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Volume 21 No. 2


Rights to the Nationwide Series could be in play this summer when NASCAR opens its negotiations with ESPN, according to several sources.

ESPN and NASCAR have not begun formal talks about renewing a media rights package that includes the Nationwide Series’ entire 33-race season and 17 Sprint Cup races. But ESPN has had internal conversations about bidding only on the Nationwide races that overlap with its Sprint Cup schedule instead of the entire season.

The reason has more to do with production expenses than ratings points. From August to November, when it airs both Nationwide and Sprint Cup races, ESPN is able to use the same production crew, production trucks and other resources to cover both Nationwide Series races and Sprint Cup races on the same weekend.

It’s much costlier for ESPN to produce the Nationwide Series’ first 16 races during the first half of the NASCAR season, when Fox and Turner hold the rights to the Sprint Cup races held at the same tracks on those weekends.

ESPN has had rights to the Nationwide Series since 2007 and put considerable promotional and programming resources behind it. The secondary circuit aired on Fox and NBC from 2001 to 2006.

ESPN declined to comment. Formal renewal talks are scheduled to begin later this summer, and its executives have not spoken to NASCAR about the Nationwide Series.

Any move by ESPN to bid only on the second half of the Nationwide Series would allow NASCAR to experiment with new ways of selling its secondary series and offer it great flexibility.

The sanctioning body could decide to split the Nationwide package between its Sprint Cup rights holders. That would allow Fox to buy the first half of the season and ESPN, or another broadcaster, to take the second half. Such a move would give both broadcasters the type of cost efficiencies ESPN wants, both in production and advertising sales.

Fox has expressed interest in obtaining the rights to the first part of the Nationwide Series but has not had any formal talks with the sanctioning body. Fox is looking to obtain highly rated content, like the Nationwide Series, for its new Fox Sports 1 channel that is launching in August. The Nationwide Series has delivered consistent ratings over the last several years — it averaged 1.99 million viewers a race last year and is averaging 2.1 million viewers through the first six races this year. It is usually one of the highest-rated pieces of sports programming when it airs in its traditional time slot on Saturday afternoons, and it draws five times as many viewers on cable as the IndyCar Series, which is averaging 343,000 viewers through three races this year on NBC Sports Network.

NASCAR also could decide to test the market and create a separate package for the entire Nationwide Series that it would sell independently of the Sprint Cup Series. This move would allow NASCAR to bring on a third or even fourth broadcaster, depending on how it decides to divide the races.

The series has never sold rights to the Nationwide Series independently, so the value of the series’ annual rights fee has never been reported. But with a 10-month season and a consistent, weekend schedule, it offers attractive programming for various outlets.

NASCAR’s media rights are the most significant sports rights up for bid this year. They are entering a sports media market that is as competitive as it has ever been.

In addition to FS1 and ESPN, NBC has been looking to bring live sports to its 24-hour sports channel, NBC Sports Network. Turner has been adding sports to TBS, TNT and truTV. And CBS has its own 24-hour sports channel, CBS Sports Network, though the network has been reluctant to engage in bidding wars for sports rights.

NBC has made no secret of its desire to pick up NASCAR rights.

Last year, NASCAR secured an eight-year extension with Fox for the first 13 Sprint Cup races of the season. Sources value the deal at more than $2.4 billion over eight years, a sizable increase from Fox’s current eight-year, $1.76 billion agreement.

ESPN has said that it wants to renew its NASCAR deals. The second half of the Sprint Cup provides high-quality Sunday afternoon programming opposite NFL games. Nationwide Series races are held on Saturdays and bring a consistently big audience to ESPN.

ESPN also could look at the NASCAR deals as an opportunity to keep programming away from some of its upstart competitors. The channel has signed many of its sports rights deals into the next decade. NASCAR, the Big Ten and the NBA are the only big-ticket items that will be on the market in the next several years.

As servers cleared the plates at the end of a working lunch at a famed Manhattan hotel, Stephen Espinoza passed an iPad across the table, careful not to snag an earbud wire on a chair.

“This just came in,” the head of Showtime Sports told Richard Schaefer, CEO of Golden Boy Promotions. “They still have to do the final mix of the sound, but you can see how it looks.”

Schaefer leaned forward, watching as the video rolled.

“This May 4, there is one target — the pay-per-view king,” a narrator said in an FM radio baritone, pausing as the face of Floyd Mayweather Jr. appeared. Graphics turned the screen into the head-up display of a fighter jet, which zoomed over the Las Vegas strip, zeroing in on the glowing outline of the MGM Grand.

As the 30-second spot concluded, the narrator’s voice returned with a call to action, reminding viewers that Mayweather’s Saturday night pay-per-view fight against Robert Guerrero can be seen in select movie theaters. Espinoza explained that the same trailer, produced by Showtime, would be recast at the end to hawk tickets for the MGM Grand, and that additional versions would be customized to promote in-home sales through cable operators and satellite providers.

