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Volume 21 No. 1

Media

NASCAR is bringing digital ad sales back in-house from Turner Sports after this year and will create a new ad sales group headed by former SI Media Group executive Jon Tuck, the next step in the sanctioning body’s quest to create a more integrated digital model.

Turner has handled NASCAR’s digital ad sales since 2000, when it also began a 13-year run controlling the organization’s digital rights.

The move was long expected, and business ties between the two have been receding since NASCAR paid an eight-figure sum to bring digital rights back in-house starting in 2013, a year early. The change also comes after Turner didn’t bid for NASCAR’s most recent media-rights package in 2013 after 29 years broadcasting the sport, meaning all business ties between the two sides will end in 2017.

NASCAR will work with buyers to customize digital ads.
“It was a major strategic initiative to bring the digital assets in-house … but the transition work [to keep ad sales with Turner through 2016] at the time was very important by helping us maintain the ad sales as we were learning to operate the site,” said Brent Dewar, chief operating officer of NASCAR. “It is a natural next step … because we know the product the best and interact with it every day.”

With Turner serving as a middleman between NASCAR and digital media buyers, some industry executives had said privately that the sport would be better served working directly with media buyers and brands on digital ad sales.

Dewar said having NASCAR’s digital content team work directly with the ad sales group will be beneficial and allow the sanctioning body to customize needs for advertisers.

“More importantly is … hearing from the client directly, ‘This is what they’re trying to achieve with this communication, program or release,’” Dewar said. “Having that closer piece between the ad sales team and the developers of the site, it’s just easier.”

NASCAR would not confirm how many positions will be added to the new sales group, which will sell only digital media and will be announced this week. Tuck, who started July 7 as chief revenue officer of NASCAR Digital Media, reports to Colin Smith, NASCAR’s vice president of digital media. Dewar noted that Tuck was also a top sales executive for SI from 2012 to 2016, during which time SI brought its digital rights back in-house from Turner.

In 2013, the PGA Tour also took its digital rights back in-house from Turner, which nonetheless maintains a healthy portfolio managing Bleacher Report, PGA.com, NCAA.com and ELeague, and co-managing all of the NBA’s digital properties.

“Turner has enjoyed a successful, long-standing partnership with NASCAR dating back to 1983 — airing NASCAR on TBS and TNT — and in more recent years collaborating to build and grow the NASCAR digital business,” Matt Hong, Turner’s executive vice president and general manager, said in a statement. “… We wish NASCAR continued success in all future endeavors.”

The sanctioning body averaged 1.3 million unique visitors per day across its home page and apps through the first half of the 2016 season, down 7 percent from 1.4 million at the comparable point last year, according to data reviewed by SportsBusiness Journal. NASCAR also saw an average of 8 million page views per day, the data showed, down 25 percent from 10.6 million at the comparable point last year.

NASCAR, however, notes bright spots include that it is on track to surpass 1 billion page views for the third straight year, that content consumption (page views plus video views per visit) is up 5 percent year over year, and that numbers are up substantially on social media. Current advertisers on NASCAR.com include Sprint, Xfinity, Mobil 1, MillerCoors, Coca-Cola, FedEx and Crown Royal.

“The fact that we have such good partners, I think that’ll make the transition easier,” Tuck said.

The move will be closely watched by the sport’s teams, who earned clearer definitions of their rights in regard to digital revenue as a result of the sport’s new ownership charter system and are eyeing new digital integrations with NASCAR that could lead to the type of model seen in many stick-and-ball leagues. Under the charter system, teams earn 60 percent of the revenue derived from digital media rights, while tracks receive 30 percent and NASCAR takes the remaining 10 percent.

After eight years of fits and starts, the NBA finally will offer local streaming leaguewide to authenticated customers.

For the first time, every NBA team will offer live local streams of its games this season, as deals are close for all regional sports networks that carry NBA games.

“We expect all teams to be streaming this year,” said David Denenberg, senior vice president of global media distribution and business affairs for the NBA.

