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Volume 21 No. 1

Media

In a move that has shocked U.S. media companies, Turner Sports picked up the U.S. English-language media rights to the UEFA Champions League starting in fall 2018, according to multiple sources.

Turner, which has not carried soccer programming of any kind for at least 27 years, was a surprise bidder and aggressively committed more than $60 million per year as part of a three-year deal that runs through the spring of 2021, largely taking over a package that Fox Sports has held for nine years.

Turner will be joined by Univision, which agreed to pay around $35 million per year for the Spanish-language rights, giving UEFA a haul of close to $100 million per year for the U.S. rights to the annual soccer tournament. That’s a massive increase for UEFA, which currently brings in around $50 million per year for both English- and Spanish-language rights from Fox.

The biggest surprise, though, came from Turner, which last had soccer on its schedule with the World Cup in 1990. Turner outbid two networks — Fox and NBC — that have made huge investments in the sport over the past decade.

Another big surprise came from the fact that ESPN did not submit a formal bid. Instead, BAMTech, the technology company spun off from MLB Advanced Media, submitted a bid believed to be in the $35 million per year range that would have placed the tournament’s biggest games on ESPN’s TV channels and made most of them available on an over-the-top service. Last summer, ESPN parent company Disney paid $1 billion for a 33 percent stake in BAMTech.

UEFA told bidders that it would not accept joint bids, which is the main reason why BAMTech submitted a bid on its own without ESPN. ESPN has long been a big soccer supporter and currently holds rights to the European Championships and MLS.

This marks BAMTech’s first official foray in the sports rights market and suggests that digital companies will become much more active in trying to acquire rights.

Fox Sports, the incumbent English- and Spanish-language rights holder with the UEFA Champions League, signed its deal with great hype in 2009. That deal expires at the end of the 2017-18 season. Fox’s bid to retain the package was far less than Turner’s, sources said. Fox carries a lot of high-profile soccer programming, including the World Cup and MLS.

NBC Sports Group also submitted what has been described as a “token bid,” sources said. NBC has made soccer a focal point of its weekend morning programming and has received plaudits for its English Premier League coverage on NBCSN. BAMTech’s bid was similar to Fox’s, and more competitive than NBC’s, but not competitive enough to send the bidding process into a second round.

It’s not clear where Turner will carry the Champions League games on television. It is certain to place the games on one of its cable channels: TBS, TNT or truTV — three channels that have distribution footprints of more than 87 million homes.

Turner’s move to pick up the rights could benefit AT&T, which is in the process of acquiring Turner’s parent, Time Warner. AT&T owns a wireless business and satellite operator (DirecTV) — businesses that would love to have control over packages of sports content.

Turner’s interest in the deal also could be rooted in its digital aspirations, especially since most Champions League games are midweek contests played in Europe’s prime time — which is afternoon in the United States when most people are at work.

Earlier this year, Turner and NBC Sports Group combined their streaming services (Playmaker Media and iStreamPlanet) to better compete with BAMTech.

While Turner has not carried soccer in decades, it has made several aggressive sports media moves, from launching ELeague with WME-IMG to renewing its NCAA tournament deal with CBS through 2032. Turner also has been mentioned as a potential bidder for the UFC when those rights come to market next year.

On the Spanish-language front, Univision picked up the rights over the next three years. Fox did not submit a bid for them this time. Neither did ESPN, which owns ESPN Deportes. Sources said that NBC, which owns Telemundo, submitted a token bid for the Spanish-language rights.

For Univision, the move is another clear sign that the media company views live sports programming as the best way to grow its over-the-air channel, as it has invested heavily in soccer, including rights to MLS.

UEFA used the Switzerland-based company Team Marketing for its negotiations.


NBC Sports Network is in more homes than ever before, an unusual feat at a time when most other cable sports networks are dropping millions of subscribers per year.

Thanks to a new deal with DirecTV, which moved the channel to a more widely distributed tier, NBCSN jumped to a distribution figure of around 85 million homes, a figure that puts it on par with Fox Sports 1 and just a couple of million behind ESPN and ESPN2.

The most recent Nielsen report has NBCSN in 82 million homes, which suggests that the DirecTV move added around 3 million more.

For NBC Broadcasting and Sports Chairman Mark Lazarus, NBCSN’s growth amid the cable industry’s decline affirms a strategy NBC set in motion five years ago.

At that point, NBCSN executives decided that the best way to grow was not to compete directly with ESPN as a general sports channel. Rather, NBC decided to focus its program schedule around the sports that it carried to attract their loyal, passionate fan bases. That meant heavy focus on the NHL and English Premier League and little, if any, talk on the NBA or MLB.

