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Volume 21 No. 26

Media

George Bodenheimer had only been on the job as ESPN’s acting chairman for a couple of weeks when he got word that Fox and the NFL would partner on the NFL draft, jointly producing a show that would directly compete against ESPN.

 

ESPN executives were angry. ESPN created the NFL draft as a TV show 38 years ago and popularized it to unprecedented heights over the years. It was one thing when the NFL Network started covering it. But when the NFL brought in a competitive broadcast network, it was seen as a slap in the face.

Soon after, Bodenheimer heard rumblings that the NFL was going to put ESPN’s wild card playoff game on Fox. The move, which still hasn’t been completed, potentially leaves ESPN with a $1.9 billion per year deal that features no NFL playoff games — a scenario that miffs several executives in Bristol.

ESPN’s relationship with the country’s most powerful sports league never has been totally in sync. Bodenheimer, after all, was ESPN’s president in 2004 when his network produced the “Playmakers” series that infuriated the league. ESPN wound up canceling the series after just one season because of pressure from NFL executives.

Still, Bodenheimer was struck by these latest events. Insiders say that Bodenheimer had never seen the NFL’s relationship turn this sour.

New ESPN President Jimmy Pitaro is known in the industry as a relationship builder.
Photo: espn images

ESPN is dealing with a declining subscriber base and paying higher rights fees. A host of digital competitors are waiting in the wings to get some of its rights. It’s launching a direct-to-consumer service later this spring.

But multiple sources pointed to ESPN’s fraying relationship with the NFL as the top priority for new ESPN President Jimmy Pitaro. Pitaro considers the NFL relationship a priority and already has met with league executives in his first few days on the job.

During his three-month stint in charge of ESPN, Bodenheimer made an effort to start getting that relationship back on track. He visited with the league’s top officials and offered various olive branches to curry favor.

In one meeting, Bodenheimer committed to have ABC carry the third day of the NFL draft (rounds 4-7), a simulcast of the show that will be on ESPN. Bodenheimer made this deal despite some anger in Bristol that the NFL was working with Fox on a competing telecast, sources said.

The fact that Bodenheimer had to make such a concession on the NFL draft offers an illustration of just how bad the relationship between the two powerhouses had become. During Super Bowl week in Minneapolis, NFL executives privately described the relationship as the worst they’ve ever seen. In particular, they pointed to stories on ESPN.com and “Outside the Lines” that they felt went out of their way to portray the NFL in a bad light.

Their complaints ranged from the number of times ESPN’s “Outside the Lines” covered the concussion issue to the number of stories from feature writers Don Van Natta and Seth Wickersham about Commissioner Roger Goodell’s salary, the league’s handling of the player protests, palace intrigue at the Patriots and the ongoing dispute between Goodell and Cowboys owner Jerry Jones.

Plus, there were all the negative headlines surrounding the NFL this season that made their way onto “SportsCenter” or the home page of ESPN.com.

The NFL always has had a hard time differentiating between ESPN the promotion arm and ESPN the media outlet. It’s not a new development. In 2013, Goodell and then NFL executive Steve Bornstein met with former ESPN President John Skipper at a Manhattan restaurant to pressure him to back out of its affiliation with PBS’s “Frontline,” which was producing a documentary on concussions. ESPN wound up pulling out of the partnership.

In the past, ESPN had executives in place who could mollify the NFL. Over the past two years, though, ESPN did not. Skipper did not engage with the people who matter at the NFL, like Goodell and Brian Rolapp, executive vice president of media, sources said. Skipper, who was known to favor basketball and his relationship with Adam Silver over the NFL and its leaders, never fully engaged in the partnership. He did not socialize with or develop close ties to influential owners, like Patriots owner Robert Kraft and the Cowboys’ Jones. It seemed like the folksy Southerner had little in common with the people at the top of the NFL.

When he was ESPN’s president, Bodenheimer would check in with league officials regularly to establish open lines of communication, often having private dinners. Skipper eschewed all of those types of meetings with Goodell, Rolapp or any of the owners, sources said.

“All of those issues just festered, leaving us where we find ourselves now,” said one ESPN executive.

Skipper, and many others at ESPN, always chafed at how poor the “Monday Night Football” schedule was every season. When ESPN cut its rights deal, it paid for what the NFL called the “cable” package, a characterization that always irked ESPN executives who felt the difference between “cable” and “broadcast” was negligible. To the NFL, however, a “cable” package equated to the least competitive media package.

ESPN executives believe that for the rights fee it pays — $1.9 billion per year — it should have a stronger package. ESPN executives were particularly angry in 2014 when CBS bought the “Thursday Night Football” package and wound up with a better schedule than ESPN.

ESPN executives felt handcuffed because its deals with cable and satellite providers carried a provision that its rate would be cut if ESPN ever lost the NFL.

Over a five-year period ending around 2015, ESPN methodically stripped that clause out of its affiliate deals, meaning that the rates cable and satellite distributors pay are not tied to ESPN having the NFL. That benefited ESPN’s long-term business. It also helped its executives get some swagger back, as insiders say it emboldened them to push back more at the NFL when they feel aggrieved.

