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The biggest challenge for startup digital video network 120 Sports? Find a place for itself within the daily viewing habits of sports fans.
The Chicago-based venture began live programming last week after several months of preparation and public anticipation. It did so with a potent mix of infrastructure and assets that include ownership stakes and content rights from nearly every major U.S. sports property except the NFL and a custom-built, reconfigurable studio in the Harpo Studios complex that once housed Oprah Winfrey’s talk show.
The digital network began programming last week.
120 Sports executives said the company’s primary focus for the duration of the calendar year is to build awareness in a crowded media landscape, and, as a result, marketing will be heavy. Each of the equity partners, including Silver Chalice, the NHL, Time Inc., Campus Insiders, the PGA Tour and MLB Advanced Media, will promote the venture in both online and offline media. Specific plans include print ads on Time Inc. titles such as Sports Illustrated, and online ads and links within the leagues’ own home pages. The company is also pursuing an aggressive social media strategy, led in part by an active Twitter feed.
A 120 Sports sign will soon be installed on the outfield wall of U.S. Cellular Field, home of the Chicago White Sox, who also own Silver Chalice. And in late July billboards and subway ads for 120 Sports will begin appearing in New York.
“We’re really focused on building an audience base that is coming back regularly, and increasing their engagement, and we’ll worry about ubiquity later,” said Jason Coyle, 120 Sports president and vice chairman of Silver Chalice. “Our main thing is really about getting into the routine of a sports fan.”
The lack of the NFL either as a content partner or equity holder remains a notable absence, and that league is instead prepping its own digital video service, NFL Now, for launch in August. But Coyle said, “There’s been ongoing discussion and mutual interest. The timing just hasn’t been there yet, but conversation remains respectful.”
For now, 120 Sports also is pursuing a “less is more” strategy with regard to advertising sales that will provide the totality of company revenue until an additional subscription-based offering is introduced next year. Four initial sponsors have signed so far: Geico, Verizon Wireless, Nissan and Transamerica. Each was said to be a “premium level” sponsor, and Coyle said that while a fifth launch partner may be added, anything beyond that is not in the initial business plan.
“We’re trying to make sure the ad inventory is not out of line with a great content experience,” he said. “If we get too heavy with ads, we run the risk of turning people off.”
Silver Chalice is co-selling the inventory along with Sports Illustrated and its parent, Time Inc., which has made 120 Sports a core part of a larger digital transformation for Sports Illustrated. The venerable sports title last week also debuted a new, responsive-design website and is prepping a mobile-focused daily fantasy game to debut this week.
SI will be getting the traffic from 120 Sports as part of its reporting for monthly comScore metrics reports, but there have been no publicly delineated audience goals.
“We’ll be very happy if in six months the brand has become well known, out there in the sports media landscape, and usage is part of fans’ daily consumption,” said Jim DeLorenzo, SI Digital vice president and general manager.
120 Sports occupies a unique position as the only multisports content network, either linear or digital, that is also owned by many of the same properties it covers. Company executives, however, vowed they will be pulling few punches.
“We have three rules,” said Andre Mika, 120 Sports senior vice president of programming and production. “Don’t take shots at commissioners, know the facts and don’t jump the gun.”
Nothing will change in the sports television business as a result of last week’s Aereo decision at the Supreme Court, and that’s good news for leagues that have grown to depend on ever-increasing rights fees from sports networks.
The NBA can remain secure in the knowledge that its projected media rights windfall will not be threatened by lowered retransmission consent revenue at ABC, Fox, NBC or any of its potential bidders.
The Big Ten Conference can expect broadcast networks ABC and Fox to have the resources to pay a healthy media rights fee increase when it starts negotiating a new deal, probably next year.
It’s the same story for European soccer leagues like the Premier League and La Liga when their rights come up. The U.S. sports rights bubble is not about to pop.
The sports industry dodged a bullet last week when the Supreme Court ruled 6-3 against Aereo, a service that redistributes broadcast signals via the Internet for a small monthly fee.
Media writer John Ourand and editor Tom Stinson talk about CBS's Thursday night NFL package, as well as last week's Supreme Court decision concerning Aereo and what it means.
The court’s ruling ensures that the status quo will remain in place for the TV business, which means that broadcast networks will continue to reap retransmission consent fees from cable and satellite operators.
“Nothing changes in the business as a result of this decision,” said Adam Chase, an attorney with Washington, D.C., law firm Cooley, which specializes in media issues. “The court left a couple of decisions for another day — issues dealing with cloud-based services and network DVRs. But this protects the structure that’s been in place.”
In a series of TV interviews last week, CBS CEO Leslie Moonves said his network expects to bring in $2 billion in retransmission consent fees by 2020. Those fees helped fund CBS’s $275 million deal for a package of Thursday night NFL games this fall.