Last season, Root Sports RSNs in Utah and Houston along with Altitude’s RSN in Denver were the lone holdouts, but the NBA says all teams are expected to be on board starting in October, along with Fox Sports, NBC Sports Group, MSG Network, and TWC SportsNet.

While NBA and RSN executives refused to disclose terms, sources said each of the deals is for five years and should be finalized in the next few weeks. Financial terms vary but sources say RSNs have agreed to pay roughly $1 million per team per year for the right to stream games locally.

Deals were made in conjunction with a renewal of the RSNs’ outer rights pacts with the NBA that allows RSNs to carry games outside of a team’s home market.

For RSNs, the main value of these deals comes from the outer market rights, which help them expand distribution of their channels and allows, for example, FS Ohio to carry Cleveland Cavaliers games in Cincinnati.

Fox and the NBA were the first to launch in-market streaming services during the 2013-14 season. Executives with both sides said that streaming viewership has been popular enough that the two sides never wavered in cutting a deal.

“We are pleased with the growth,” Denenberg said. “We have not been disappointed. We worked with the RSNs on authentication to try to make it simpler. We want our fans to stream more content.”

Neither side would comment on take-up rates for the live streams. But a source said that an online benchmark typically shows that a little more than 1 percent of a linear television audience is considered a sizable streaming audience.

For example, if an RSN averages 300,000 viewers per game, that would mean roughly 3,000 to 3,500 uniques are live-streaming it locally — a number that is in line with industry averages but shows a lot of room for growth.

Not surprisingly, the best results have come from the markets with the biggest television ratings. CSN streams of Golden State Warriors games have been particularly high, sources said, due to the combination of a popular team playing in a tech-savvy market.

Streams of Cavs games drew Fox’s biggest online audiences last season.

The Warriors and Cavs had the league’s highest RSN TV ratings last season, too.

NBA owners addressed the renewal at the board of governors meeting in Las Vegas held on July 12.

Because of the many games combined with local TV deals, the NBA, NHL and MLB have been the most active leagues in local streaming. Fox Sports has local streaming deals with the NBA, NHL and MLB.

NBC Sports Group, the other big RSN operator, has a local streaming deal only with the NBA, though its executives are in negotiations with the NHL and MLB.

Univision Deportes’ bet on the Copa America Centenario this summer paid off, propelling it to strong ratings results compared with English-language sports networks in prime time in June. But can the network sustain that surge long term, especially when rival networks hold the rights to the next wave of tentpole national team soccer tournaments?
Increased hours and investment in Liga MX, including an over-the-top English-language coverage option, is where it’s starting its pursuit.

RODRIGUEZ
“The highest-rated Mexican teams are the highest-rated soccer teams in the world as it relates to the U.S. market, which no one ever believes when they hear it for the first time,” said Univision Deportes President Juan Carlos Rodriguez.

Liga MX’s 2016-17 season began earlier this month. Last season, the Mexican league’s matches averaged more than 629,000 viewers in the adults 18-49 demographic on Univision Deportes, up 13 percent compared with the previous year.

New this year is Univision featuring more than six hours of live matches every Saturday night in prime time, including two matches on Univision proper. Previously, many of the Saturday night matches kicked off within the same window.

Copa America Centenario drew strong ratings for Univision Deportes this summer.
Photo by: GETTY IMAGES
The network also worked with Liga MX to relaunch the Fin de Semana de Campeones, or Weekend of Champions, a doubleheader of soccer matches featuring recent championship-winning clubs. The network helped to create an awards show that it aired the night before the matches, as well.

Univision’s commitment to Liga MX is important to the network in part because of what it won’t have in the years to come. The network in 2011 lost out in the bidding for the Spanish-language rights to both the 2018 and 2022 World Cups to NBC’s Telemundo, which put forth a nearly $600 million bid — nearly double what Univision had paid to air the 2010 and 2014 competitions. FIFA then extended those rights to the 2026 World Cup in a no-bid sale last year. So the 2014 World Cup marked the end of a 36-year run for Univision with the event.

