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November 13, 2013 03:26 PM
Digital media has made huge strides since Ted Leonsis spoke at the first Sports Media & Technology conference more than a decade ago, but he said digital advertising has been slow to catch up.
Leonsis, the founder and CEO of Monumental Sports & Entertainment and the subject of a one-on-one interview this afternoon at the 2013 edition of the conference, estimated that when he made that first appearance, people spent three hours a day online, and that amounted to 17 percent of their media consumption. But at the time only 5 percent of advertising was devoted to digital media. His goal was for that ratio to become 1:1.
The ratio has improved today, but as more people are spending more time online, advertising spending is still behind the pace. He expects that to change. “Young consumers, first and second generation, are spending the majority of their time on the net … but still the advertising and promotional dollars haven’t followed in lockstep,” Leonsis said. “But as these young people move into positions of management at agencies and companies, that will sort itself out and the floodgates will open.”
Returning to the conference to speak this year helped Leonsis appreciate just how far digital has come from his days at AOL and his early days of sports ownership when he bought the Washington Capitals 14 years ago. “We’ve gone from being a ‘new’ media to being ‘the’ media,” Leonsis said. “Everything centers around digital.”
ENTREPRENEURSHIP TODAY: Leonsis said digital and online efficiencies today have made it a great time to be an entrepreneur because people can take traditional businesses and make them more efficient. His investment group, Revolution Growth, has invested in several online companies that are digital iterations of other businesses. Groupon is a company that digitized the coupon. Zip Car digitized the car rental business. And CustomInk, which just received a $40 million investment from Revolution Growth, is digitizing the apparel business. “It’s never been a better time to be an entrepreneur,” Leonsis said. “It’s never been a better time to start a company. The consumers are there. The devices are there. The tech is there. The capital is there. It’s just waiting for someone to launch these businesses.”
MONUMENTAL SPORTS & ENTERTAINMENT NETWORK: Leonsis said his long-term goal is to turn the broadband network behind the Capitals, Wizards and Mystics into a production house with “the ability to show something in our arena, in real time, in all the televisions in the arena and outside on the signs and in those virtual screens on everyone’s site and everyone’s phone.” Leonsis would like to see it broadcasting concerts, and professional, college and high school sports games that take place at the Verizon Center. “We can look at all of that as ancillary opportunity for us,” Leonsis said. The Wizards and Capitals both have long-term rights deals with Comcast Sports Net. The Wizards have seven years left on their deal. The Capitals have three. Leonsis said that he envisions doing one of three things with those rights when they become available. “One would be that we would partner in a big way with Comcast,” Leonsis said. “I certainly believe we should have ownership in that network and a large voice in the programming of that network because we know our fans and our community extremely well. Or we would launch our own network, the Monumental Sports & Entertainment Network, or we’ll partner with some other sports network.”
Biggest inspiration: A 75-year-old Jesuit priest at Georgetown University who helped Leonsis, an English major, use a computer to determine that Ernest Hemingway wrote Old Man and the Sea in the 1930s, not 1950s. Leonsis said, “I went from being a liberal arts major, an English major, to someone who understood algorithms.”
On sports ownership: “No other business gives you the psychic uplift like owning a sports team. But the down beat, you lose a game seven in the playoffs, it’s like death.”
His favorite part of ownership: “It’s the fan interaction. I’ve probably exchanged half a million emails. …I’m an extrovert by nature, and I get a lot of energy from that. It’s absolutely amazing. … People will come up to me in a mall or a restaurant and say, ‘Do you remember me? I sent you an email in 1999.’ The passion and enthusiasm fans entrust in you is like no other business.”
Then downside of ownership: “In sports, there’s one winner and 29 losers. The assets, from a business standpoint (of the teams I own), have dramatically increased in value … but we haven’t won a Stanley Cup or NBA championship, so I’m a failure. That’s what this business is about. One winner and 29 losers.”
In his downtime: “I read an awful lot. I try to read in totally different areas. Getting outside your comfort zone is important. I’m trying to reinvent my way of thinking to be more data driven. I am an English major, so studying a lot of math and reading about a lot of math thinkers … exercises important parts of the brain.”
Why he blogs: “It’s left-brain right-brain. I’m outgoing. I’m creative. I grew up living my life on the Net. … It’s a natural way to communicate. In the second, other part of your brain, it’s a good business move to control your message. I’m a media company.”