Other cracks surfaced. There was Bob Iger’s ill-fated pursuit of the Carson, Calif., NFL stadium project. There was also ESPN’s decision to scrap its popular Friday night Super Bowl party. ESPN opted to take a lot of its hospitality money out of the Super Bowl and put it in the CFP championship, which was held in Atlanta this year.

This is the environment that Pitaro inherits. Pitaro is known as a smooth relationship builder and excellent negotiator. He will put both of those skills to the test as he looks to fix one of ESPN’s most important partnerships.

Former ESPN President George Bodenheimer will stay with the company through the end of the year in an advisory role to new president Jimmy Pitaro.

 

As Pitaro’s consultant, Bodenheimer will be a sounding board as the new president learns the inner workings and culture around ESPN. At least at the beginning, Bodenheimer will help Pitaro cultivate relationships with prominent sports executives, setting up and attending meetings together.

In December, Bodenheimer stepped in as an acting chairman after John Skipper resigned, citing a substance abuse problem. Bodenheimer served in that capacity for 77 days.

As acting chairman, Bodenheimer calmed Wall Street’s concerns following Skipper’s sudden resignation. He provided a calm leadership hand for ESPN employees, too, but it was clear that Bodenheimer had little interest in diving into the company’s daily mundane matters.

He attended the CFP Championship game in Atlanta weeks after coming back but made few public appearances that an ESPN president would make. He opted out of making the trip to Minneapolis for the Super Bowl or Los Angeles for the NBA All-Star Game. Bodenheimer primarily stayed in Bristol, though he watched the Super Bowl from Florida, sources said.

Bodenheimer’s right-hand man, executive vice president of administration Ed Durso, also will stick around in a consultancy role. Durso planned to retire in December but returned when Bodenheimer became acting chairman.

Bodenheimer is a legendary figure in ESPN’s history. He originally was hired to work in ESPN’s mailroom in 1981. Seventeen years later, he became ESPN’s president. His 13-year stint as president (1998-2011) is the longest anyone has served in that position.

Justin Connolly and Burke Magnus, two of ESPN’s top executives who were under consideration to run the company, are working without contracts and already have been contacted by several companies interested in prying them away, according to several sources.

 

The executives’ phones started ringing March 5, soon after Disney appointed Jimmy Pitaro as president of the company. Both Connolly, executive vice president of affiliate sales and marketing, and Magnus, executive vice president of programming and scheduling, had interviewed for the ESPN president job.

ESPN’s executive vice president of content, Connor Schell, who also was considered for the president job, signed a contract just last year that will keep him tied to ESPN for at least the next several years.

Insiders say that Pitaro’s top priority is to convince Connolly and Magnus to stay, as both carry sterling reputations internally and externally. Connolly, who runs ESPN’s lucrative affiliate business, often was portrayed as the heir apparent to former president John Skipper and is well known throughout the media business, as well as college sports from his time running the SEC Network.

Magnus is the executive charged with negotiating rights deals with leagues and has deep relationships throughout the sports business.

While Connolly and Magnus are attracting outside interest, both executives have deep roots in Bristol. Together, they have spent a combined 38 years at the company; Magnus started in 1995, and Connolly was hired in 2003.

It’s not just the contracts of these top two ESPN executives that Pitaro has to shore up. He is walking into a corporate culture that has suffered through terrible morale problems in recent years, as ESPN has laid off hundreds of employees and cut costs.

The first non-ESPNer to become president since the 1980s, Pitaro will oversee a workforce that has prided itself in being more entrepreneurial and less bureaucratic than Disney — though those two cultures have become much closer in recent years as Disney boss Bob Iger has gotten more involved in ESPN business.

Pitaro’s first attempt at tackling the corporate culture comes March 14 when he hosts an employee town hall in Bristol.

Around four years ago, as several members of Golf Channel’s management team spent a night at the Topgolf facility in Atlanta, a friendly competition developed as they aimed their 7-irons at various targets.

That was the first time the group had seen a Topgolf facility. They were so impressed, they ended up developing a TV show that finally will see the light of day April 9 when Golf Channel launches “Shotmakers.” It’s a competition-based show filmed at the Topgolf facility in Las Vegas — sort of how “American Ninja Warrior” would look if it was produced by the 24-hour golf network.

This is a story about how that TV show was born and the years-long process for the show to be greenlit.

Golf Channel President Mike McCarley, in particular, was enthused by that evening in Atlanta. He saw a growing trend with facilities like Topgolf becoming more popular than ever. The trend proved to be real. The last participation study in 2016 showed that the United States had roughly 25 million golfers for traditional 18-hole golf, and another 7 million who use driving ranges, Topgolf and simulators, McCarley said.

Golf Channel is known for its tournament coverage. But it also produced long-drive competitions and reality shows such as “Big Break.”

McCarley asked his producers — Tommy Roy and Tom Randolph — to play the Topgolf in Atlanta a few times and come up with ideas for how Golf Channel could produce a show from there.

“We wanted to create something that is where golf is headed as a participatory sport,” McCarley said. “Much like the way golf participation has evolved, this also can be a look into the future of what a golf competition could be.”