Additionally, beIN Sports holds both English- and Spanish-language rights to the next Copa America tournament, in 2019.

This year, for the special Centenario edition of the tournament, Univision Deportes averaged 2.9 million viewers across the 32 matches, besting its 2014 World Cup viewership. Its coverage also brought Univision Deportes a 0.9 average prime-time rating for June, higher than the marks for ESPN (0.8), Fox Sports 1 (0.6) and NBC Sports Network (0.3), though by viewership, ESPN (995,000) and FS1 (753,000) still ranked higher. Univision Deportes averaged 701,000 viewers.

Rodriguez admits that more can be done to expose Liga MX to an English-speaking audience. Some of that needs to be done by the league and its clubs through marketing and investment directly in the United States, but he said the network has a role to play too. Liga MX rights are decentralized; each club can sign deals for its individual home matches. Univision holds the rights for 13 of the 18 teams in the league.

Univision’s distribution team also is working on a plan to offer an over-the-top option for English-language coverage of the league’s matches, Rodriguez said. Last year, the network began offering an English-language commentary alternative via SAP for its MLS games.

The network is also in the beginning stages of preparing its bid for the next cycle of UEFA Champions League Spanish-language rights, currently held by Fox Sports. Those rights are expected to go to market later this year. Other Univision-held contracts include: MLS; U.S. Soccer; Mexican national team matches played in Canada, Mexico and the United States; and CONCACAF’s slate of events and tournaments.

“We would love to have the rights for the World Cup and these other great tournaments, but if we’re going to compete in a landscape in which we’re going to be the kings of the soccer world for 1,430 days every four years, and then have to stop for 30, then I’m not concerned,” Rodriguez said.

The hallmark of NBC’s Olympic coverage always has been to protect its prime-time programming block — the hours between 8 and 11 p.m. ET that draw the most viewers and the biggest ad commitments. In previous years, the network would hold back talking about the results for some events on-air in an effort to pique viewer interest in prime time.

NBC’s tape-delay strategy worked well for the better part of two decades, as the network’s prime-time slot during the Olympics consistently drew the biggest ratings on television.

But four years ago in London, NBC found that the presence of its online streams did not cut into the TV network’s prime-time ratings. That caused the network’s relatively new owner, Comcast, to chase a different strategy for next month’s Games: It won’t hold anything back. Comcast’s top executives believe that its plan to stream 6,000 hours of Olympic competition — including streams that will compete with the prime-time show — ultimately will be a marketing campaign to draw more viewers to prime time.

NBCUniversal’s Steve Burke (left) and Comcast’s Brian Roberts foresee big ratings gains.
Photo by: VIRGINIA SHERWOOD / NBC SPORTS GROUP
“The big learning is that you can actually increase prime time by increasing 24-hour-a-day access to Olympic programming,” said NBCUniversal CEO Steve Burke. “The feeling was at some point, the more you do outside of prime or the more you do during prime on other vehicles, the more you’re going to reduce. The reality is that in a fragmented world all that streaming is really a form of promotion. There are so many viewing opportunities for people, you need to get wherever they are all day long. That will only increase prime.”

Burke recalled a moment at the 2012 Olympics in London — NBC’s first with Comcast as an owner — when NBC tried to ignore a Michael Phelps race that occurred outside of prime time.

“Everybody knew that Michael Phelps had won, but you would turn on NBC and nobody would mention it,” Burke said. “You can’t hide from people. We’ve learned that you’re better off exposing everything.”

Next month’s Games in Rio will be the first “live” Olympics since Comcast bought NBC in 2011, meaning that the Games are taking place in roughly the same time zone as the U.S. As such, many of the top events will be produced live in prime time, which should help NBC’s ratings. But NBC also is confident that the network’s prime-time television ratings will be stronger because of all of the streaming that’s planned.

“Our theory is that if you widen the top of the funnel, more comes through the funnel, and the prime-time audience will be the largest audience in television history,” said Brian Roberts, Comcast chairman and CEO. “We’ll see. The advertisers believe that — we’re up 30-40 percent in advertising since London.”