By the numbers:
$28,000: His family’s maximum income growing up in Brooklyn where his father was a waiter and his mother worked at a chewing gum factory.
200: Number of consecutive sellouts for the Capitals.
$40 million: Invested in CustomInk, a custom apparel company, by Leonsis’ investment group Revolution Growth.
November 13, 2013 02:00 PM
Standing the Test of Time
Steve Cohen, SiriusXM Satellite Radio
Chris Corcoran, WestWoodOne Sports
Traug Keller, ESPN
Chris Oliviero, CBS Radio
Despite that increasing audience, the panelists acknowledged that they have not done enough to communicate the power and influence of sports talk radio and need to do a better job conveying their successes to both advertisers and audiences. “We’ve always been second-class citizens to TV,” said Steve Cohen, SiriusXM Satellite Radio senior vice president of sports programming. “It’s always been more difficult for us to do our job. But unlike TV, we’re an interactive medium. We can bring people closer to the teams they love.”
Similarly, the panelists said the demands of being a sports talk radio host are often misunderstood. “A lot of people have really underestimated what it takes to host a daily sports talk radio show,” said Chris Oliviero, CBS Radio executive vice president of programming. “Mike Francesca goes on for five hours every day with no teleprompter and no script. It’s basically him and a phone and a microphone. So you have to have an incredible work ethic and really strong entertainment value.”
On being a successful sports talk radio host: “If you’re not getting in trouble once in a while, you’re probably not pushing things hard enough,” Keller said.
On the best day part on sports talk radio: “If you look at the finances, morning drive is our prime time,” Keller said. “That's when the boxcar numbers occur.”
On the power of a sports talk radio host: “If you talk to teams, in their markets, it’s the sports talk radio host that is a key influencer, not necessarily the guy on the 11 p.m. TV news or the local newspaper columnist,” Oliviero said.
November 13, 2013 01:19 PM
November 13, 2013 12:21 PM
Perspectives from the Top
Bill Daly, NHL
Lenny Daniels, Turner Sports
Paul Fichtenbaum, Time Inc.
Brian Rolapp, NFL Media
TECH COMPANIES BIDDING FOR RIGHTS? Rolapp said companies like Google or Apple are “so flush with cash they can do whatever they want. It’s really a question about developing a model that works for them. We haven't seen that yet.” Daniels said many of these tech companies work because they are “hyperfocused on what they do.” Daniels: “There would really need to be a shift at these companies to where they feel they needed to be a media company. I just don't know that it is in their DNA.”
NEW WAYS TO CONNECT WITH FANS: NHL Deputy Commissioner Bill Daly said the league is now serving fans “in ways they never had been able to before,” including player tracking technologies on NHL.com.
ANOTHER THURSDAY NIGHT NFL PACKAGE? Rolapp said there is “no timetable.” Rolapp: “Nothing is off the table. ... I don’t think it’s eons off, but it’s more in the near future.”
MOBILE USAGE, MONETIZATION: Fichtenbaum said a recent surprise has been that people are “reading long form” more on mobile, with about 51% of those types of stories being consumed via mobile devices. Fichtenbaum: “The level of engagement was really off the charts for some stories that I never would have thought would have worked very well on mobile.” Daniels said mobile monetization “will take time for people to figure out.” Fichtenbaum: “It depends on the content as to whether it will be a moneymaker. A subscription model can work.”
IMPROVING IN-STADIUM EXPERIENCE: Rolapp said that “if you don’t have a wired stadium, if you don't have an information highway where people can get this content, it’s irrelevant. But first, it would be nice if you could just make a call or send a text. You have to start there. It requires short-term action if you’re going to get ahead.”
DOLPHINS SCANDAL COVERAGE: Rolapp feels there was “a lot of information swirling around, some informed, some not. … The facts are not out yet and you have a lot of opinion and commentating.”
WHAT SPORTS MEDIA STORY ARE YOU FOLLOWING? Daniels and Fichtenbaum both said NCAA reforms. Daly said the conclusion of the NHL’s Canadian TV rights deals. Rolapp said the story to watch is more consolidation in pay TV.
