SBJ/July 21-27, 2014/Media

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  • James assists Fox RSNs in two markets

    LeBron James’ move to Cleveland could benefit Fox Sports as much as the Cavaliers over the next few seasons.

    That’s because the media company, which owns both FS Ohio and Sun Sports in Florida, gained the upper hand in its leverage position in both markets when the teams’ media deals end.

    James’ return to Miami would have given the Heat a negotiating advantage, and it already had planned to open negotiations for an extension with Sun Sports. The Heat’s current deal with Sun Sports runs for four more seasons, expiring after the 2017-18 season. Sun Sports pays on average $20 million per year for the rights.

     
    When James picked the Cavs, it gave FS Ohio and Sun Sports the upper hand in rights talks.
    James’ decision on July 11 to return to Cleveland changes the tenor of those talks.

    Meanwhile, in Ohio, FS Ohio controls the Cavaliers rights into the next decade, sources said. FS Ohio’s TV deal with the Cavs is valued at $25 million per year and ends after the 2015-16 season. However, the media company has contractual rights to extend the Cavs’ media deal well beyond that and is certain to do so.

    Neither Cavs nor Fox executives would comment on their TV deal.

    In the ensuing years, FS Ohio certainly will increase its advertising rates around Cavs games significantly, since the 10-time NBA All-Star James has proved to be a local TV ratings juggernaut for regional sports networks. In James’ last two years in Cleveland (from 2008 through 2010), the Cavs were the top-rated NBA team locally, averaging an 8.66 local rating on FS Ohio. In the past two seasons, without James, the Cavs’ ratings averaged a 2.85, a drop off of 67 percent. Meanwhile, in Miami, Heat games on Sun Sports averaged a 7.0 rating over the last two seasons with James. For the two seasons before James came to South Beach, the team averaged a 2.60 rating, 63 percent less.

    Of course, James’ return is also certain to be a boon for the Cavs, who capped combined full- and half-season ticket sales at 12,000 after James announced his decision to return to his hometown team. The team set up a waiting list of partial-plan holders based on seniority; they’ll receive the first chance to buy full-season plans when they become available.

    The team this week will begin selling 10-game packages, but doing so at the same prices as last season.

    The Cavs did not raise season-ticket prices after James signed, but they had not announced prices for their remaining individual tickets and group sales inventory as of last week. Team executives said they will take a deliberate approach to leveraging their newly added marquee attraction.

    The team also is in the process of selling its remaining suite inventory, though the team would not disclose specifics of what is available.

    “We want to make sure there is plenty of opportunity,” said Kerry Bubolz, president of business operations for the Cavs. “We are taking a disciplined approach and thinking long term.”

    One of the biggest areas of revenue opportunity for the Cavs is in its sponsorship business. The team does not yet have a floor apron deal, among the most lucrative pieces of sponsorship inventory for league franchises, with deals valued between $750,000 and $1.2 million annually.

    The Cavs also likely will be able to attract more national and international sponsors as demand grows around the team.

    “We will first address sponsorships on a local, regional and national basis,” Bubolz said. “China is an area where we have done business before.”

    Given that James last year was the league’s top jersey seller for the sixth time, the Cavaliers can expect a merchandise windfall, as well. Cavs guard Kyrie Irving last year ranked ninth in leaguewide jersey sales.

    “This is bigger than just the Cavs” Bubolz said. “This goes beyond the walls of the arena.”

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  • CBS to show more PBR events as part of deal

    Professional Bull Riders has extended its media rights deal with CBS in a move that will increase the number of events that will be carried by the broadcast network to 14 a year, up from 10 annually.

    CBS would not disclose how much it is paying PBR as part of the new multiyear deal, which is expected to be announced this week, but the deal is similar to the rights agreement that CBS and PBR signed two years ago. The main change is that starting in 2015, CBS will increase the number of events carried on its broadcast network.

    That jump in coverage is what PBR officials were seeking, and they believe it serves as a healthy indicator of where their sport fits in the overall CBS sports-rights hierarchy.

    As part of the new deal, CBS will group PBR alongside its other major properties, like the NFL and the NCAA men’s basketball tournament — whereas in the past, PBR was grouped under the “CBS Sports Spectacular” banner alongside niche sports, said PBR Chief Operating Officer Sean Gleason.