“We knew what rights we had, and we based a strategy around them,” Lazarus said. “We are not trying to be someone else. We never wake up any day wishing we were somebody else.”

NBC Sports Network viewership trends

Year Primetime avg. viewers Total day avg. viewers
2016 392,000 173,000
2015 367,000 153,000
2014 300,000 148,000
2013 280,000 96,000

Source: SportsBusiness Daily research


Viewers have followed suit, as 2016 was the network’s most-watched year in prime time (392,000 average viewers) and total day (173,000 average viewers) — breaking a record that was set just the year before (see chart).

The few times that NBCSN deviated from its focused strategy — remember Michelle Beadle’s “The Crossover” daily studio show that was canceled in 2013? — served as a wake-up call to NBC executives to have a hyper focus only on the sports they cover.

NBCSN’s strategy is different from Fox Sports 1, which launched in August 2013 and set itself up as a direct competitor to ESPN. FS1 has mimicked ESPN’s programming schedule with high-priced live events in prime time and general sports studio programming during the day.

FS1 also is in 85 million homes, down from a high of 90 million in October 2013, according to Nielsen.

Once Nielsen estimates start counting over-the-top subscribers such as Sling and Hulu, those number could start to increase, Lazarus said.

Pay TV operators pay $1.30 per subscriber per month for FS1, according to Kagan. NBCSN gets 30 cents. ESPN still commands the biggest fee: $7.89 per subscriber per month.

ESPN and Fox both pay significantly higher prices for their live rights — which include MLB and major college football and basketball — than NBC.

“We’ve remained profitable the whole way,” Lazarus said. “We aren’t going to be a generalist sport channel. We want to go deep into the sports that we have.”

In addition to the NHL and EPL, NBC has used exclusive Olympic programming, IndyCar races and Formula One events to persuade cable operators to put it on more attractive tiers. Even NBCSN’s NASCAR coverage is exclusive in the second half of the season.

NBCSN simulcasts Dan Patrick’s radio show every morning as a way to get “daily relevance,” Lazarus said.

“Our strategy has paid off,” Lazarus said. “Distributors see a value in having this channel on their systems.”

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

The biggest question in sports media over the next two months is who will wind up with the NFL’s “Thursday Night Football” digital package.

Twitter’s $10 million deal to live-stream 10 Thursday night games is being shopped around to everyone from traditional media companies to social media companies to digital video companies.

The NFL wants to have a deal in place by the end of March to give the winning bidder a chance to develop advertising packages before the upfront selling season.

“You want to get out in front of the ad market,” said Hans Schroeder, the NFL’s senior vice president of media strategy, business development and revenue. “We’d like a deal done by late spring.”

Both Twitter and NFL executives say they were happy with the streams, which averaged 265,000 (weighted by duration) during the season.

For Twitter, the NFL deal allowed it to drive distribution on connected TVs. For the NFL, the deal helped drive an audience that was younger (70 percent was under the age of 24), more international (close to 25 percent was from outside the U.S.) and mobile.

“Mobile is the most important device in people’s lives,” Schroeder said. “We’re excited about another digital partner next season.”


MLB Advanced Media looked to the tech world to pick the new BAMTech CEO Michael Paull, but it didn’t look for a tech guy to fill that role. Rather, ESPN President John Skipper, who is on BAMTech’s board of directors, said they plucked Paull from Amazon because of the way he complemented the group’s existing executives. Skipper spoke with SportsBusiness Journal’s John Ourand last week about why BAMTech’s board chose Paull, who has spent his career with media companies like Amazon, Sony Music, Sony Pictures, Fox Entertainment and Time Warner. Skipper also spoke of the ESPN-branded over-the-top service that is expected to launch later this year.

Why did you choose Paull?

PAULL
SKIPPER: He’s a cultural fit. He’s a big-time sports fan. He’s got the right experiences. We wanted somebody from the digital world, and we wanted somebody who has consumer experience. We preferred to have somebody with real product experience, marketing experience and video experience. We have an extremely good CTO in Joe Inzerillo, so we didn’t have to have a completely technological guy. We also think he’ll be a good complement to Kenny Gersh, who’s running business development. We all liked him.

What’s your grand vision for BAMTech?
SKIPPER:
BAMTech splits into two services. As people talk to the minority owner, ESPN, about it, they forget that its core business is video platform

SKIPPER
services. BAMTech did the Super Bowl for Fox, signed deals to do video streaming for Eurosport, the NHL and PGA.

