Cable Vision: Kay Koplovitz
Kay Koplovitz rarely gets credit for championing the growth of sports programming on cable television. But dig a little deeper and her fingerprints are all over that evolution.
She was the first person to launch a cable sports network in 1977, a full two years before ESPN went live with its service. Koplovitz was the first to convince cable operators to pay a license fee for that channel, called Madison Square Garden Network, effectively creating the dual-revenue stream with advertising that has helped other cable networks, like ESPN, grow so big. She was the first to launch an advertiser-supported network.
In short, Koplovitz is a sports television pioneer.
Decades before broadcasters, leagues and teams based their business plans on launching their own cable sports channels, Koplovitz was busy creating a blueprint that those networks continue to follow.
This is the second installment in the series of profiles of the 2018 class of The Champions: Pioneers & Innovators in Sports Business. This year’s honorees and the issues in which they will be featured are:
Feb. 26 Ben Sutton
March 5 Kay Koplovitz
March 12 Sal Galatioto
March 19 Howard Ganz
March 26 John Wooten
April 2 Paul Beeston
When the story on the early days of TV sports gets told, though, Koplovitz rarely receives credit even though the biggest successes in the business followed the strategy originally set by her.
“I think it’s a nice thing to be able to correct the record,” said Koplovitz, flashing a wry smile toward the end of a two-hour interview. She spoke from her New York apartment that overlooks Central Park and offers 360-degree views of Manhattan. “I don’t go around bragging about what we did. But I feel it was extremely valuable — it was all sports in the beginning. It really opened up the sports world to the idea that it could be a tremendous programming network in and of its own. Nobody thought of it before then.”
Over the first few years of building up MSG Network, the precursor to USA Network, Koplovitz became the first television executive to see sports as a way to grow a fledgling service in a nascent industry. She aggressively signed deals with top sports properties — something no other network executive even thought of doing. While ESPN launched with a programming lineup of little-known sports like slow-pitch softball and lumberjack games, Koplovitz cut deals with the biggest sports leagues in the country — Major League Baseball, the NBA and NHL.
“It was my vision that this would be the sports network of all these major league sports,” Koplovitz said. “That’s what I built.”
Not only did Koplovitz cut all of those deals, she was almost always the only woman in the room during every negotiation. She cultivated relationships with the biggest names in sports and media that still last to this day.
Take former NBA Commissioner David Stern, for example, who credited Koplovitz with developing the programming idea of a Thursday night NBA doubleheader — a TV series that remains a reliable ratings draw today.
Stern first met Koplovitz in 1978 when he was the NBA’s general counsel, and they remain good friends to this day.
“Kay was convincing to me,” Stern said. “There were only 4 million cable households at the time. There was no regular and continuous cable network for sports. She led the way.”
Longtime sports and media executive Joe Cohen, who sold the first sports rights package to Koplovitz in 1977, also spoke of Koplovitz’s vision. Cohen, who was president of Madison Square Garden, described Koplovitz as having a unique talent where she was just as comfortable running a network as she’d be working a sales call.
“Kay was an outstanding and natural choice to run the network,” Cohen said. “It was never a debate about who would run it. Kay made the channel a success. That is undeniable.”
Koplovitz’s strategy of focusing on sports already had been executed by the time ESPN launched in September 1979. Bob Schmidt, who ran the National Cable TV Association from 1975 to ’79, recalled a 1979 trip to Bristol, Conn., as ESPN was preparing to launch. Schmidt marveled at ESPN’s “campus,” which essentially was a sprawling rural field with one unfinished building, a bunch of satellite dishes, some trailers and a barn.
He said he was skeptical at the time of ESPN’s future, in part because Koplovitz already ran a successful sports channel that had deals with all of the major sports leagues.
“As a woman in those days, Kay probably wasn’t getting much credit for anything she did,” Schmidt said. “Kay did much more than was ever acknowledged, and she did it well.”