Had Aereo prevailed, those fees would have been threatened as cable and satellite distributors likely would have adopted Aereo’s business model and cut their retransmission payments.
“Now broadcasters don’t have to look at other business models and can maintain the status quo,” Chase said. “They don’t have to consider turning their broadcast channels into cable networks or wireless services.”
Before the ruling, News Corp.’s Chase Carey said Fox could shed the local affiliate system and be turned into a cable channel. Moonves talked about turning CBS into an over-the-top network.
Both plans would have kept Aereo from using their signal and preserved the networks’ retransmission fees. But they likely would have caused existing sports rights contracts to be changed.
Broadcasters’ media deals are cut on the basis of reaching all 116 million broadcast TV homes. If CBS, for example, became a fully distributed cable network at 99 million homes, how much extra would a league like the NFL charge for the loss of those 17 million homes?
Because of last week’s Supreme Court ruling, broadcasters will not need to find out an answer to that question. When asked last week what the ruling means for CBS, Moonves could not help but mention the country’s top TV property.
“We will continue to deliver to the American consumer the NFL,” he told Bloomberg Television.
The PGA Tour has signed a multiyear deal with Fortune magazine that makes the publication the official business knowledge sponsor of the PGA Tour and Champions Tour.
Financial terms of the deal were not available. The agreement, which runs through 2016, was expected to be formally announced this week.
“Their audience and our audience have a lot of overlap with business executives and business professionals,” said Rob Ohno, senior vice president of corporate marketing for the PGA Tour. “We think that’s a great match. They’re going to help us get some of our messaging out to that audience.”
The agreement comes on the heels of the launch of the revamped Fortune.com. As a member of the PGA Tour’s official marketing partner program, Fortune will have a platform to connect with other tour sponsors. In addition, the partnership offers Fortune the opportunity to work with other PGA Tour partners that are hoping to reach a decision-making audience.
“Fortune, based on our target audience, is a great fit with the PGA if you think about the fact that the folks who are reading Fortune are looking to accelerate their business success by reading Fortune to obtain knowledge so they can obviously elevate themselves in the business world,” said Eric Danetz, publisher of Fortune. “They also have personal passions, one of which we know is golf, so working with the PGA allows us to have a relationship in that vein. But also working with the PGA allows us to get closer to the brands that we work with on a daily basis, as well.”
Fortune will publish numerous PGA Tour-themed sections throughout the tenure of the deal, focusing on topics pertaining to golf and the interests of readers such as travel and the business of golf. The specific content has not been determined, but Fortune plans to run two sections this year and a minimum of five or six in 2015.
CBS’s asking price and ratings guarantee for the new Thursday night NFL package make it the league’s second-most expensive offering, trailing only NBC’s Sunday night package — the highest-rated prime-time show on broadcast television last year.
Sources said CBS executives have been asking for around $600,000 per 30-second spot for its Thursday night telecasts. That figure is below NBC’s “Sunday Night Football,” which is commanding closer to $700,000 per 30-second spot for the upcoming season, but above ESPN, which is asking around $500,000 for “Monday Night Football,” the NFL’s other prime-time series.
Media writer John Ourand and editor Tom Stinson talk about CBS's Thursday night NFL package, as well as last week's Supreme Court decision concerning Aereo and what it means.
NBC has the rights to next year’s Super Bowl and has been packaging some of its “Sunday Night Football” commitments with spots in the big game. NBC is asking for a record $4.5 million per 30-second spot during the Super Bowl. Fox sold spots for as high as $4 million per 30-second spot during this year’s game.
NFL Network, which had Thursdays to itself, will now share eight games with CBS.
Photo by:AP IMAGES
ESPN averaged an 8.6 rating for “Monday Night Football” last season, the cable network’s third-highest rating since it acquired the “Monday Night Football” package before the 2006 season.
The sports media industry is especially interested in the performance of “Thursday Night Football” on CBS. In February, CBS signed a deal to pay $275 million for the rights to an eight-game package of games that previously was only offered on NFL Network. The eight games will be simulcast on NFL Network. CBS also will produce eight other late-season games, featuring its top talent like Jim Nantz and Phil Simms, that will appear exclusively on NFL Network. The $600,000 price tag and 12-rating guarantee are only for the games carried by CBS and simulcast on NFL Network.
The league holds a one-year option on the deal and plans to take the package to the open market in the next year or two, where it is expected to draw interest from all the broadcast networks as well as ESPN and Turner. If CBS is able to increase the package’s ratings to where it’s on par with “Sunday Night Football,” the cost of the package will grow in line with it. NBC pays an average of $950 million per year for the rights to “Sunday Night Football.” That figure is for a full-season schedule, plus playoffs.
So far, CBS said the market is active and described the initial response to “Thursday Night Football” ad sales as positive.