The other piece of the business is subscription sports services. That’s why we bought a minority interest because they’ve got the technology and they’ve already got some experience in marketing those subscribers. We believe together that they bring a bunch of rights and we bring a bunch of rights. We’ll buy other rights, which will allow us to bring a number of sports subscription products to market. There probably will continue to be multiple products that will come to market. One of them will be a multisport, aggregated, ESPN-branded product.

When?
SKIPPER:
We expect to launch a multisport ESPN-branded product in calendar year 2017. Michael starts March 1. We’re going to allow the new CEO a fair amount of leeway to succeed, as opposed to having him come into a pre-existing conception of “Here’s what it’s going to be, and here’s when we’re going to launch it. So just do it.” I have every expectation that the board will hear from Michael at some point saying, “I’ve been here for 45 days, here’s my plan.”

Only 45 days? You’re a tough boss!
SKIPPER:
I’m not his boss. I want to be a little careful. He doesn’t report to me. He reports to the board.

Why do you need to launch an OTT service?
SKIPPER:
People who are interested in what they care about really care about it. It’s not like the cult audience for some ridiculous 352nd most popular drama series made this year. The people who care about Big South football or A-10 basketball really care. We’re looking to serve that. We think it’s pretty clear that we need to have direct relationships with customers and sports fans. This is a way to do that. Think of continuing the evolution from broadcast TV to cable TV to internet to smartphones to apps. This is just another way with the new over-the-top capability of providing sports content to sports fans. It’s one of the places sports media is going. We’ll see a lot of people moving toward that. Our goal here at BAMTech is to be a leader in that space. Our goal at ESPN is to have a branded service in that space that is the leader.

Mark Phillip, founder and chief executive of Austin-based Are You Watching This, has staked his professional life around the concept of FOMO.

Fear of missing out is the underbelly of the technology company, which has quietly built over the past decade a growing business developing excitement ratings that rank in real time how compelling a live sporting event is and then licensing data around those rankings.

“One of out every four days has more than 100 sporting events going on, and some of your busy fall Saturdays have more than 500,” Phillip said. “That presents a real challenge for a fan to know what’s on, what’s available, and what’s getting good. So what we’ve developed is sort of a FOMO insurance that places an objective measure on each game with just a garnish of subjectivity.”

Are You Watching This founder and CEO Mark Phillip was involved in the development and release of Turner’s Catch Sports mobile app.
Photo by: ARE YOU WATCHING THIS
Phillip and Are You Watching This most recently was involved in Turner Sports’ development and release last month of its new Catch Sports mobile application, and after a long period in a self-described “stealth mode,” has started an aggressive expansion effort as demand for real-time data services and analytics mushrooms around the industry.

The company works with cable and satellite distributors such as Comcast, data companies

including Sportradar, and sports media outlets such as Bleacher Report, CBS Sports, and Telstra Communications. Are You Watching This licenses its data out to its clients, often at a rate of a penny per user or subscriber per month.

The company ranks each game on four primary levels: OK, good, hot, and epic, with the latter representing a must-see event such as the completion of a perfect game in baseball or major upset in college basketball. Those rankings fluctuate in real time based on ongoing events, are customized to each individual ZIP code, and are designed to get smarter as more data feed the company’s algorithms. Users then receive a series of notifications and alerts highlighting the best games and where to find them.

The rankings and data have shown up on Are You Watching This’ own website, and in a variety of consumer-facing applications such as the Catch Sports app and Telstra’s SportsFan mobile app in Australia. The company is working on a deeper integration into Comcast’s X1 platform.

Are You Watching This excitement ratings are somewhat similar to those created by California-based rival Thuuz, and Phillip acknowledges the role the company has played in helping build a market for such data and services, and the concept of real-time sports discovery more broadly. But Phillip and his clients say that Are You Watching This has created a more refined model, while still operating on a white-label basis.

“OneTwoSee has had a productive relationship with Mark and his team for some time now,” said Chris Reynolds, chief executive and co-founder of the Comcast-owned sports technology outfit that works heavily in the visualization of real-time data on both TV and digital platforms. “We look forward to the continued collaboration with them to bring innovative sports products and services to millions of Xfinity X1 customers.”

Unlike many tech startups, Phillip has refused to take on venture capital and has self-funded the operation, which has been profitable for the past three years. But to get to that profitability, Phillip initially maxed out several credit cards and had several moments of near-ruin financially.

“My Series A was a credit card,” Phillip said. “But this is my life’s work and I’m not really wanting to turn a piece of that over to somebody else.”

Phillip is also developing a hardware-based version of his excitement ratings, carrying a working title of the “Ring of Fire.” The device, a lighted ring that changes colors based on the incoming excitement level data, is designed to work foremost in sports bars and other busy, multiscreen environments and help direct viewer attention to the best games in progress.