Group Created with Sketch.
Volume 24 No. 116

Events and Attractions

From evolving sports rights to consumption patterns to the at-home versus in-venue experience, the opening panel of the second day of the ’12 Covington & Burling Sports Media & Technology conference tackled a long list of issues facing the industry.

Brosnan discusses league's agenda for negotiating
affiliate agreements for MLB Network

AMERICA'S PASTIME: MLB Exec VP/Business Tim Brosnan, whose league just wrapped up national TV rights deals with ESPN, Fox and TBS, talked about the league’s agenda. Brosnan said, “MLB Network is 4 years old now, and our affiliate agreements are for five years. We’ve been working on and are now getting to the point where we’re going to make commitments on how you approach the affiliate marketplace. It’s going to be an interesting process. We expect to do well in that marketplace. What we promised the affiliates when we launched MLB Network, we have over-delivered and then some. So we’re going to get into the question about what sort of compensation ought to be paid for the network. ... I think that you’re going to see us do some things that allow us to have the leverage that we need in the marketplace to get the carriage we think we deserve at the prices we think are fair to us and fair to consumers.” Asked for examples of leverage, Brosnan said, “When you go back and study the original carriage we got for the network, what was a real piece of leverage was the Extra Innings package. Six hundred thousand subscribers helped us drive 50 million subs. If you look at how that out-of-market business has evolved, it’s really a marketplace for both broadcast and online. It’s robust in both places. ... I think you’ll perhaps see a combining of those packages and using that as a lever to help drive distribution for the network.”

ON LOCK-DOWN: NHL COO John Collins was asked early in the panel about the effects of the NHL lockout, and jokingly said, “I was watching the clock and seeing if I’d get out of here without a question.” Collins: “We’re clearly at an important moment right now. We’ve already cancelled games for October and November and last week cancelled the Winter Classic, which is just another regular-season game, but symbolic for us. We’ve got three days, including today, of extended negotiations, so we’re very hopeful.” He also discussed how NHL Network and were covering the lockout: “We were watching all the other networks to see how they handled the lockouts on their networks. (NFL Network) looked at it like it was really an external news organization and really went out of their way to not only give the league perspective, but also the players, which I thought was great. The NBA went a different direction based on certain restrictions their bargaining agreement may have. For us, we haven’t really covered the lockout on our platforms from a news standpoint. We haven’t used it as a bully pulpit to get the league’s message out there. We’ve sort of been very quiet throughout this negotiation and I think we’ll remain that way.”

KICKING IT: Fox Sports co-President & co-COO Eric Shanks, on losing the U.S. EPL TV rights to NBC Sports Network, said, “That was a huge bummer for us. With Fox/News Corp. being the biggest distributor of soccer rights in the world, it was huge for us. We fought hard to try and keep it. We’re still big believers in soccer. We own rights to the World Cup after 2014, still have the (UEFA) Champions League, still have the FA Cup, still have Copa America. So it’s still a big part of our portfolio and we’re as committed to it as ever.”

Rolapp feels NFL Network's 13-game package of
Thursday games helped in talks with TWC

A DONE DEAL: NFL Media COO Brian Rolapp said of finally wrapping up a distribution deal for NFL Network with Time Warner Cable, “(Time Warner Cable Exec VP and Chief Video & Content Officer) Melinda Witmer and I kid about it now, but it was our summer ritual where we would lose three weeks of our lives trying to come to an agreement. And it never came together for a lot of reasons. But I think this year was different, when we went to 13 live games on NFL Network, which really is as close to a full-season package as you can get. But it’s not the total number of games that matters, it’s that the package is spread out over the whole season. When we had an eight-game package that was spread out over around six weeks, if you were a cable operator, and you could just batten down the hatches and get through those six weeks, and tell your subscribers it’ll be okay, then maybe they thought they’ll be okay. That’s harder to do over the course of a whole season. What also helped were key renewals we had with Dish and AT&T, as well as the new deal with Cablevision. Time Warner was the last holdout. But to their credit, they saw the value. They knew for their business it was time.”