“This is the kind of thing I was talking about when I said it was time to reconsider everything about the [pay-per-view] model,” Schaefer said. “You see the sponsors and the movie theaters and the network and everybody working together. That’s what I wanted to do. Shake the boat. Rethink everything.”

This week’s fight will be a landmark one, not because of the matchup in the ring, but because of a deal struck outside it. After generating $543 million in sales from nine pay-per-view fights on HBO and fighting exclusively on that network for 14 years, Mayweather announced in February that he signed a six-fight, or 30-month (whichever comes first), deal with rival premium network Showtime.

Key in the deal, which could make Mayweather the highest-paid athlete on the planet over the next three years if his pay-per-views continue to sell, was Showtime’s commitment to promote the fight across the broader platforms of its parent company, CBS.

Last month, Mayweather appeared on CBS between games of the Final Four, watched by about 15 million viewers. On Saturday night, CBS aired an hourlong documentary on Mayweather and Guerrero, executive produced by Emmy-winning former HBO Sports President Ross Greenburg. CBS also has promoted the fight via its radio network, as well as its interactive and outdoor divisions, and discussed merchandise opportunities for Mayweather through its consumer products division.

“It’s a pleasure to be able to work with somebody who gets it,” said Mayweather Promotions CEO Leonard Ellerbe, explaining that while the HBO relationship was a good and profitable one, the network did not market the fights as broadly as Showtime and CBS. “We’re on the same page [with Showtime and CBS]. We’re not having to pull, scratch and claw for stuff we want to get done, because [Espinoza] is thinking like we’re thinking.”

Much of the promotion that supports a pay-per-view fight is funded via co-op arrangements in which cable operators and satellite providers that distribute the fight share in the advertising costs.

“Every one of them is getting a customized marketing integration plan,” said Golden Boy Chief Marketing Officer Bruce Binkow. “They’re contributing co-op dollars in unprecedented numbers because they’re all getting something that’s different and unique and tailored to them.”

Sponsorship activation also has been high for the fight, Binkow said, with Corona displaying point-of-sale materials in more than 20,000 stores; O’Reilly Auto Parts promoting the fight in its more than 3,000 stores; and NCM Fathom airing commercials in theaters for six weeks leading up to the fight, including a 30-second spot during its “First Look” segment and a 20-second spot after the lights go down for the trailers.

Are this year’s Pittsburgh Penguins about to join the ranks of the most-watched American sports teams?

Heading into their final regular-season games last week, the Penguins were on pace to post the highest average RSN rating for any U.S.-based MLB, NBA or NHL team since 2002. Penguins games on Root Sports were averaging a 12.56 Nielsen rating in the Pittsburgh market, a mark that would be the highest RSN rating for any U.S.-based NHL team on record.

Pittsburgh has drawn big ratings despite injuries to Sidney Crosby and other stars.
Photo by: GETTY IMAGES; Chart Source: SportsBusiness Journal analysis of Nielsen data
Since 1997, only the 2002 Seattle Mariners, who pulled a 13.2 average on FSN Northwest that year, would have a higher rating among U.S.-based MLB, NBA or NHL teams than what the Penguins were averaging as of last week, according to SportsBusiness Journal research.

Pittsburgh Penguins
(as of April 21)
Before this year, the highest RSN rating in the last five years came in San Antonio for the 2010-11 season, when Spurs games on FS Southwest averaged a 10.19 rating. Before that, the Boston Red Sox averaged a 12.20 average on NESN for the 2007 season, the year in which they won their second World Series title of the decade.

For comparison’s sake, during Michael Jordan’s final season with the Chicago Bulls in 1997-98, the Bulls finished the year with an 8.9 average local rating on FSN Chicago.

How big is the Penguins’ 12.56 rating? The team has nearly doubled its TV audience since the 2008-09 season, moving from an average of 74,000 homes to an average of 146,000 homes.

During the last five weeks of the season, the rest of the league’s U.S.-based teams posted local ratings that were flat or declined. The Penguins, however, saw a 6 percent increase.

“The story has been wonderful since we trudged through the lockout and dropped the puck on the season,” said Shawn McClintock, senior vice president and general manager of Root Sports. “Sports fans in the city of Pittsburgh are incredibly passionate, loyal and knowledgeable.”

The Penguins’ TV ratings were helped by the team having compelling story lines throughout the NHL’s lockout-shortened season. Despite stars Sidney Crosby, Evgeni Malkin, James Neal and Kris Letang all missing substantial time with injuries, the Penguins finished second overall in the league, behind only the record-setting Chicago Blackhawks, and first in the Eastern Conference. Before he suffered a broken jaw on March 30, Crosby was the NHL’s leading scorer with 56 points (15 goals, 41 assists) in 36 games.