Burke believes NBC’s streaming plans also are effective in bringing younger viewers to the Games. He referenced the London Olympics, which he said registered the biggest prime-time ratings increases in the younger demographics. Through deals with Snapchat and BuzzFeed, in addition to its streaming plans, Burke believes Rio is set for even bigger gains.

“Our theory is that if you widen the top of the funnel, more comes through the funnel, and the prime-time audience will be the largest audience in television history.”

BRIAN ROBERTS,
COMCAST CHAIRMAN AND CEO

“We directly attribute that to streaming,” he said. “The most important thing we can do is to make sure that the Olympics continue to appeal to young people. … The way you do that is to stream everything, make sure you have a presence on Snapchat and Facebook and YouTube and everywhere else. Then you have a tone and a way of presenting the Olympics — whether it’s the interstitial or the marketing or the up close and personals or the music, which is going to play a bigger role in this Olympics.”

Overall, the number of people watching individual streams has been relatively small — most came in well below 1 million users in London. “Numbers will be well below a level where you would worry about the effectiveness of the streaming,” Burke said.

As the country’s biggest cable operator, Comcast sees ancillary benefits from streaming the Games. Roberts said many new developments on Comcast’s X1 platform come as a result of its Olympic ties. “It’s pushing our team to the max,” Roberts said. “I’m hearing the right amount of stress and angst.”

Roberts also expects the Olympics to help bring viewers to other parts of NBC’s schedule, like “The Tonight Show” and “Today” show.

“What can you do with that platform for a company that has film and theme parks and cable,” Roberts said.

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.

Several distribution executives responded with pessimism to last week’s news that ESPN plans to launch an ACC Network in three years, suggesting that ESPN is going to have a hard time convincing cable and satellite operators to take the planned channel. Speaking on background because they have yet to even start negotiations, the executives said the launch of a new sports service flies in the face of the industry’s trend of providing lower-cost tiers of programming.

Sources say ESPN plans to counter that argument by focusing on the popularity of ACC sports, which is home to some of the best teams in college football (like Clemson and Florida State) and basketball (like North Carolina and Duke).

ACC Network’s first test comes next summer when ESPN starts negotiating a new affiliate deal with Altice, a negotiation that promises to be a tough sell since the cable operator has systems near New York City, which is a long way from ACC member Syracuse and not really part of the conference’s footprint. One of the few cable operators that does not carry SEC Network, Altice has been public about its desire to cut costs.

ESPN could cut individual ACC Network deals, but most programmers and distributors like to wait until their big affiliate deals expire — and ESPN’s biggest ones aren’t up until several years after ACC Network’s planned 2019 launch. ESPN’s affiliate deals with Comcast and Charter expire in 2021; ESPN’s Dish Network deal runs until 2022.

Sources expect ESPN to price the ACC Network similar to SEC Network, which at launch was around $1.30 per subscriber per month in-market and around 25 cents per subscriber per month out-of-market.

But the sports media market has changed dramatically since SEC Network launched in August 2014. ESPN has lost more than 6 million subscribers since that time, according to Nielsen estimates. Plus, cable operators have become more emboldened in carriage fights with sports networks, such as Comcast, which allowed YES Network to go dark on its Connecticut systems, and DirecTV, which has yet to cut a deal for either Pac-12 Networks or SportsNet LA.

— John Ourand

Longtime industry executive Joe Ferreira is joining CSN Mid-Atlantic after a stint as Learfield’s first chief content officer.

The Washington, D.C.-area regional sports network hired Ferreira as its vice president of content strategy — a new role that oversees CSN Mid-Atlantic’s studio programming, original content and digital media.

Ferreira will relocate from Texas to the D.C. area and report to network President Rebecca Schulte. He begins his new job Aug. 1.

Ferreira is completing a four-year stint at college marketing and media powerhouse Learfield, which is rumored to be up for sale by its majority owner Providence Equity Partners. Prior to Learfield, Ferreira had jobs with CBS Interactive and the NFL.

— John Ourand