during the next round.
“At some point in the future, we will be in a position where we can bid for cable and network rights for some of these major events,” McManus said. “At this point in our history, it just doesn’t make sense for us financially to do that. But at some point, it certainly will make sense.”
John Ourand can be reached at firstname.lastname@example.org. Follow him on Twitter @Ourand_SBJ.