“Shotmakers” will feature co-ed teams competing at Topgolf’s Las Vegas facility.
Photo: golf channel

Roy and Randolph returned with ideas about the type of games they could develop at Topgolf and how they would be able to shoot them and light them.

McCarley and his team took the idea to Topgolf executives and talked with them about partnering on the project. They spent the ensuing couple of years firming up plans.

Topgolf developed its showcase facility in Las Vegas in 2016 in conjunction with MGM. If the companies were going to move forward with a show, it made sense that the Vegas facility should host it, at least the first time.

Based on the popularity of team matches in golf, like the Ryder Cup and Presidents Cup, they decided to develop a competition with teams, rather than individuals.

“We started developing this show concept, which evolved into a competition, over the last couple of years,” McCarley said. “We sat down with the Topgolf guys in Augusta last spring and started walking through some of these concepts. Where we landed is based on some of the Topgolf games that any consumer can go and play.”

The seven-episode series launches April 9 and will have nine co-ed teams compete against each other with their shotmaking ability. Episodes will run twice a week, on Monday and Tuesday nights at 9 p.m. ET. The series finale is planned for April 30.

Each episode will have three rounds. There’s a one-shot qualifier to determine seeding for the second round. The two lowest-scoring teams will compete in an elimination round, with the losing team leaving the show.

Golf Channel will produce and own the series. Topgolf signed on as a sponsor and will be a partner in the production.

Each team carries its own sponsor, with teams wearing uniforms where they will look more like Premier League players than golf professionals. CDW, Corona Premier, Travelocity, MGM Grand, Avis and Massage Envy signed up to sponsor teams. Topgolf and Waste Management will sponsor two teams.

“I look at this as a modern-day twist on the traditional game of golf,” McCarley said.

Amanda Blumenherst and Shane Bacon will co-host the series, with Chantel McCabe serving as a course reporter.

Competitors include current professional golfer Jamie Puterbaugh, trick-shot artist Tania Tare, driving range owner Robbie Biershenk and golf lifestyle blogger Nikki Bondura.

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


Cacciato

Ohio University named former sports media executive Matt Cacciato as its director of the Master of Sports Administration program.

 

A former executive who spent two decades in the affiliate departments of YES Network, Fox Cable and ESPN, Cacciato has spent the past two years as an executive in residence and lecturer for the university’s Department of Sports Management.

As per your recent article on the Miami University podcasts by Octagon’s David Schwab, I did not see Wayne Embry’s name mentioned. I hope you merely failed to include Wayne in your listing. As I am sure you know that Wayne was the first black GM in the NBA and later the first black team president in the NBA.

This is in addition to a great college and NBA player career.

George J. Andrews
Sports attorney

 

The framed pen in Hochberg’s office
Photo: max taylor

I enjoyed your Kay Koplovitz piece immensely. I was there for so much of that cable history and the article brought back many fond memories. In fact, I have framed in my office the pen used to sign the first pay-cable contract, the 1972 deal between the Milwaukee Bucks and Home Box Office.

Philip R. Hochberg
Lawyer, Potomac, Md.

The Charlotte Hornets have extended their local media deal with Fox Sports Southeast, covering the team’s rights for the bulk of a decade.

 

Starting next season, Fox will pay the team an annual rights fee in the low-to-high $20 million range, up from about $14 million this season, sources said.

The contract is just shy of 10 years and ends with a rights fee in the high $20 million range. Sources said the deal’s financials are in line with other NBA teams from similar-sized markets.

The Hornets rank 20th in local TV ratings.
Photo: phil ellsworth / espn images

Fred Whitfield, Hornets president, and Pete Guelli, Hornets executive vice president and chief sales and marketing officer, led negotiations for the team. Fox Sports Regional Networks President Jeff Krolik led negotiations for Fox. Neither the team nor Fox would comment on terms of the deal.

Whitfield said the long-term partnership with Fox Sports has improved TV distribution. The team struggled early after original team owner Bob Johnson’s failed effort to create a team-run network, which forced the team to put its games on a local all-news channel. Fox Sports Southeast has been the team’s TV partner since 2008, helping broaden the team’s TV distribution from about 750,000 homes to today where the games reach nearly every area in North Carolina and South Carolina.

“We are in almost 4 million households,” Whitfield said. “The biggest focus has been on distribution and Fox has helped us be a regional team.”

Fox has the rights to broadcast all regular-season games in the new deal. This season, 79 of the team’s 82 regular-season games were aired on Fox Sports Southeast.

The new agreement for the first time will include two preseason games, with the current 30-minute pregame and postgame shows to continue.

The new deal comes as the Hornets through Feb. 12 had a 0.93 rating over 52 games, up 3 percent from the same period last season. Through Feb. 12, the team ranked 20th out of 27 NBA teams with ratings data available.

Alan Gold of Evolution Media consulted on the deal for the Hornets.

The upswing in the team’s media rights fees comes after the Hornets recently signed another major deal: a three-year jersey patch agreement with LendingTree that is estimated to be worth between $5 million and $7 million annually.