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Volume 21 No. 1

Media

Comcast has coveted Root Sports, the group of three RSNs located in some of the cable operator’s biggest markets, ever since DirecTV gained control of it in 2007.

Comcast executives long believed the satellite company wasn’t committed to the regional sports business and believed it would sell its RSNs in Denver, Pittsburgh and Seattle for the right price.

But Root Sports turned the tables on Comcast last week, officially taking over the cable operator’s Houston RSN and launching its fourth regional sports network with the rights to the Astros and Rockets.

AT&T Teleholdings and DirecTV Sports Networks bought the Houston RSN out of bankruptcy for just $1,000. The channel is expected to continue losing money for the next several years.

But the move to pick up the rights marks the clearest signal yet that the DirecTV-owned company not only is in the regional sports business for the long haul, but also is open to expanding into new markets.

“We’re always open to exploring other opportunities that may present themselves,” said Dan York, DirecTV’s chief content officer. “But we are not interested in pointlessly bidding up our own costs.”

One of the most persistent questions in sports media is how the DirecTV and AT&T merger will affect the company’s involvement in sports.

Leagues and teams are hopeful that the merged company will become an aggressive bidder for local sports rights to better compete with Fox Sports Net and NBC Sports Group, which runs the group of eight Comcast SportsNet-branded RSNs. Unlike Comcast, which operates RSNs only in markets where it is the dominant cable operator, DirecTV is a national satellite service that has subscribers in every U.S. market and conceivably could operate an RSN in any of them. Company executives would not identify any new markets it may target for a new RSN.

Typically, new companies that enter a market have to pay well over market value for local rights. Time Warner Cable, for example, signed a 25-year, $8.35 billion deal to pick up the Dodgers rights from Fox Sports Net.

While DirecTV is committed to stay in the regional sports network business, its executives are quick to say that it does not plan to get into bidding wars for local rights.

“We are happy with our RSN business and feel that we approach it in a very distributor- and consumer-friendly manner,” York said. “There’s a benefit to having a more direct relationship with the ultimate rights holder than middlemen.”

Last week’s launch of Root Sports Southwest officially ends a two-year debacle, where Comcast Houston was unable to cut deals with any big non-Comcast distributors. NBC Sports Group owned 23 percent of the channel, with the Rockets and Astros splitting the rest.

CSN Houston managed a distribution footprint of around 1 million homes, unable to sign carriage deals with DirecTV or AT&T. Root Sports Southwest immediately launched to more than 4 million homes.

“Distribution is hugely important. It’s the reason why the prior network was not successful,” said Patrick Crumb, president of DirecTV Sports Networks. “We are over that hump of the critical mass of distribution we need to go forward.”

NASCAR’s Chase for the Sprint Cup may have started slowly, but it ended with the sport’s biggest viewership figures in several years.

Kevin Harvick celebrated the first championship under the new format.
Photo by: GETTY IMAGES
The dramatic, elimination-style changes to the sport’s season-ending format were designed to generate more interest from fans and the marketplace, and while early results were lackluster, the finish surely pleased the sport’s top executives.

Five of the first seven races in NASCAR’s end-of-season tournament recorded viewership drops from last year on ABC and ESPN, causing some consternation that the sport’s decade-long ratings slide would continue through ESPN’s final season producing NASCAR events. But as the storylines and jockeying of drivers increased, viewership climbed significantly over the final three races as drivers were eliminated from the Chase as part of NASCAR’s rule changes instituted this year.

The final few races undoubtedly were helped by two post-race fights, first after the Oct. 11 Charlotte event and then three weeks later following the Nov. 2 Texas race, that involved some of the biggest names in the sport (Jeff Gordon, Brad Keselowski, Kevin Harvick and Matt Kenseth). The brawls pushed NASCAR’s Chase off the sports pages and in front of more casual fans as it was covered on everything from network morning news shows to late-night talk shows.

The final three races, including that Texas race, showed increased viewership from last year, and NASCAR’s network partners believe the buzz will carry over into next year.