In fact, ESPN founder Bill Rasmussen questioned whether his network would have even been able to launch without Koplovitz’s help. Koplovitz rented Rasmussen transponder space on a satellite in October 1978, a year before ESPN’s official launch. Rasmussen used that transponder space to produce two games from the University of Connecticut — one basketball game and one soccer match — that would demonstrate to potential investors how the service would look.
“I wonder if we would have run out of money before our launch if Kay didn’t rent us space on her transponder and we had to buy our own,” Rasmussen said. “We kind of all promoted the cable business together back then.”
Koplovitz’s road to sports TV actually started in the mid-1960s when she was a University of Wisconsin student traveling through Europe. While in London, she attended a talk on satellite technology that was given by the science fiction writer Arthur C. Clarke that essentially spurred her career in the media business.
“I was so moved by listening to the power of these satellites, I went to graduate school and wrote my master’s thesis in 1968 on satellite technology and its potential impact on communications on a global scale,” she said.
After graduation, Koplovitz bounced around a couple of jobs before landing in the cable industry, which, back then, was a glorified cable antenna service that provided little more than transmitting broadcast TV signals to communities that couldn’t receive them.
Koplovitz was convinced that the cable industry had much more potential than that. She saw that cable systems could use satellite technology to distribute new channels and live programming in ways some industry executives could not fathom.
Her idea was not necessarily popular in the cable industry. The NCTA’s Schmidt recalled that his association’s board was divided between visionaries like Koplovitz who wanted to grow the business and operators who were content to remain an antenna service.
“The idea of using satellites was a new concept,” Schmidt said.
Early on, Koplovitz saw sports as a way to help those cable operators see the huge potential for the businesses they owned. She pointed to the 1975 Muhammad Ali-Joe Frazier “Thrilla in Manila” as the turning point. That fight is the “event that changed television history,” Koplovitz said.
Until then, HBO had built a nice business by distributing videotapes of movies and sports to cable systems, which would, in turn, play the tapes for their subscribers. Koplovitz knew that satellite technology could make that programming more timely. The problem was that U.S. regulators did not allow cable systems to use satellites in such a way.
Enter the Ali-Frazier fight. To show the potential of satellites, Koplovitz’s longtime friend and business partner Bob Rosencrans, president of UA Columbia, installed a 10-meter satellite dish at his Vero Beach, Fla., system to show the fight live. Koplovitz, who had HBO as a client at the time, and Rosencrans invited around 150 cable industry executives and government regulators to Vero Beach to watch the fight.
The transmission worked flawlessly, and Koplovitz couldn’t help but think of how the sleepy cable business was about to explode. After the fight, she recalled walking back to her hotel with Rosencrans.
“Bob knew this was my dream,” she said of Rosencrans, who died in 2016. “At that time, we were saying, this is it. This is what we’re going to do. We’re going to launch these television networks to cable systems.”
Sure enough, soon after the fight, many cable systems bought their own satellite dishes to have access to that kind of programming, and the Federal Communications Commission relaxed rules on who could use satellites.
The Ali-Frazier fight also confirmed to Koplovitz that sports programming would be the best way to grow the business. At the time, HBO carried a sports package from Madison Square Garden. But the network was more focused on movies.
Koplovitz and Rosencrans wanted to get that package. They knew MSG’s Cohen well and waited until that contract ended before signing their own deal and picking up 125 MSG events.
That proved to be the first step in the launch of MSG Sports.
“Bob Rosencrans would have been satisfied having just the Madison Square Garden events, but I pushed and pushed,” Koplovitz said. “I said, ‘It’s not good enough. We have to have sports on every night. We have to get the major sports. This is going to be really big.’”
In the 1970s, sports TV generally was relegated to weekends. Koplovitz wanted to carry games during the week, too, so she endeavored to pick up as many rights as she could.
One of her first meetings was with Yankees owner George Steinbrenner, who eventually sold her the rights to his team’s games that Koplovitz could carry nationally. In June 1978, Koplovitz kicked off the package by carrying a Red Sox-Yankees game and caught lightning in a bottle. The game was thrilling, with the Yankees winning 6-4 in 14 innings.