VALUE OF ENTERTAINMENT: Brosnan said of the high costs of sports rights, “This weekend I’ll go out to the movies, and if I take my three kids, maybe we’ll get out of there for around $100. That’s on a Saturday night for around three hours. And everyone complains about the cable bill, and we apologize for it. But I think that we should stop apologizing for it. ... Last Saturday, I finally got power back and was able to sit on my couch and watch three hours of college football on various networks, flipping back and forth. Unbelievably good entertainment and it kept me on the couch. And that was one day out of 30 that I pay a bill for.”

ComScore, panel data and other measurement tools are only a starting point for evaluating the value of digital media, but brands are increasingly evaluating the return of a digital spend on objectives rather than reach, a group of researchers and digital ad buyers said during the ’12 Covington & Burling Sports Media & Technology conference at a session called “Sports Sponsorship Investment in Digital Media.” Digitas Senior VP/Media Adam Shlachter said, “Service-side data are great signals in terms of what to expect, but they’re not necessarily good predictors of performance. They’re good predictors of who you might reach. You have to use them to help inform a decision, but I don’t know how you can rely on them to determine what the outcome of a program is from brand to brand.” Universal McCann Senior VP & Managing Partner of U.S. Integrated Investment & Digital Innovation Colleen Soriano pointed to her company’s work with Army and Chrysler as examples of how the importance of ComScore and other measurement services varies from brand to brand. Soriano said that with the Army, digital advertising is “much more about supporting their pillars: strategy, leadership, endurance. They want to bring those to life. A ‘brought to you by’ or shallow vignette doesn’t work for them.” By contrast, she said Chrysler measures the total number of views it gets for a Super Bowl spot on YouTube in the months after the games. Sporting News VP Marketing & Chief Creative Officer Shaun Koiner said that a lot of the difference is rooted in brands’ move in recent years to create and own their own content. Koiner: “Now you have brands who are content creators and the engagement there is different and it’s not measured in traditional ways. You have Army creating content. We’ve worked with UPS to create a specific stat because they’re measuring logistics. … It’s a much deeper experience.”

CREATING A CROSS-PLATFORM MEASUREMENT SYSTEM: Recognizing the limitations of digital measurement, ESPN VP Digital Media Research & Analytics David Coletti noted that ESPN recently partnered with ComScore and Arbitron to create a measurement tool for radio, television, mobile phones, tablets and desktop computers that everyone could use in hopes that brands would have a reliable, cross-platform-measurement system. Measuring mobile traffic has been the most difficult for ESPN and others to do because the device being used varies from visitor to visitor. Coletti said, “It matters a great deal if you’re on an iPhone or Android device. It is something we absolutely have to solve. For example, on an NFL Sunday the last two months we’re seeing a 50-50 split between desktop and laptop traffic and mobile and tablet access. It’s imperative on us as an industry to get the measurement right to the extent we can because, for the ad community, I assume they need justification to make these investments.”

See the conference's full agenda and read more in our dedicated SMT blog.

The business of high-stakes fantasy gaming was examined during an afternoon panel at the ’12 Covington & Burling Sports Media & Technology conference. A recurring theme during the discussion was the black eye on the fantasy sports industry from certain companies not paying out on games in the past. Head2Head Sports GM Stacie Stern said that the issue is always being discussed at the Fantasy Sports Trade Association. Stern: “I don’t know how much regulation we as an association can place on companies. The best thing is to put the power in consumers’ hands. Tell them, ‘Hey, check out this company. Look up their reputation, their history.’... Unfortunately, people are going to be on the bad end of that. It happens in all businesses. I just don’t think we can regulate it.” The issue of the weakened economy was also discussed, but most panelists said they have not seen a real decrease in participation numbers. Stats LLC GM for Consumer Fantasy Games Greg Ambrosius said, “Our numbers are up 38% this year, and last year was up as well. The numbers keep growing and growing. ... People still have a passion for fantasy football and everyone thinks they can win on draft day.” Fantasy Football Players Championship co-Founder & Managing Partner Alex Kaganovsky, whose company has more than 1,000 teams in ’12 with cash prizes reaching the $1.2M mark, added, “This year, we saw absolutely no letup in participation. In fact, it has gone up incredibly.” The panelists also discussed ways to potentially grow interest in high stakes games. Fulltime Fantasy Sports VP/Tournaments Emil Kadlec said, “The opportunity may not necessarily be in televising a draft, but in really following the characters. These people are from all walks of life. Professionals, students.”

