Islanders look back and to future From the Field of Marketing Rebrand conveys MLS’s confidence Statues, schooling and ‘HD on steroids’ From the Executive Editor Agents, firm seek bankruptcy protection Cartoon: All the king's horses … Ryder Cup a ‘crowning moment’ ADs unsure what new freedom will cost Nets prep for playoffs minus mainstays
SBJ/April 28-May 4/MediaPrint All
There was a time when Olympic sports executives would compare NBC to a magician. Every two years, the broadcast network appeared to pull Olympic sports out of a hat, put them on visual display for 17 days and then store them away until the next Games to preserve the magic of the Olympics.
Those days are over.
Now, NBC is on its way to becoming the Olympics channel even in non-Olympic years. It has spent the last eight years acquiring rights to most Olympic sports, from figure skating to swimming, and the network is close to announcing a deal for the last major Olympic sport it doesn’t exclusively hold: track and field.
Since the 2008 Beijing Games, NBC Sports has added more than 60 hours of additional Olympic programming from marquee sports such as swimming, gymnastics, figure skating and skiing. It also added rugby programming, which will make its Olympic debut in 2016, and aired the inaugural Olympic trials of speedskating.
USA Track & Field would shift all of its events to NBC through 2016.
Photo by:GETTY IMAGES
“There’s been a shift, and NBC is more responsive in terms of programming and production than they’ve ever been when it comes to swimming and Olympic sports,” said Matt Farrell, USA Swimming’s chief marketing officer.
NBC, which has held rights to the Olympic Games since 1988, declined to make an executive available for this story.
It’s not surprising to see media companies gobble up sports rights these days thanks to the launch of several 24-hour sports channels. Live sports programming is the best way to stand out, and the tonnage of Olympics programming can fill out a schedule.
NBC’s push to pick up these rights has shut out other broadcasters with 24-hour sports networks, like ESPN, Fox and CBS. Executives with those networks say they would be interested in rights to some Olympic sports, but they have not even had preliminary conversations with the national governing bodies because NBC has been effective at locking up the rights.
Some of the deals are revenue-sharing deals; some involve rights fees, depending on the popularity of the sport. But the business model has been less important to the national governing bodies selling the rights than the promotional value they believe they get by working with the longtime Olympic rights holder.
“It allows NBC, the U.S. Olympic Committee and [national governing bodies] to work together, and that collective effort is going to be important for promoting, selling the product and providing more value to corporate America,” said USA Gymnastics President and CEO Steve Penny.
NBC’s change in strategy can be traced back to Comcast’s acquisition of NBCUniversal in 2010. NBC Sports rebranded the Comcast-owned sports channel Versus into NBC Sports Network and needed to secure content for the channel.
“Now with the family of TV sports channels it operates, NBC has more of a need for quality programming,” said sports media consultant Neal Pilson, who consulted for the International Olympic Committee several years ago. “NBC didn’t have sufficient platforms or sales for these sports before it controlled NBC Sports Network and the regional sports channels.”
The strategy change also came after a push from several national governing bodies and the USOC to have their sports televised in non-Olympic years. In 2007, USA Swimming, USA Gymnastics and USA Track & Field signed a deal with Wasserman Media Group that was supposed to create a digital network to show their competitions. Around the same time, the USOC began pushing to launch an Olympic cable network.
Neither venture was successful, but the efforts served to prompt NBC to re-evaluate its approach to covering Olympic sports in non-Olympic years. In 2008, it took a small stake in Universal Sports, a channel with limited distribution that shows Olympic and endurance sports, and after the Comcast merger in 2011, it began carving out more programming for Olympic sports on NBC Sports Network.
Speaking about the deal in Sochi, Jon Miller, president of programming at NBC Sports and NBC Sports Network, said it was important to increase the hours it showed those sports because they contributed 40 percent of Team USA’s athletes for the Sochi Games.
“It’s important people become familiar with the athletes, the sports and the disciplines [before the Olympics],” Miller said.
NBC will follow the USSA acquisition with a USA Track & Field deal. Over the last decade, the national governing body’s programming has been split between ESPN and NBC Sports, but it is shifting coverage of all of its major events to NBC through 2016. NBC and NBC Sports Network for the first time will show 16 hours of track and field competition between April and July. A formal announcement of their partnership is expected next month.