While traditionally strong, the Penguins’ TV numbers reached historic levels this season. Sixteen of the 20 highest-rated Penguins games of all time occurred this season, McClintock said. The other four were historically memorable games: Mario Lemieux’s return in 2000; the closing of Mellon Arena in 2010; and Crosby’s two returns from injury last year.

It wasn’t just Pittsburgh that saw a burst of viewership interest in the NHL this year. Thanks largely to this season’s lockout-shortened schedule, local TV ratings throughout the league saw significant increases. Ratings for 17 of the 21 teams obtained by SportsBusiness Journal registered increases, with 16 of them showing double- or triple-digit jumps.

Data for Carolina and Nashville and for the league’s seven Canadian teams was not available.

The NHL increase mirrors the NBA’s experience during that league’s shortened 2011-12 season, when the NBA’s similarly compressed schedule led to higher TV ratings across the board. Because of the lockout, the NHL started this season in January instead of October, and teams played 48-game schedules rather than 82.

Another good story for the league occurred in Chicago, where Blackhawks games on Comcast SportsNet Chicago averaged a league-high 192,000 homes. The team has posted a viewership increase five straight seasons, growing consistently from an average audience of 21,600 homes per game in 2007-08, when Rocky Wirtz took over the team and immediately worked a deal to show the team’s home games on local TV.

Wirtz’s father, Bill, as owner of the team, had long objected to having such local TV coverage of Blackhawks home games because he believed it would negatively affect ticket sales.

The Colorado Avalanche is at the other end of the spectrum. With the Western Conference’s worst record on the ice, the Avs saw their games on Altitude average only 13,000 homes. In the 2009-10 season, Avs games were at nearly double that number (24,000).

This season, only the Columbus Blue Jackets (10,000 homes) and Florida Panthers (4,000 homes) had lower local audience averages.

Staff writer Christopher Botta contributed to this report.

NHL teams’ RSN results: 2012-13 season

Top 5
Team RSN Avg. rating (Change*)
Pittsburgh Root Sports 12.56 (+56.4%)
Buffalo MSG 9.46 (+44.4%)
Boston NESN 6.60 (+41.0%)
Chicago CSN Chicago 5.50 (+76.8%)
Minnesota FS North 4.27 (+95.0%)
Bottom 5
Los Angeles FS West 0.59 (+55.3%)
New Jersey MSG Plus 0.50 (+51.5%)
New York Islanders MSG Plus 0.49 (+133.3%)
Anaheim Prime Ticket 0.40 (+37.9%)
Florida FS Florida 0.22 (0.0%)
Top 5
Team RSN Avg. no. of HHs (Change)
Chicago CSN Chicago 192,000 (+76.1%)
Boston NESN 156,000 (+40.5%)
Pittsburgh Root Sports 146,000 (+55.3%)
New York Rangers MSG 126,000 (+72.6%)
Philadelphia CSN 90,000 (-9.1%)
Bottom 5
Dallas FS Southwest 18,000 (+12.5%)
Phoenix FS Arizona 16,000 (+128.6%)
Colorado Altitude 13,000 (-23.5%)
Columbus FS Ohio 10,000 (+11.1%)
Florida FS Florida 4,000 (+33.3%)
Top 5
Team RSN Change (Avg. rating)
New York Islanders MSG Plus +133.3% (0.49)
Phoenix FS Arizona +117.5% (0.87)
Minnesota FS North +95.0% (4.27)
Chicago CSN Chicago +76.8% (5.50)
New York Rangers MSG +71.7% (1.70)
Bottom 5
Washington CSN Mid-Atlantic +2.0% (1.53)
Florida FS Florida 0.0% (0.22)
San Jose CSN California -5.8% (1.30)
Philadelphia CSN -7.8% (3.06)
Colorado Altitude -24.1% (0.85)
Top 5
Team RSN Change (Avg. no of HHs)
Chicago CSN Chicago +83,000 (192,000)
New York Rangers MSG +53,000 (126,000)
Pittsburgh Root Sports +52,000 (146,000)
Boston NESN +45,000 (156,000)
Minnesota FS North +36,000 (74,000)
Bottom 6
Columbus FS Ohio +1,000 (10,000)
Washington CSN Mid-Atlantic +1,000 (36,000)
Florida FS Florida +1,000 (4,000)
San Jose CSN California -2,000 (33,000)
Colorado Altitude -4,000 (13,000)
Philadelphia CSN -9,000 (90,000)

Notes: Comparable data for Carolina, Nashville and for the league’s seven Canadian teams was not available. Information is for games played through April 21, 2013, compared to full-season 2011-12 numbers. NHL teams this year played 48-game schedules that started in January, after the lockout. The 2011-12 season featured the league’s traditional 82-game schedule, starting in October.

Source: Nielsen