See the conference's full agenda and read more in our dedicated SMT blog.

Growth markets, hot sports and the future of the NFL in London were some of the key issues discussed in a Global Sports Media panel during the ’12 Covington & Burling Sports Media & Technology conference. IMG Worldwide CEO Mike Dolan, Perform co-Founder & Joint CEO Oliver Slipper, Payne Sports Media Strategies CEO & Chair Michael Payne and Raine Group Founder & Partner Joe Ravitch looked at some of the latest trends in sports media rights globally. Slipper said, “We are seeing big growth in South America, especially Brazil. But it’s from a small base. Rights inflation is obviously driven by competition, and now there are four or five players out there buying content in that market.” Payne said that media rights from South America are increasing, but are still a small percentage of overall deals. Payne: “It’s only about 1% of the IOC’s total rights package, but it’s serious money. I think Brazil is probably reaching its full level. Of the BRIC markets, the one with the biggest growth potential is China, and that is dependent on the day we have competition. Right now, it’s controlled by the CCTV. But the moment the government opens the door, you will see big increases in China.” Dolan added, “Brazil is red hot. With the World Cup and the Olympics and the explosion of disposable income that is hitting the country and will hit it for the next ten years.”

REVENUE VS. DISTRIBUTION: The balancing of global properties going for revenue in new deals or distribution was also discussed, with Payne warning properties, “You are at your peril if you stretch your revenue an extra 10% and you compromise distribution. If you push your revenue and compromise your distribution, it will come back to hurt you.” Slipper said that most leagues will go for revenue over distribution. Slipper: “There aren’t many sports that take a socially responsible view when it comes to distribution over revenue.” But Payne countered, “It’s not socially responsible, it’s a matter of doing good business.”

SPORTS PROPERTIES: Payne said that F1’s recent deal with NBC was largely over marketing potential, and that F1 has been struggling with its presence in the U.S. Payne: “It really was a case of looking at your partners to who would commit the most marketing muscle on a five-year plan. The deal was driven by marketing and promotion.” On growth properties globally, Ravitch said, “We believe the UFC is the fastest growing global sport. It’s a very primal sport and it appeals to every country. It’s been a phenomenon in Brazil.” Payne agreed, but warned that some governments have pressured media companies about MMA programming. Payne: “You’re getting leaned on big-time by government not to touch it. ... Governments are sending strong signals what content they will accept or not.” UFC is probably the fastest growing sport, “but you have a lot of questions on it.” He added, “Rugby sevens is very much growing and it will really grow by being on the Olympic program.” Ravitch: “The NBA in China continues to go from strength to strength. You see this as you drive throughout the country. They are building more and more hoops all over the place. The NBA is firmly engrained in Chinese culture.”

AND THE NFL: Asked about the NFL’s prospects for growing overseas, Slipper said that he noticed traction gained by the league in London. Slipper: “You get the sense that the NFL is growing in London. ... I think the NFL could franchise in London and I think there is a growing demand for the NFL.” But Ravitch said, “The NFL has a separate challenge, as it’s not a sport that is played anywhere else. ... I tell everyone the NFL is the first, second and third most popular sport in the U.S. So why bother trying to build a sport where no one plays it? The biggest question is how come sports like the NHL and MLB haven’t been able to grow internationally like the NBA has. ... Those are sports that are played in those markets. ... That’s a decision these leagues and owners are going to have to make.” Ravitch added that it is all about a league’s business plan, saying, “The NBA made a conscious decision to invest internationally. It’s just a matter of someone choosing a direction and running after it.”

LOOKING AHEAD: One sport that we should all be watching over the next five years? Dolan: “It’s still soccer. Soccer is the international game, and so it becomes after that; then what else and where?” Ravitch: “Baseball has a golden opportunity that it hasn’t taken advantage of to go globally.” Payne: “There is nothing out there that is up and coming, from the mainstream, that is getting everyone’s attention. Beyond the traditional sports at the moment, there is nothing jumping out at you.” Slipper: “Cricket. It is a sport with great excitement and it’s going global. It is starting to get more distribution in Europe. There are cricket pitches built on the campuses of Microsoft, Oracle and other tech companies in Silicon Valley.”