    “This is the best deal in PBR television history,” Gleason said. “This deal really takes us out of the ‘CBS Sports Spectacular’ world into the PBR-branded world on CBS. We’re excited about the opportunity to live alongside CBS’s other sports programming, whether it’s the NCAAs, the Masters or the NFL as a major, committed sports property.”

    In addition to the 14 events on CBS, the deal provides for between 36 and 40 Built Ford Tough Series events on CBS Sports Network, which Gleason said is “about status quo” from the current rights deal.

    The agreement continues a decade-long relationship between PBR and CBS. Last year, PBR telecasts on CBS averaged a 1.1 rating.

    With its current rights-fee deal ending, PBR spent the past several months talking with other networks about its programming. Ultimately, it decided to stick with CBS, Gleason said.

    “The sport is in a good place,” said Dan Weinberg, CBS Sports Network senior vice president of programming. “It has broad-based appeal from one end of the United States to the other, and it has a tremendously loyal fan base.”

    Last October, CBS Interactive signed a deal to produce and manage PBR Live, the digital subscription service that streams more than 100 live broadcasts and on-demand video. With this new television rights agreement with CBS, Gleason said PBR is “renewing and reinvigorating” the PBR Live deal “now that we’re vertically aligned with CBS for the long term.”

    Built Ford Tough Series telecasts are produced by the PBR in conjunction with David Neal Productions.

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  • SEC Net dodging major battles on distribution

    Editor’s note: This story includes updates to the print edition.

    It looks like the ESPN-owned SEC Network will be able to sidestep the normally combative distribution battles often associated with the launch of new sports channels.

    The network’s carriage talks are progressing so fast that sources with two of the country’s top distributors said they expect to have carriage deals in place by the channel’s first football game on Aug. 28, if not earlier.  The channel officially launches Aug. 14.

    It is common for new channels to be mired in public distribution disputes during their launch periods. For the first year of its existence, Big Ten Network did not have carriage deals with either Comcast or Time Warner Cable; and Pac-12 Networks still hasn’t been able to cut a DirecTV deal, two years after the channel’s launch.

    But those problems do not seem to be affecting SEC Network, which has distribution deals with AT&T, Cox and Dish Network in addition to the deal it signed with Comcast late last week.
     
    While DirecTV and Time Warner Cable still are hammering out several deal points for a network that launches in 3 1/2 weeks, the distributors largely have agreed on the channel’s rate card, which is $1.40 per subscriber per month within the SEC’s 11-state footprint, and 25 cents per month outside of it, sources say.

    If all of these distributors sign a deal by the channel’s Aug. 14 launch, the network will open with a footprint of around 75 million homes, which would be the biggest network launch in cable TV history. ESPN executives have said they expect SEC Network to launch with a similar footprint as ESPNU, which is
    in 74 million homes.

    Sources said the remaining distributors are not as focused on the Aug. 14 launch as they are for the channel’s first football game on Aug. 28, which will be between South Carolina and Texas A&M — two schools in Time Warner Cable markets. Later that day,
    the network will carry Vanderbilt, in a Comcast market, against Temple, which is in Comcast’s hometown of Philadelphia.

    SEC Network programming before the start of football season primarily will focus on live Olympic sports events, such as soccer and volleyball, as well as analysis about football.

    Privately, distribution executives grumble about the continued trend of networks slicing and dicing content. Distributors believe that they are having to pay for a new channel that uses content that was available on other channels in past years. But several executives cited the fervency of SEC fans as a reason why negotiations are progressing.

    The DirecTV deal is proving to be the most complicated. The satellite operator’s overall deal with Disney/ESPN concludes at the end of this year. SEC Network talks are part of that bigger deal, providing the SEC Network a level of leverage most new channels don’t enjoy.

    It’s likely that DirecTV will strike a deal to carry SEC Network before reaching its larger deal with Disney/ESPN.

    Negotiations with Comcast and Time Warner Cable hit snags over ESPN’s insistence that cable operators carry the channel on a digital basic tier, even in non-SEC markets.

    Another holdup came from Texas, where ESPN is looking for a full in-market rate — $1.40 per sub — because of the presence of Texas A&M. That means Time Warner Cable would pay an in-market rate in Austin, home to the University of Texas, and Comcast would pay the same rate in Houston, not a hotbed for Texas A&M fans. So far, ESPN has not backed down from the entire state as in-market.

