The SportsBusiness Journal's Sports Media & Technology Conference 2002 began yesterday at the Hilton N.Y. in Manhattan. The following are highlights from the session: Peggy Smyth, a Partner with conference sponsor Deloitte & Touche, delivered the first address, and noted recent reports of the possible merger of CNN and ABC News, as well as Disney and AOL Time Warner looking to sell their sports teams. Smyth: "You can expect to see many of those affiliates that are distributing their sports content looking to do deals to streamline their operations and become more transparent in the near future. These trends are likely to accelerate soon. The FCC's recent relaxation of the rules over cable and TV ownership expect to let loose a cascade of merger and acquisition activity. We expect to see some TV and cable broadcast partners shopping TV and cable stations, and networks as well, with some networks getting much larger in the future."
PANEL MEMBERS: The keynote panel — titled "Finding the Upside of a Multi-Platform World: Effectively Reaching the Fans, the Industry and the Advertising Community" — featured FSN President Tracy Dolgin, SportsLine.com Founder & CEO Mike Levy, The Sporting News President Jim Nuckols and ESPN.com/ESPN Magazine Exec VP John Skipper.
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| Mike Levy |
POSITIVE VIBES: Levy, when asked whether his Internet operations are profitable, said, "We expect for the first time [in the current quarter] to be cash-flow positive. ... I think, more and more, we will be profitable. We've proved that the subscription model works in fantasy. We generated from zero dollars last year to over $10 million in pay-fantasy revenue, and it's becoming a bigger part of our business. Our revenues for the year will be over $60 million — the bulk of that will be in advertising."
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| John Skipper |
FOLLOW THE LEADER: Skipper: "Michael Eisner announced to investors about a year ago that he would see his Internet business make money by the fourth quarter of the fiscal year, and I always do what Michael tells me to." Asked if ESPN.com is making money, Skipper said, "We are making a positive contribution. The Walt Disney Internet Group announced that it is making a profit for the fourth quarter, and I can assure you I'm not a laggard in that group."
MODEL PLAN: Nuckols: "We feel like we have found a model on the Web that can make money. It's not primarily an advertising-driven model. That's clearly always going to be a key component of it, but people will pay for really good content, ... and people will pay for games. So that's the model that we're looking at — content, games and advertising — you put those three together and manage it smartly, it can be a profitable business."
MULTIPLE COMPONENTS: Dolgin: "We look at what the Internet does for our overall business, including bringing in our partners to spend money on the rest of our business ... so it's not just a singular piece."
REVENUE: Skipper, on whether ESPN has seen increases in revenue from integrated deals across the company's platforms: "Our revenue from integrated deals the last couple years is fairly flat, with most of our increases coming from print budgets and created Internet budgets — because, as all of these [panelists] know, there's not a lot of Internet budgets sitting out there. And that's really because of the difficulty of television ad sales the last couple of years. It's a misperception to think our gains come from integrated deals; they come mostly from the hard work of our sales staff."
AD DOLLARS: In the second panel discussion, OMD Dir of Sports Marketing Tom McGovern said when asked whether sports advertisers are getting more or less "bang for their buck" than they were five years ago: "Certainly, less bang for their buck. ... The prices are going up, and the ratings are going down, so there's no way you can say you're getting better value than you did five years ago" (THE DAILY).