See the conference's full agenda and read more in our dedicated SMT blog.

It will be at least three years until TV Everywhere is fully implemented, but its marketing and promotion will begin in earnest across all sports in the next six months, said a panel of broadcasters and distributors during a session at the ’12 Covington & Burling Sports Media & Technology conference titled, “Authentication: TV Everywhere Challenges & Opportunities.” TBS Senior VP/Business Development & Multiplatform Distribution Jeremy Legg said, “The number of programmers that either have not launched TV Everywhere or completed TV Everywhere deals is getting smaller. Everyone will be on the playing field relatively soon or sooner. Some people will be on the 10-yard line. Some people will be on the 50-yard line.” He added that reaching a point where everyone has those rights is critical to breaking through and making TV Everywhere pervasive. Comcast Senior VP/Digital & Emerging Platforms Matt Strauss said that the effort also will require heavy marketing so that consumers know what TV Everywhere is and what content they can access. Strauss: “We can’t assume people are going to understand this. It will require meaningful marketing. When customers understand the value, it will be consumed.” NBC Olympics President Gary Zenkel said that the process could move quicker if cable and satellite distributors develop systems to reduce the amount of information consumers must enter to authenticate their subscriptions. He added that Comcast developed technology that automatically made Olympic video available to its subscribers during the London Games. Zenkel: “You’re going to lose people every time you require them to put in some personal information. When the industry gets to a point where that information is not necessary or minimized, people are going to blow through the gates. We saw examples of that in London. We were incredibly encouraged by that.”

USER FRIENDLY: ESPN3 VP Damon Phillips said that another development that would accelerate the process would be requiring only one authentication that would cover every outlet, from ESPN to Turner to Fox to NBC. Phillips: “When I sign in at a Turner site, I should be able to come to ESPN and not have to sign in.” Strauss said that the cable industry did not help itself by calling the process “authentication.” Strauss: “It doesn’t exactly roll off the tongue.” But he added that the cable industry has “gotten smarter” with the process by doing automatic authentication -- by checking IP addresses -- so that people at home do not have to do anything but click “play.” Strauss said, “All of these things are evolving. You want to make it easy and seamless, but it has to be secure. It has to be secure from a rights standpoint.” Legg added, "Authentication is such an awful word.”

COLLEGE TIP-OFF: Legg said that Turner will not charge for its March Madness Live application in '13. Instead, it will allow consumers to download the app and begin viewing the NCAA men’s basketball championship games by authenticating their cable and satellite subscriptions. The decision marks a change from Turner’s approach in '12 when it charged $3.99 for an app that allowed people to view games on their mobile phones and tablets but let them view games for free by authenticating their cable or satellite subscriptions on their desktops and laptops. Legg said the change is being made because Turner discovered that authentication worked this past year. He added, “We think it’s time to move to that model for the 2013 March Madness.”

OF OLYMPIC PROPORTIONS: Comcast saw a huge increase in the number of people who consumed Olympic content on demand at During the Vancouver Games, it had 3 million viewers but that number soared to 58 million during the London Games. Strauss said that they also discovered consumption trends. During the day, on-demand consumption would rise steadily and peak around 8:00pm. Then it would drop. Strauss: “People would use on demand to catch up (and) watch great moments ... so it was interesting to see how those platforms were very complementary. That in some way helped drive incremental audience to tune in to primetime.” Zenkel said the Olympics underscored the appetite for second-screen viewing. Zenkel: “Despite any fears one might have had about exhaustion or cannibalization, in that 17-day window when people were emotionally invested in the Olympics, the more we made available, the more was consumed.”