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  • World Cup 2018: Fox Sports and Gus Johnson get their turn

    With a successful Brazil event in the rearview mirror, here are a few thoughts on the next World Cup, which Fox Sports will produce from Russia in 2018:

    Looking for an American voice

    Soccer fans hate the idea of Gus Johnson as Fox’s main play-by-play voice for the next World Cup, judging by my Twitter feed and conversations.

    Fox Sports looks to Gus Johnson as its World Cup voice.
    Photo by: FOX SPORTS

    Despite the criticism, Fox seems determined to move forward with Johnson and develop an American voice that stands in contrast to the much praised British voices that led ESPN’s coverage this year.

    This bears watching.

    Typically, TV network decisions are made with the casual fan in mind. Avid fans may not like a specific announcer, but they’ll still watch.

    This strategy doesn’t work for the World Cup. If avid fans don’t like ESPN’s announcer, they could have turned to Univision. If they really can’t listen to Johnson in 2018, they’ll watch Telemundo.

    An ESPN executive said the network found out that the most successful soccer telecasts have to get buy-in from the sport’s hard-core fan base.

    That’s not the case in other sports.

    The situation reminds me of 2006, when ESPN made Dave O’Brien its top soccer voice, a move that was heavily criticized by U.S. soccer fans.

    I reached out to ESPN to see whether O’Brien was willing to give a perspective about what Fox and Johnson could expect over the next four years.

    O’Brien declined my interview request, but emailed the following comment, where he said the development of an American soccer voice is necessary for the sport to continue to grow in the U.S.

    “Fox is giving Gus a five-year run up to the World Cup, and that’s crucial. (I’m envious because, looking back, mine was six months!) Five years of matches, qualifying, immersion. Their broadcasters will require that time, given how sophisticated the viewers are. And ESPN’s coverage in Brazil raises the bar incredibly high for Fox in Russia. I look forward to an American voice when the U.S. plays in ’18. Now, I love Ian Darke. He’s sensational — a stroke of genius — and he’ll be terribly missed in that role. But a U.S. raised voice will provide an American perspective. Not cheerleading, but context. Maybe that’s the next step in binding this magical game to our country.”

    The DVR effect

    The safest bet to make for the 2018 World Cup is that TV ratings will drop significantly. Unlike Brazil, which is close to U.S. time zones, the games from Russia will be played at odd hours in the United States. 

    But some TV ratings numbers from Brazil suggest that Fox may not be hit as hard as some believe.

    About 12 percent of World Cup viewing from Brazil happened via a DVR, which is an absurdly high number for a live sports event. In general, DVR viewing for live sports in the United States is 2 or 3 percent. 

    That means that a significant number of people made the effort to record and come back to watch the games later in the day. This bodes well for some of the early morning games in Russia.

    The clean screen

    I love FIFA’s requirement that ESPN and Univision have a clean screen during its World Cup games, with only a bug in the upper left corner with the score and an unobtrusive network logo in the bottom right corner. ABC, ESPN and Univision had no bottom line, no promos, no statistics — just a big, beautiful picture.

    Among U.S. sports properties, only the Masters demands that its network partners keep their screens so clean. I wish more would follow that lead.

    American consumers bought big-screen high-definition televisions based on the quality of the video. I hate the fact that so many networks have shrunk the picture to give unnecessary scores, stats and graphics.

    With more people using a second screen for that kind of information, sports networks should make a move to declutter the TV screen during live games.

    Soccer for all

    The event got coverage on morning shows, even on networks that didn’t have broadcast rights.

    I was struck by the amount of World Cup coverage on networks that didn’t have World Cup rights. It was an ESPN and Univision event, but all the network morning shows and nightly news telecasts seemed to have easy access to highlights and World Cup athletes. 

    ESPN said it was a conscious decision to allow competitive channels to show highlights as soon as its postgame show ended — a move that stands in contrast to how NBC treats the Olympics. ESPN has long been irked by restrictions that don’t allow it to show Olympic highlights until after NBC has ended Olympic programming for the day.

    “We believe the Olympics are leaving some viewers aside by restricting news coverage,” ESPN spokesman Mike Soltys said.

    It will be interesting to see how Fox Sports treats this in 2018. Will Fox want “SportsCenter” to show highlights to an overnight game that ends before most Americans are awake? My bet is that Fox will take more of an Olympic approach in four years.

    John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.

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