The top Olympic sports deliver the type of viewership that’s comparable to established sports like regular-season college basketball. For example, USATF’s Prefontaine Classic last year averaged 1.2 million viewers on NBC, the 2013 FINA World Championships averaged 813,000 viewers over three two-hour broadcasts on NBC, and the U.S. Figure Skating Championships averaged 3.7 million viewers for a prime-time telecast on NBC in 2012.
National governing body executives say the change in NBC’s strategy is good for their business, allowing them to integrate more NBC advertising inventory into their sales packages. For the first time, USA Gymnastics, USA Swimming and USATF partnered on a joint sponsorship package that includes hospitality assets and advertising inventory for all three sports. The deal was made possible, in part, by USATF’s new agreement with NBC. The three NGBs are billing themselves as the “Trio to Rio.”
“We couldn’t have done it without NBC,” Penny said. “We’ve got this entire yearlong package to sell.”
Staff writer Austin Karp contributed to this story.
NBCUniversal beat analysts’ estimates for the Sochi Games, booking $1.1 billion in revenue, which is nearly $300 million more than Wall Street analysts expected.
Revenue from the Olympics helped boost Comcast’s first-quarter profit by 30 percent. The $1.1 billion in revenue for the Olympics pushed total revenue for NBCUniversal’s media unit to $6.9 billion, a 28.8 percent increase from the same period a year ago.
The success of the 2014 Winter Games stands in stark contrast to its most recent predecessor, the 2010 Winter Games in Vancouver. GE, which owned NBCUniversal at the time, claimed it lost $223 million on the Vancouver Games.
“It’s appearing that under Comcast’s ownership, NBC Olympics’ success is now profitable, which wasn’t the case under previous ownership,” said Vijay Jayant, a senior media analyst with International Strategy & Investment. “With the positioning of the shows and marketing of them and offering them on not only broadcast but cable, [Comcast] had success.”
Comcast CEO Brian Roberts, who led the company’s negotiations for Olympic TV rights in 2011, called the results “terrific.”
“Any way you look at the Olympics, it was a tremendous success,” Roberts said during an earnings call with analysts last week.
NBC paid $775 million for the rights to the Sochi Games but didn’t report production and travel expenses against the event. The Sochi Games averaged 21.4 million viewers over 18 days in prime time on NBC, a 6 percent increase from the 2006 Torino Games, which were the last Winter Olympics held outside North America. This year’s event drew 61.8 million visitors across all of NBC’s platforms, a 29 percent increase from Vancouver, and helped NBC Sports Network to its most-watched quarter ever, Comcast reported.
Jayant pointed out that NBC’s broadcast competitors, ABC, CBS and Fox, don’t schedule high-quality programming during the Olympics. This made competition for viewers easier for NBC’s Olympic programming than at other times of the year.
“It was a success — in terms of the viewership, the streaming and the ad dollars that followed through,” Jayant said.
The NBA is a league of stars, and TV networks clamor to put the biggest ones on a national stage as often as possible.
Media writer John Ourand and NBA reporter John Lombardo discuss what the league's TV partners want and the difficulty of incorporating a more flexible NBA schedule.
But both teams were busts on the floor and, as follows, proved to be ratings duds. Bryant missed most of the season with a leg injury, and Anthony’s Knicks drew spring headlines only for their front-office overhaul; neither club made the playoffs. In the run-up to the postseason, though, ABC was stuck with a Lakers-Clippers game — a blowout win for the Clippers that posted viewership numbers 18 percent below ABC’s season average.
As the networks start negotiations with the league on a new TV deal, ESPN and Turner want more assurances they won’t be locked into bad matchups like that at the end of the season. Network executives have made it known to the league they want the same type of flex scheduling the NFL uses for NBC’s “Sunday Night Football” to ensure that a Bryant-less Lakers don’t have an exclusive national TV audience on a Thursday night or a Sunday afternoon.
But while the networks would like greater flexibility to swap out those less-than-desired matchups and adjust game times to suit national telecasts, sources close to management say the league’s owners are wary about such a move.