“The changes took a greater hold in year one than I anticipated,” said NBC Sports Group Chairman Mark Lazarus. “There’s much reason for optimism that it will continue to make the Chase a more exciting end-of-year program.”

Lazarus was so energized by the attention surrounding this year’s Chase that he called NASCAR Chairman and CEO Brian France shortly after the final race in Homestead to tell him, “We’re now officially on the clock and we can’t wait.” NBC starts a 10-year deal with the sport in July, taking over for ESPN.

Overall this year, viewership on ABC and ESPN for nine of the 10 races in the Chase was essentially flat with last year. (Last year’s Chicago race had a six-hour weather delay and was carried on two networks, ESPN and ESPN2, making it tough to compare to this year’s event.)

This year’s Chase races averaged 4.477 million viewers per race, compared with last year’s 4.458 million — or up 0.4 percent. But it’s the final three races (Texas, Phoenix and Homestead) that are fueling such excitement around the sport. They averaged 5.007 million viewers, up 11 percent from last year’s average of 4.513 million viewers for the same three races.

Network executives are energized by that performance, especially since the fall is such a crowded sports environment with NASCAR races competing directly with college and pro football.

“The new Chase format brought a sense of urgency and excitement at the end of the season that we haven’t seen before,” said Fox Sports President Eric Shanks. “As that becomes the consistent format, we expect to see that urgency and excitement begin immediately with the first race at Daytona next year.”

Optimism surrounding NASCAR extends beyond the sport’s TV partners. Sponsors also are embracing changes made to the Chase format, which added a postseason element to NASCAR. Judged in those terms, this was its most successful year yet, said David Grant, a principal at Team Epic, the longtime sports agency for FedEx, primary sponsor for Joe Gibbs Racing’s No. 11 Camry, driven by Denny Hamlin. FedEx also titles a Sprint Cup race.

“People were talking a lot about NASCAR smack in the middle of the NFL season and that’s a big accomplishment,” Grant said. “The drivers and crews were all competing with a passion that hadn’t been seen before because you had a win today or go home scenario.”

Fox will have the first opportunity to see if the current buzz carries over to next year. Fox opens the NASCAR season with the Daytona 500, and in a new schedule format will be in Atlanta for the second race.

“We’ve never had that before; it’s going to bring a lot of excitement,” said Bill Wanger, Fox Sports executive vice president of programming, research and content strategy. “The first two races are going to be in the same time zone, so you won’t have an odd start time with the second West Coast race, which we’ve had over the last few years.”

Kevin Harvick lifted the Cup after the new-look Chase came to an end at Homestead-Miami.
Photo by: GETTY IMAGES
Both Fox and NBC executives also believe NASCAR’s new schedule around the Xfinity Series will help. In past years, ESPN produced all races around NASCAR’s secondary series. Next year, Fox and NBC will produce races for Fox Sports 1 and NBC Sports Network, conforming with its Sprint Cup coverage schedule.

“We can keep it all in the same family and avoid viewer confusion,” said John Entz, Fox Sports executive producer. “The consistency of the schedule will be a huge reason why it will help the momentum continue through next year.”

Fox will hand off coverage to NBC with a July 5 race in Daytona that will be on the broadcast network. As it has with other properties, NBC Sports Group plans to use its NBCUniversal parent to help promote the sport to casual viewers and use shoulder programming on NBC Sports Network to develop characters and further storylines.

“We will do what NBC does best, which is to make big events bigger,” Lazarus said. “We will market and promote it. We will use all the resources of NBCUniversal to frame the Chase and the new format that started this year and play off the success of the sport.”

Lazarus embraced the changes NASCAR made to the Chase, saying that the increased viewership of the last races show that more casual fans started to sample it.

“It led to more consequence, and it led to more widespread coverage for the sport,” he said. “That’s really good for the sport. We’re happy that they started it this year because next year, the anticipation of it for the second half of the season will be even greater.”