The next day, MLB Commissioner Bowie Kuhn called. As Koplovitz recalls, the conversation went like this:
“Miss Koplovitz, I see you televised the Yankee game last night.”
“Oh, yes. Wasn’t it great? It went extra innings!”
“That’s not why I’m calling you, Miss Koplovitz.”
“Oh, why are you calling me?”
“I’m calling to tell you that you didn’t have the right to televise that game.”
“Oh, yes I did. I’ve got the contract right here signed by George Steinbrenner. I can send you a copy of it.”
“No, that’s not the point, Miss Koplovitz. He didn’t have the right to sell it to you.”
Koplovitz realized that her deal was about to fall apart, which would have created a huge programming hole in the summer months. She told Kuhn that she would call him back and went to huddle with her husband, Bill, who was a communications lawyer who also worked in the office. It soon became clear that she didn’t have a leg to stand on, so she decided to try to negotiate with Kuhn.
She had to find a solution, since she had convinced cable operators to help subsidize the purchase. Cable operators paid an extra two cents per subscriber per month to get the Yankees games.
She called Kuhn back and began the conversation by trying to convince him that the deal would be good for baseball. Kuhn didn’t buy it.
Halfway through the conversation, Koplovitz decided to pivot. Her recollection of the second phone call went like this:
“OK, I’ll trade you,” Koplovitz said.
“Trade me what?”
“I’ll trade you this Yankee contract for a contract with Major League Baseball.”
The phone went silent for 30 seconds. Then Kuhn replied, “I’ll see you in my office tomorrow morning, Miss Koplovitz.”
Koplovitz signed a deal with MLB at a six-figure price that was dependent on MSG Network growing its subscriber base.
She then went to the NBA to meet with Stern, who also had been talking with ESPN at the time before its launch. Stern opted to sign a three-year deal with Koplovitz worth $400,000 in the first year and more in subsequent years based on growth.
“Kay smiled, and she talked gently,” Stern said. “But she did whatever she said she was going to do. I just had this sense that this was someone who was going to be able to make good on every promise that she made.”
In the winter, she put NHL games on Monday nights and NBA games on Thursday nights. In the summer, she had MLB games on her Thursday night schedule. She filled in the gaps with other deals she signed with the Masters, U.S. Open tennis, the Major Indoor Soccer League and some college sports.
Koplovitz’s vision of using sports to grow her network hit a roadblock in late 1981 when Time Inc., Universal and Paramount bought USA Network. The Hollywood studios did not see the same value in sports as Koplovitz. They preferred to put their own movies and TV shows on the network.
The studios’ dislike of sports programming grew even stronger as ESPN got bigger and started bidding for some of the rights. Not wanting to spend more on programming that they didn’t really want, the studios stepped back.
“I really fought with them tooth-and-nail for more than a year,” Koplovitz said. “I told them that I would launch a separate entertainment network and keep the sports one. I knew the sports network was going to be so big. They were not really that supportive of the sports.”
Even without the major sports, Koplovitz remained at USA Network, which she built into one of the most successful cable channels in the business, reaching first in cable prime-time ratings, she said, where it remained for 14 years. Rather than football or basketball games, she used syndicated TV series and made-for-TV movies as a way to grow both ratings and distribution.
“One of the big criticisms of USA in the cable industry was that it was general entertainment,” she said. “People would complain, ‘We have broadcast networks for general entertainment. Why do we need cable networks for that?’ My response was always the same: ‘Because people watch it.’”
She ran USA Network for two decades, serving as chairman and CEO until 1998, when it was sold to Barry Diller’s HSN Inc. Even as she built a cable entertainment empire, Koplovitz remained fond of the sports TV business that she helped create.
“The reason Kay has been successful is because she looks at the future,” said her husband, Bill. “One of her friends said to her at one point, ‘Kay, you just don’t have a rearview mirror.’ She can see what’s going to happen.”