Unlike the NFL, where national TV revenue drives the financials, local TV deals are critical in the NBA, and sources say NBA team owners are firm in their resolve to preserve that lucrative revenue; they believe flex scheduling could threaten it.
League officials declined to comment.
At present, ESPN and TNT can take a total of 12 games per team for exclusive telecasts, leaving RSNs to produce between 70 and 82 games per club, depending on how good or appealing a team is. Team owners, many of whom hold stakes in these RSNs, are not looking to upset that relationship. That’s the case even though the national networks may be prepared to pay a huge premium for the league’s national TV rights with their new deals.
Protecting these local RSN deals, which have seen their own values escalate dramatically since the NBA’s last national broadcast deal was signed six years ago, is one of the priorities of both of the league’s media committees — one made up of owners, the other made up of top team executives.
It’s unclear exactly how much revenue a local TV deal represents for a club, and the value of those deals fluctuates wildly depending on market. The Lakers, for example, have a 25-year, $5 billion deal with Time Warner Cable for its local TV rights, resulting in a massive $200 million per year.
That’s something the owners want to protect.
Nothing is set in stone. The NBA has not started any kind of formal negotiations with either network yet, but this flex scheduling issue has already been flagged as a potential sticking point in the forthcoming talks.
“The national rights [fee] is going to be a big number, and the networks are going to try to grab as much as they possibly can,” said a source. “But teams have to protect the local markets because there is a lot of money there, too.”
The NBA allows for some limited flex scheduling, but the process is so cumbersome that ESPN has flexed out of only one Sunday afternoon game on ABC over the past several seasons. On the last Sunday of this season, it carried Oklahoma City-Indiana instead of Chicago-New York, a decision it had to make a month-and-a-half beforehand.
ESPN has a bit more flexibility on other nights when it carries games alongside RSNs, but even those flex decisions are rare.
Turner and ESPN/ABC have two years remaining on their eight-year, $7.5 billion deal, which expires at the end of the 2015-16 season. An exclusive negotiating window between the NBA and its current partners does not open until next year, but talks are expected to start this summer.
With the majority of national sports rights locked in, significant focus is being put on the NBA’s talks. The league’s new deal could double in value from the current pact given the value of the deals signed recently by other major sports properties. For that kind of money, networks are certain to demand more assets and control, including the flexibility to move game times around to suit their television schedules.
On-court struggles by some of the NBA’s marquee franchises led to viewership declines for the league’s TV partners during the 2013-14 regular season.
It marks the second consecutive season of declines for the networks. (see chart below)
Media writer John Ourand and NBA reporter John Lombardo discuss what the league's TV partners want and the difficulty of incorporating a more flexible NBA schedule.
ESPN averaged 1.68 million viewers this season (1.1 rating), down about 5 percent from 2012-13 and the network’s lowest mark since 2009-10. The decline for ESPN comes despite this season having had its most-viewed slate of Christmas Day games on record.
TNT averaged 1.9 million viewers this season, its lowest mark since 2009-10. Its average viewership also was down 5 percent compared with 2012-13.
On top of the struggles of the league’s marquee franchises — New York, Boston and the Los Angeles Lakers all missed the playoffs this year for the first time in league history — TNT’s telecasts this season had double the number of games decided by 20 points or more compared with 2012-13 (12 games).
Despite the viewership drop-off, this season still ranks for TNT as having had the fourth-largest audience in its 30-year history with the league.
NBA TV finished with an average of 316,000 viewers for its 98 games this season, down 6 percent from last year. However, the league-owned network did see its best audience on record with the Dec. 10 Indiana-Miami game this season (920,000 viewers).
■ Haven’t the last few television deals with NBC been five-year deals?
EVANS: The last three deals, one that predated me and two since I’ve been here, were five-year deals. And when we did this 10-year extension, we still had two years to go on the old deal, so it’s really 12 years from today. So we still had the ’14 and ’15 Derby under the old deal and this takes us out to the 2025 Derby.
■ How did this come about?
EVANS: This wasn’t a formal process. We have a great relationship with NBC, and, I think, they feel the same way about us. So we just started talking about it. There wasn’t one specific thing about a hard number, but one of the things sticking in our minds was in 2024 we’ll have the 150th Derby. That’ll be a huge event. The 100th Derby in 1974 was a big event. It just seemed we should go at least through that, so it wasn’t a scientific method, but that was one of the driving factors. And I think we both valued longer rather than shorter, and 10 was just a round number.