November 13, 2013 11:52 AM
When its IPO was launched, there was something noticeably different about Twitter headquarters in San Francisco. “We had basically the entire workforce — about 1,000 employees — all showing up at 6 in the morning,” said Twitter COO Ali Rowghani during Wednesday morning’s second featured interview at the 2013 Covington & Burling Sports Media & Technology conference. “Our engineers often come in after 10 a.m. That was the only thing that felt different. Otherwise, internally at Twitter, you would be surprised at how it was business as usual.”
Rowghani said there was a reason for that. “It sort of speaks to the ideology of the company,” he said of the staff-wide reaction. “We see the IPO not as an end, but as a means to an end.” Rowghani insisted that the IPO, with the mandate of quarterly reporting, is a positive for the creative output of Twitter. “There’s no place to hide,” he said. “We feel that the pressure of being a public company will make us better. It’s a quarter-to-quarter challenge for management to keep its eye on the long term. It comes down to our discipline as a management team, how we manage for the long term and not get too caught up in a short-term vision.”
On what Twitter can do better: “I think that we can make Twitter easier. It’s amazing to me that the hashtag is essentially a mainstream notion. The hashtag was invented by a Twitter user to help make sense of it all. Now you can't watch 'SportsCenter' without the anchor saying the word 'hashtag' multiple times. It's like 'www' 20 years ago. Having said that, there's a jargon and syntax that makes Twitter difficult and too inaccessible for a mainstream audience. We want to make that easier.”
On one of Twitter’s new developments: “We announced a set of rules to allow any publisher to pick the best tweets of any given subject, from the best cat jokes on Twitter to the best content about the typhoon in the Philippines — from something mundane and trivial to something very important. You can put the best content in a custom timeline and put that timeline anywhere you want — on a website, on a mobile app, wherever. One of the challenges of Twitter is that it’s just a torrent of content. This is a more curated, more organized experience. Twitter doesn’t want to be in the business of curating content. Our role is not an editorial one. We want to create tools that help people curate their content.”
Why Twitter stands out in social media: “The space has gotten very competitive, and I’m sure it will continue to. We are the only platform that’s the combination of being live, public, conversational and publicly distributed. No one else has those four things. You have to make that differentiation valuable to your consumers.”
November 13, 2013 11:22 AM
Michael White is well aware of the image that comes to fans’ minds when they think of DirecTV in 2013: Peyton and Eli Manning in wigs, rapping to a hip-hop beat, touting “Football on your phone.”
Before the featured interview that kicked off the ’13 Covington & Burling Sports Media & Technology conference, the chairman, president and CEO of DirecTV took the stage while the beloved spot featuring the Manning brothers played on two big screens. “They’re both incredible athletes, but they’re great to work with,” White said of the Mannings. “They really got into it. They picked out the clothes and the wigs. It re-enforced our new message — about our mobile.”
Of course, what everyone wanted was an update on negotiations between DirecTV and the NFL for future seasons of Sunday Ticket. “We’re talking lots of money here, so these things take time,” said White. “I’m optimistic that we'll get an exclusive deal done. There are always complications with a deal of this size, like with digital rights. We’re a good partner. We want to continue to build the franchise.”
White explained why the NFL-DirecTV relationship is a mutually-beneficial partnership. “We’ve got two million subscribers that pay for Sunday Ticket, so that’s good for the NFL,” said White. “The highest-rated content of any kind these days is sports. Being linked with the NFL differentiates us from the rest of the competition.”
On DirecTV’s surcharge for certain, large regional sports networks charging more than $7 a month: “We only put it on 15 percent of the country. This is one of those things where our industry is screwed up. You look at some of these mega-markets and it’s a big number on the bill. We had to pass it through to pay for the rising cost of sports in those geographies, so we charged something like $2. The money has to come from somewhere. Ultimately, it comes from the customer.”
On where DirecTV is seeing an increase in customers: “We’re growing aggressively in Latin America. We’re growing internationally.”
On negotiations with SEC: “We haven’t started to look at it yet.” Referring to fans in other parts of the U. S. who are not the slightest bit interested in the conference, White said, “One of the issues will be, who am I taxing?”
On cord-cutting by consumers: “It’s a changing world out there, but so far, I don't see a significant trend in cord-cutting.” Still, pointing to the continued struggling economy, White added, “There are some significant consequences down the road that we better think about.”
On how DirecTV’s negotiations have changed with sports leagues: “We’re looking at ratings and we're assessing their value. It’s a much more data-based negotiation than it has been. You have to try to understand, What can the consumer bear? Every now and then, you have to take a tough stand.”