IMPACT ON SUBSCRIBER NUMBERS: Cable and satellite operators just had a tough quarter in which there was erosion in their subscriber base. Strauss said that cord cutting is not an issue at Comcast, but that cord shaving, where customers downgrade some premium services, has been an issue. He pointed to new services like WatchESPN as features that are helping them to keep subscribers. Strauss: “As we continue to find ways and add more value and offer more choices, the market has shown people will pay.” Legg said that the big change is that household subscription numbers are not growing in the same way they used to. Legg: “If you believe in the pay-TV model, then you have to enhance the pay-TV model. We don’t do a very good job as an industry of marketing the value of the package. If you take your family out to a movie and buy popcorn and coke, you just spent $50.”

See the conference's full agenda and read more in our dedicated SMT blog.

The ’12 Covington & Burling Sports Media & Technology conference got under way yesterday in N.Y. with a panel featuring three of the industry's heavy hitters -- NBA Commissioner David Stern, ESPN President John Skipper and Turner Broadcasting President of Sales, Distribution & Sports David Levy. The panel, titled “From The Top: Insights On Sports Media,” saw Skipper comment on discussions between the network and league partners with regard to on-air talent: “When we’re doing games, we of course consult with our partners. We’re licensing their product to put on our air. I will state categorically that the decision not to hire Stan Van Gundy was my decision and only my decision. We looked at a number of people to put on our studio show. I wanted to bring in Bill Simmons, which we did. Simmons had a relationship with Jalen Rose. We brought Stan Van Gundy in to audition. He did very well. We did proceed with a discussion with him about potentially hiring him and then I decided not to. The only time I had a discussion with David [Stern] was when I told him, ‘This is what we’re going to do.’” Regarding TV Everywhere and cord cutting, Levy said, “The industry has done a poor job in saying what the value has been for the cable business. It’s good value for $80. And, by the way, TV Everywhere will make it even more valuable. Ultimately, you have to come up with opportunities to make sure that they don’t cut the cord. … 25% of the country now owns a tablet, 94% own a phone and 70% of those phones have video capabilities. If you allow these devices to have this content, and all you have to do is authenticate to get it, that’s giving huge value to all these technologies that people are buying.”

DECISIONS, DECISIONS: Skipper also discussed the decision to postpone the ING N.Y. Marathon, which was set to be aired on live TV (ESPN2) for the first time since ‘93. Skipper said, “We were not involved. Nobody asked our opinion. … I think ultimately they made the right decision, although I think the judgment about their decision-making process has been a little harsh. I think there is a point in time when a marathon would have been a spectacular rallying event for the city. That time is clearly not when you have limited resources and you’re having to decide where generators go and where police go. The main thing that matters is that they got to the right decision. But we were uninvolved.”

Skipper said canceling NY Marathon was right call


-- Skipper, on the shift of sports to cable TV: “The notion that the NBA gave up anything to come to ESPN and TNT is laughable. Look at the position of the league now. You’re not giving up audience by moving into what’s happening next. You actually lose audience by trying to hold onto what happened before.”

-- Stern, on new media companies like Apple, Google, etc.: “Ultimately, I think that they all are going to conclude that content is going to drive them because content is what has prevailed.” Levy, on new media companies becoming bidders for rights: “At some point, someone like a Google, a Microsoft or an Apple will step up and try to buy some rights. I don’t know if it will be the NBA or the NFL, but I believe it will be something they’ll try to get.” Skipper, on relationships with new media companies: “I don’t see Apple as a competitor. We’re growing our business by creating applications and content for tablets and iPhones. Last time I checked, ESPN had the No. 1, No. 2, No. 3 and No. 4 sports apps on Apple devices. We’re putting ads on those and making money. And we have the same conversations with Microsoft. We were on the Surface (launch). We had a built-in application. And we’ll do the same thing with Samsung and Android.”

    -- Stern, on cord cutting: “It has to be a concern, for those of us who study the industry, that people may not be watching cable or satellite. Even if it’s only 1% to worry about. But that’s why it’s good to have a partner with an over-the-air network. That’s why it’s good to have a social media presence, in some shape or form.” Levy, on cord cutting: “What we’re more concerned about are what we call the ‘nevers.’ Those that are never going to get on cable. And we do believe that’s going to start happening with the younger generations. I’m not worried about the cord cutting, I’m worried about the ‘nevers.’”

      See the conference's full agenda and read more in our dedicated SMT blog.