The Kentucky Derby, Churchill Downs’ most famous race, will be on NBC through 2025 as part of a recent deal.
Photo by:GETTY IMAGES
■ Why NBC?
EVANS: The thing I love about how NBC treats our event is it’s NBC Sports, but they have figured out this thing is much more than a sporting event. It’s a fashion show; it’s a food show; it’s a culture show; it’s a lot of things other than a sporting event. They have committed the resources during the program and in advance of the program, using the other NBC assets. Last year — it won’t happen this year — but last year on [Jimmy] Fallon’s show, they had a “public picks a Derby winner” skit. So we get a lot of coverage on other NBC properties other than NBC Sports, and, in the actual telecast of the Derby, they have found a way to treat it other than just a classic sporting event. That has really worked for us and it reinforces what we think the Kentucky Derby is, so we have had a good partner who is doing the things you feel are important to do. You want to extend that as long as you think you can make it work.
■ Is it true you negotiated the extension with NBC Sports Chairman Mark Lazarus?
EVANS: Yes. Mark and me. It goes back to a dinner we had, I don’t remember the date. I think it was last summer, early fall. We got to talking and this came out of it.
■ After the first dinner with Lazarus, how was the deal negotiated?
EVANS: We had a few discussions. It took a couple of months. And a few of the discussions were more social than business. We had no negotiating session where me and six of my folks and he and six of his folks showed up in a room somewhere and met in private caucuses and worked out the details. We basically did this by phone and email.
■ Have you had any other networks come to you?
EVANS: In the past we have. But, I mean, from what I have learned there are some people who think their sports property isn’t presented properly in the television show aspect of it. We don’t hold that view. We think the way NBC treats our product is exactly what we want. So, if you have a great relationship and it’s working and the numbers are supporting it, do it.
■ In the announcement, you said the deal met your financial objectives. Can you expand on that?
EVANS: Sure, I can expand on that. It really did meet our financial goals. We’re not going to talk about numbers.
■ Does the deal reflect the market increase in value of sports rights?
The way NBC treats the Derby “is exactly what we want.”
Photo by:GETTY IMAGES
■ Did you have an outside consultant?
EVANS: No, we just keep track of this ourselves.
■ Is it a large, complicated agreement?
EVANS: No. It’s a pretty simple agreement. I think the thing to think about on this thing is it’s one day for a few hours. There is no schedule. There are not multiple television networks covering the product the way it is with football. It’s not a many month thing, like the Olympics. It’s a fairly simple event and it’s not too hard to get your head around the details because there are not that many details.
■ How many pages is the agreement? What does it cover?
EVANS: It’s probably 10. It is pretty comprehensive. It deals with television rights, domestic and international. Radio rights, domestic and international. Digital rights, same way. The world of technology changes so fast, that I almost guarantee you that there is something that neither one of us have thought of that will happen in the next 12 years [that is not covered]. But, hopefully, we can figure that out when we run into it.
■ What is going on with the 2015 Breeders’ Cup and where it will be run?
EVANS: I don’t really know. We have offered to make Churchill available, if they want to do it. So far nobody has told us a particular year that they want to do it.
■ Does Churchill have a shot at future Breeders’ Cups?
EVANS: I would think so. It would be hard to disqualify Churchill Downs as a place to hold the Breeders’ Cup. It’s done it seven or eight times. It’s produced the highest attendance and handle numbers, I believe, of any host venue. Last year we put more than $40 million in improvements into the property. Somewhere in the neighborhood of 3,000 premium seats. We added The Mansion at the very top end. There are 300 seats in The Mansion. This year we are opening a new area called the Grandstand Terrace, an outdoor, garden-type area to watch the racetrack. We started up, this week, a 15,224-square-foot video board to watch the racetrack, which is huge. Now everybody in the infield will actually be able to see the race.
■ Churchill recently announced a higher takeout on wagers. Will it affect the wagering on the Derby?
EVANS: I doubt it. We are coming off the low point. The Kentucky tracks had some of the lowest takeouts in the country. So it’s not like we were at the top of the list or the highest. So I don’t think it’s that big a shock for our customer.