On the rising cost of sports rights and, ultimately, the cost for consumers: “I have to speak on behalf of our 20 million households that aren’t happy with their bills right now. Our average bill is $100 a month, and there are a lot of people who cannot afford that bill. There is no easy answer. Ratings in sports have never been higher. But the cost of sports is up. The challenge for us as a distributor is that we have to pass that through. I can’t cover that. That’s the real challenge for us in the industry.”
“Sports is best when it appeals to everyone.”
November 12, 2013 04:14 PM
How have sports sponsorships changed in the last few years? 2013 Sports Marketing Symposium sponsor CSE put that question to executives at this year's conference, including NBC's Mark Lazarus, MediaLink's Michael Kassan, the NBA's Emilio Collins and CSE's Adam Zimmerman. Click the video player for highlights of the interviews conducted by CSE's Laura Rea.
November 12, 2013 03:08 PM
ESPN's Keyshawn Johnson said, "I like the way that Stephen Ross is handling the situation because he can't say too much and I also like the way (NFLPA Exec Dir DeMaurice Smith) is handling the situation. … They have to let due process take place, but at the end of the day, I think there will be some serious consequences on both sides, both from the NFLPA (and the Dolphins)" ("Monday Night Countdown," ESPN, 11/11).
CHILDS’ PLAY: FS1’s Trevor Pryce: “The locker room is a place that we’re not going to have much change because we are grown men paid to behave like children. You should not be playing any game once you become 18 or 21-years-old. You're done playing games, you're a grown-up” (“Crowd Goes Wild,” FS1, 11/11).
KEEPING FOCUS: ESPN's Bomani Jones said the "more we make this about Richie Incognito, the more we ignore the big issue and something that's much larger with the Miami Dolphins from the general manager on down.” He added, “This seems to be an institutional issue" ("Around The Horn," ESPN, 11/11).
HELPING HAND: PGA Tour Commissioner Tim Finchem said of Birdies for the Brave, a military outreach initiative supported by the PGA Tour, “Our job is not to provide the services, our job is to raise resources" (“Golf Central,” Golf Channel, 11/11).
NORTHERN EXPOSURE: Former MLBer Tom Glavine said of the Braves’ plans for a stadium in Cobb County for ’17, “Atlanta is growing. Everything is going north, so much of the fan base is up that way and I think it makes sense” (WXIA-NBC, 11/11).
END OF DAYS: Cobb County Commission Chairman John Eaves, on the Braves’ proposed new stadium: “Hopefully, there can be enough community backlash and some potential second-guessing by the Braves, but I think that to me, Atlanta has been the Braves and the Braves have been Atlanta in terms of the renaissance of this city going back to the 1960’s and so why abandon us now?” (WSB-ABC, 11/11).
November 11, 2013 03:55 PM
CBSSN’s Adam Schein, on Spirit Airlines’ “Don’t be bullied by high fares” ad campaign: “It’s distasteful, any time you’re going to capitalize on something that’s so insensitive and a racial slur; that’s beyond poor taste, that’s unacceptable” (“That Other Pregame Show,” CBSSN, 11/10).
PARTING WAYS: RCR Owner Richard Childress, on Kevin Harvick, who won yesterday’s NASCAR Sprint Cup AdvoCare 500 and is leaving RCR for Stewart-Haas Racing in ‘14: “We’ve got a real good understanding between us and we’re looking forward to Homestead and Vegas. … It’s one of those bittersweet deals. You hate to see him go, but you’ve got to be looking forward to next year too.” (“NASCAR Now,” ESPN2, 11/10).
BLAME GAME: N.Y. Daily News columnist Mike Lupica, said of the Dolphins’ bullying issue, “Blame the one who got harassed to the one doing the harassing. Blame the bully or try turning the bully into a victim as some people are trying to do. This is the latest version of Clarence Thomas versus Anita Hill, just with offensive lineman” (“The Sports Reporters,” ESPN, 11/10).
November 11, 2013 09:21 AM
■ On the SMT conference: "I think it's going to have a different feel than the past several years."
■ On the NBA's upcoming rights negotiations: "I think the NBA is sitting particularly pretty."
■ On competition among sports networks: "ESPN is at a different level right now. Their ratings are right now about four times higher than the next highest, which is ESPN2."