CBS’s pitch is twofold. It’s selling advertisers on prime-time Thursday nights; CBS has been the top-rated broadcaster on Thursday nights, a standing that it believes will allow it to draw in more casual fans than other networks. The network also is selling advertisers timing. Its executives believe that advertising messages are more effective leading into the weekend rather than coming at the end of the weekend. Thus, its message to advertisers and consumers is, “Football Starts Here.”
CBS has used this message in its pitch to Hollywood studios, for example, that are looking to drive attendance over the weekend. It also is using the pitch on retailers looking to promote weekend sales.
CBS has not yet announced the advertisers that have bought positions in “Thursday Night Football.” Sources said Lexus has taken a presenting sponsorship for the network’s halftime show.
There was a divergence of opinions from the buying community. Some, like John Turner of Zenith Media’s sponsorship intelligence unit, expressed optimism. But CBS’s ad sales efforts have met with some pushback from the advertising community, which views three nights of prime-time NFL programming as creating a glut in the marketplace.
“Everybody wants the NFL, but you start to wonder about how many new brands can afford the cost of entry,” said Tom McGovern, president of Optimum Sports.
Mobile” has become the shiny, new application that is drawing lots of focus from sports leagues and teams.
While content and sponsorship opportunities have not yet kept pace with demand, teams are telling sponsors to think more about getting involved with mobile applications. That was one of the main messages coming out of Monumental Sports and Entertainment’s first Partner Summit, which was held earlier this month on the Verizon Center floor in Washington, D.C.
The push to digital is a natural sales pitch for Monumental, which operates the over-the-top service Monumental Network.
“Television, more and more, is all about digital. Radio, more and more, is all about digital.”TED LEONSISMonumental Sports
Photo by:MARC-BRYAN BROWN
But the way the event’s speakers evangelized about mobile technology, if it was a growth stock, they all would be buyers. Ted Leonsis, Monumental Sports’ majority owner, chairman and CEO, said that mobile is poised to become more than a complement for TV viewing. He sees it becoming a media force on its own.
“It’s important that you create, craft and think digitally and socially,” he told the roomful of sponsor executives. “The other media are important, but a part of that mix. Television, more and more, is all about digital. Radio, more and more, is all about digital.”
Media writer John Ourand and editor Tom Stinson talk about CBS's Thursday night NFL package, as well as last week's Supreme Court decision concerning Aereo and the Monumental Sports Partner Summit.
NBA Deputy Commissioner Mark Tatum also spoke of how the league has noticed the growing popularity of mobile applications. He said he’s been surprised at how quickly mobile usage is growing among the NBA fan base, which is a reason why the NBA cut a deal to be featured on Amazon’s new phone. “The world is looking mobile,” he said. “This is how people are starting to and are going to continue to consume our games. We need to be there first.”
This trend should not come as a surprise to some. Almost half of sports properties’ digital usage comes from mobile, and tablets are outselling laptops and PCs, according to Chris Russo, a former NFL executive who is the president of CR Media Ventures.
“Mobile really is the future,” he said. “The real challenge now is how do you also make mobile an appealing venue for advertisers and sponsors. What are the kinds of ad views or integrations that are relevant?”
The way the executives at the event spoke of the growth potential for mobile applications, it made the idea of a broadband connection seem passé.
“If you look back at the history of sports media, sports drives adoption of media technologies, from radio, to black-and-white TV, to color TV to satellite and cable to satellite radio to mobile,” said Jimmy Lynn, co-founder and vice president of Kiswe Mobile, a company that is making a big bet on the emergence of mobile technology. “People have been making the transition from traditional media to the Internet. Now the transition is going to mobile, especially in a global arena.”
The focus may have been on mobile because sponsors don’t need a hard sell on the value of TV sports. The NBA is expected to at least double the average annual value of its TV deals with ESPN and Turner Sports. The league has started informal talks with its network TV partners, and Tatum alluded to the viewership of live sports as a key negotiating point for the league.
“What we’re seeing in the marketplace is that the demand for live sports content has never been more valuable,” Tatum said. “It’s a sure-fire thing. When ABC has the Finals on their network, they’ve won the night every night for the last 40 times. There’s nothing that aggregates audience like live sports programming.”
Leonsis, who is head of the league’s broadcast committee, used his daughter’s viewing habits as an example. She watches “Gossip Girl” on demand and has no idea what network used to carry it. Leonsis said that’s rarely a problem with sports, where viewers watch live.
“The NBA playoffs everyone knew was on ESPN and Turner,” he said. “[Sports] is the last communal real-time content that sponsors value.”
Leonsis also said that sports compares favorably to other live programming, like news. He said Washington Wizards playoff ratings attracted as many viewers as “six, seven, eight CNNs at the same time. … There’s a lot of news out there. Consumers love sports. Consumers spend lots of time watching sports. They value it.”