■ What about the hardcore horseplayers, who are also the biggest gamblers?
EVANS: Well, I am sure somebody somewhere will change their betting behavior. But, in the end, what bettors want to see are large fields, and with higher purses we can get large fields. Someone joked we can take the takeout rate to zero, but if there aren’t any horses to bet on, it doesn’t really matter what the takeout rate is.
■ How big a hit was The Mansion and how can you improve on it?
EVANS: It was a big home run. It’s a little more complex because a lot of the people who are going to be in The Mansion this year, the second year, were there last year. And for the premium prices they are paying, they don’t want to get the same experience again. I don’t know if it’s the highest ticket price in sports, but if it’s not, I don’t know what’s higher.
■ It was reported last year the lowest ticket price in The Mansion was $7,000. Is that accurate? What is it now?
EVANS: Actually that is below the low end. We haven’t talked about that specific number.
From the debut of Josh Elliott to Olympic hits Tara Lipinski and Johnny Weir commenting on fashion, NBC Sports will roll out new elements to complement its traditional, surround-style coverage of the Kentucky Derby.
Network executives believe Saturday’s 140th running of the race will again be one of the highest-rated sports programs of the second quarter of the year. Last year’s race drew 16.2 million viewers, the second most watched Kentucky Derby in 25 years.
The Kentucky Derby draws a crowd on TV — 16.2M viewers last year — and at the track..
Photo by:GETTY IMAGES
Churchill Downs Inc. Chairman and CEO Bob Evans attributes the race’s high viewership over the years to NBC’s presentation and cross-promotion. The network has traditionally plugged the Derby, the first leg of racing’s Triple Crown, on programs ranging from the “Today” show to “Access Hollywood” to “The Tonight Show.” Evans said it was a big reason why Churchill Downs signed a 10-year extension with NBC early this year.
Jon Miller, president of programming for NBC Sports and NBC Sports Network, said to expect the same formula of cross-promotion this year.
“You will see heavy ‘Today’ show coverage from it,” Miller said. “You will see coverage across all the different platforms of NBC because it’s a priority for the company. Quite honestly, it could be the highest-rated sports program — not in prime time — of the second quarter.”
NBC’s broadcast on Saturday will be three hours long, from 4 to 7 p.m. ET, but NBC and NBC Sports Network will broadcast a total of 15.5 hours of coverage for the week, starting on Wednesday. Last year, NBC and NBCSN provided 14.5 hours of coverage.
Tara Lipinski and Johnny Weir will cast an eye on the Derby’s plethora of headwear.
Photo by:GETTY IMAGES
“My first Kentucky Derby was in 2001 when the show was a 90-minute show with 25 cameras and a handful of reporters,” Hyland said. “And now in 2014, we are going to be producing 15 1/2 hours of coverage over four days and I have more than a dozen announcers in various roles.”
Hyland got the idea to put Brothers, a mainstay of NBC horse racing coverage for years, on top of the new video board about two months ago in meetings at the Louisville, Ky., racetrack. Brothers will wear a helmet camera, and Hyland hopes she will provide a view of the enormity of the video board, as well as the event, which draws more than 150,000 fans.
He also believes the addition of skaters Lapinski and Weir, as well as Elliott, who is well-known to morning show viewers, may add to the race’s strong appeal to women. Last year, the broadcast drew more female than male viewers.
“The inclusion of Johnny, Tara and Josh can only help broaden the scope of this sporting event,” Hyland said. “People who like racing and like major sports events will watch regardless, but I think these three individuals may help attract people who may be flipping through on a Saturday afternoon and stop and stay around a few hours.”
NBC Sports earned a 9.7 rating and drew 16.2 million viewers for last year’s race broadcast of the Kentucky Derby. The network said that 52 percent of the viewers were women, making it the only annual sporting event that draws more female viewers than male viewers.
Miller: “A unified, family experience.”
Photo by:GENE BOYARS
“There are two sports that I’m familiar with that actually skew female,” he said. “One is the Kentucky Derby, and that’s largely based on fashion and hats and mint juleps and lifestyle and the coming of spring and the parties that transcend traditional, competitive sports. The second one is the Olympics, which is far more about the journey. It’s less about the result. And we find women are far more captivated by the journey and how people overcome things and their individual stories and the fact that they might have trained a lifetime for seconds of competition. As a result of that, you promote the Olympics a little bit differently than some of the other sports. It’s far more about storytelling. It’s far more about overcoming adversity.
“How do you engage a female audience? I believe you create a unified, family experience, and make it appealing for women to watch. With the NFL, it has been the growth of women playing fantasy sports. With NASCAR, it’s about character. In the case of hockey, I’m sort of still looking, to be honest with you. But with the Olympics and the Kentucky Derby, you look for those triggers that really pull to the heartstrings and focus on those.”
— Staff report
While there’s no consensus No. 1 pick in next month’s NFL draft, there is a clear leader when sizing up the prospects by their social media followings.
Consensus No. 1: Johnny Manziel tops the rest of the 2014 NFL draft class in both Twitter and Instagram followers.
Photo by:GETTY IMAGES
The former Texas A&M quarterback blows away the field of fellow draft prospects in terms of social media. As of last week, “Johnny Football” had more than 1.5 million followers on his verified Twitter and Instagram accounts — well clear of the No. 2 player in the ranking, AJ McCarron.
The former Alabama quarterback had more than 276,000 followers, while another former SEC player, defensive end Jadeveon Clowney of South Carolina, ranked third, with more than 155,000 followers.
The ranking compares players listed as top prospects for this year’s draft (May 8-10) by NFL.com or CBSSports.com.
Khalil Mack (center) sits far behind Jadeveon Clowney, AJ McCarron.
Photo by:GETTY IMAGES (3)
Several players not expected to be selected high in the draft have sizable social media followings in their own right. Chief among them is Michael Sam, the first openly gay NFL prospect. The former Missouri defensive end famously joined Twitter right before his February announcement and has collected more than 95,000 followers on that platform since then.
Other players of note with large followings based on their collegiate success but not expected to be selected in the draft’s early rounds are Oregon running back De’Anthony Thomas, Georgia quarterback Aaron Murray and Clemson quarterback Tajh Boyd.
NFL DRAFT PROSPECTS RANKED BY SOCIAL MEDIA FOLLOWING Number of Followers Rank Player School Position Total 1 Johnny Manziel Texas A&M QB 785,288 730,376 1,515,664 2 AJ McCarron Alabama QB 276,249 — 276,249 3 Jadeveon Clowney South Carolina DE 89,278 65,772 155,050 4 Sammy Watkins Clemson WR 71,128 57,813 128,941 5 Tre Mason Auburn RB 53,925 60,595 114,520 6 Carlos Hyde Ohio State RB 64,961 40,464 105,425 7 Mike Evans Texas A&M WR 31,977 66,530 98,507 8 Odell Beckham Jr. LSU WR 28,613 67,214 95,827 9 Bradley Roby Ohio State CB 52,346 29,466 81,812 10 Ha Ha Clinton-Dix Alabama S 55,642 18,033 73,675 11 C.J. Mosley Alabama LB 59,984 11,460 71,444 12 Teddy Bridgewater Louisville QB 30,986 19,083 50,069 13 Kelvin Benjamin Florida State WR 17,277 32,142 49,419 14 Louis Nix Notre Dame DT 33,463 11,838 45,301 15 Marqise Lee USC WR 22,780 14,223 37,003 16 Donte Moncrief Ole Miss WR 22,949 13,486 36,435 17 Blake Bortles Central Florida QB 16,882 15,537 32,419 18 Stephon Tuitt Notre Dame DE 20,719 8,382 29,101 19 Justin Gilbert Oklahoma State CB 10,894 17,122 28,016 20 Darqueze Dennard Michigan State CB 15,416 8,999 24,415 21 Dee Ford Auburn DE 16,285 7,064 23,349 22 Allen Robinson Penn State WR 16,158 4,286 20,444 23 Taylor Lewan Michigan OT 18,583 745 19,328 24 Ja’Wuan James Tennessee OT 13,792 5,079 18,871 25 Eric Ebron North Carolina TE 9,726 8,076 17,802 26 Timmy Jernigan Florida State DT 17,536 — 17,536 27 Ryan Shazier Ohio State LB 7,842 8,926 16,768 28 Brandin Cooks Oregon State WR 8,528 7,983 16,511 29 Bishop Sankey Washington RB 8,919 7,182 16,101 30 Calvin Pryor Louisville S 8,470 7,082 15,552 31 Anthony Barr UCLA LB 7,200 8,173 15,373 32 Aaron Donald Pittsburgh DT 3,752 11,143 14,895 33 Kyle Van Noy BYU LB 12,728 — 12,728 34 Derek Carr Fresno State QB 7,322 3,909 11,231 35 Cody Latimer Indiana WR 2,950 7,887 10,837 36 Cyrus Kouandjio Alabama OT 7,699 1,835 9,534 37 Jordan Matthews Vanderbilt WR 9,288 — 9,288 38 Zach Martin Notre Dame OT 6,421 1,852 8,273 39 Jimmy Garoppolo Eastern Illinois QB 5,089 2,254 7,343 40 Kyle Fuller Virginia Tech CB 4,989 1,881 6,870 41 Greg Robinson Auburn OT 6,206 — 6,206 42 Marcus Smith Louisville DE 4,431 1,719 6,150 43 Kony Ealy Missouri DE 3,701 2,376 6,077 44 Davante Adams Fresno State WR 1,251 4,716 5,967 45 Xavier Su’a-Filo UCLA OG 3,208 2,164 5,372 46 Jason Verrett TCU CB 4,732 — 4,732 47 Morgan Moses Virginia OT 2,917 1,554 4,471 48 Ra’Shede Hageman Minnesota DT 2,875 1,455 4,330 49 Deone Bucannon Washington State S 2,027 2,083 4,110 50 Khalil Mack Buffalo OLB 3,857 — 3,857
Note: Numbers as of April 22
Source: Players' official Twitter and Instagram pages, where verified pages were available.
But while the high court’s ruling, expected in the next few months, has the potential to be disruptive to how broadcasters conduct their business, few believe that it will be the pinprick that bursts a sports rights fee bubble.
Over the past two years, I’ve asked sports media executives about their view of Aereo, a service that redistributes broadcast signals via the Internet for a small monthly fee. The fear is that Aereo has the potential to be as disruptive to television as Napster was music — that it would shake up the system so dramatically that the lucrative retransmission consent fees that distributors pay broadcasters would be cut. Any significant cut in retrans revenue threatens broadcasters’ ability to afford multibillion-dollar sports rights fees.
Still, most of the media executives I’ve contacted believe sports rights fees will remain high regardless of how the high court rules, even if the decision leads to significant changes in the television business.
n If the court sides with the broadcasters, nothing changes and the current business model is preserved.
n If the court sides with Aereo, broadcasters will have to change their business model and develop new revenue streams.
It’s become popular to view a Supreme Court win for Aereo as a significant threat to the lucrative multibillion-dollar business that is TV sports. The thinking is that if the court decides Aereo can redistribute broadcast signals without having to pay retransmission consent fees, broadcasters would lose a big revenue stream that has allowed them to compete for sports rights.
That’s because if Aereo is successful, cable and satellite distributors are certain to follow suit and cut their retrans payments. In the last year alone, both DirecTV’s Michael White and former Time Warner Cable executive Glenn Britt publicly said they would mimic Aereo’s strategy should the company win a favorable ruling. That would allow distributors to skirt around retrans fees that are among the most expensive in the industry.
This is where the sports media community sees the biggest potential for danger as it relates to leagues and teams. But broadcasters already have plans in place to preserve the retrans revenue, which brings in billions of dollars per year.
News Corp.’s Chase Carey has said that he would consider turning Fox into a cable channel, shedding the local affiliate system. This would ensure that distributors can’t carry the Fox channel without paying a license fee.
Another option would be to stream the channel. CBS CEO Leslie Moonves has said that he would consider making CBS available over the Internet should the Supreme Court side with Aereo. Just last month, Moonves told a financial conference that an over-the-top network is a real option should Aereo win at the Supreme Court. Moonves was short on details, but any over-the-top service would have to have a subscription component to offset a possible loss in retrans fees.
Both examples would preserve broadcasters’ ability to pay sports rights fees, which is what’s really important to the leagues. But both cases would create headaches for existing media rights contracts the leagues already have signed.
Take the NFL, for example. The league’s deals with CBS, Fox and NBC specify that the league’s games must be carried via a broadcast channel. If broadcast channels become cable channels, those contracts would have to be reworked. Plus, odds are that the leagues would demand a higher payout from a channel that moves from 116 million broadcast homes to 98 million cable homes.
An Internet-delivered channel presents similar problems. Most of the broadcasters’ media rights deals with leagues are for broadcast television. Internet streaming deals tend to have their own, separate contracts. A league would not allow its programming to move from broadcast TV to a less popular platform for free. These negotiations almost certainly would be onerous.
Ever since professional sports leagues started seeing big media rights fees increases, they have seen bogeymen all over the place.
League executives have fretted that online video pirates, cord cutters and aging fan bases threaten the model that has brought them riches.
Leagues and networks work hard to maintain the status quo. That’s been the impetus behind the TV Everywhere push, which has attempted to create an online environment that thwarts cord cutters and pirated streams.
Aereo is nothing more than a new bogeyman. Networks and advertisers still value live sports as the best way to aggregate big, young audiences. That won’t change, regardless of what the high court decides.
John Ourand can be reached at firstname.lastname@example.org. Follow him on Twitter @Ourand_SBJ.
Editor’s note: This story is revised from the print edition.
This year’s World Cup, the first to be held in the Western Hemisphere in 20 years, is poised to break ad sales records for the event’s two U.S. media partners.
Executives with both ESPN and Univision credited more attractive game times and added ad sales inventory for the robust market around the event that starts on June 12.
“Both from a ratings perspective and a sales perspective, it will be by far the biggest and best sporting experience that we’ve had on our air ever,” said Carlos Deschapelles, senior vice president for Univision Sports Sales.
Univision, which holds the World Cup’s Spanish-language rights in the United States, has limited ad sales opportunities left around popular matches such as ones involving the United States and Mexico. Also, Deschapelles said it still has positions available during games, around shoulder programming and on its new sports channel, Univision Deportes.
Univision says it’s seeing a lot of activity in the top ad sales categories, particularly with autos, which were not a big ad sales player during the 2010 World Cup because of the economic downturn. Deschapelles said Hyundai, Chevrolet, Volkswagen and Nissan have bought positions during Univision’s coverage.
Beer (Budweiser, Bud Light and Crown Imports), wireless (T-Mobile and Verizon) and movie studios (Walt Disney Motion Pictures, Buena Vista, Warner Bros., Lionsgate Entertainment) also have proved to be strong categories.
Univision has made Univision Deportes a big part of its sales pitch. In addition to showing live games and pregame and postgame shows, the channel will feature shoulder programming around the event.
“We can have a lot more content on that sports network in the form of specials and studio shows and analysis that we didn’t have before,” Deschapelles said.
For example, he pointed to a series that already is running called “The Legends of the World Cup,” which highlights a different World Cup each week, ending with a recap of the 2010 World Cup just before this year’s event kicks off. Univision Deportes launched in April 2012 and is in 34 million homes, according to Nielsen.
Neither Univision nor ESPN would comment on ad sales pricing or ratings projections around the event.
ESPN, which holds the event’s English-language rights in the United States, also is seeing increased interest. Ed Erhardt, ESPN’s president of global sales and marketing, pointed to two official FIFA partners, Adidas and Coca-Cola, as companies that will have a big presence. As usual, FIFA partners and sponsors are making big ad buys, with official partner Visa, and official sponsors Budweiser and McDonald’s aboard. Volkswagen and Hyundai also are rolling out campaigns around the event.
“It is clearly going to be the most significant media event to happen globally in the next couple of years,” Erhardt said. “We believe we will significantly outpace South Africa. We’re bullish on how the property will do, both in terms of its ratings and demand we’re seeing.”
ESPN not only is selling the live games and shoulder programming around them. It is selling spots around replays for some of the daytime games that it will re-air in prime time.
As with its sales efforts around other properties, ESPN is seeing a lot of interest in digital, Erhardt said. ESPN plans to stream the games to authenticated users via its WatchESPN app, and will provide highlights to digital and mobile users.
“We see digital video as a new marketplace that is really developing,” he said.