Vision for 'The Match'
One of the most eagerly anticipated issues facing the sports business over the past two years has centered on how the powerful combination of AT&T-Time Warner would position itself to sports leagues as it builds out its media portfolio.
The answer was delayed time and again by a protracted regulatory process. It wasn’t until WarnerMedia completed its rights negotiation to carry the Tiger Woods-Phil Mickelson Thanksgiving weekend showdown that the industry finally got a much-anticipated glimpse at how negotiations with the newly merged company will look.
The takeaway was crystal clear: The media behemoth will emphasize the breadth of its offerings — mobile phones, telecommunications and satellite distributors, streaming services and cable TV channels — to convince leagues and teams to trust WarnerMedia with their media rights. WarnerMedia does not have a broadcast television network. But its executives believe that the huge variety of its offerings will be incredibly appealing to sports leagues and conferences.
“This is not about a linear platform,” said Turner President David Levy. “This is about a digital platform — extensions into OTT, great brands like HBO and Warner Bros., AT&T’s 100 million mobile subscribers. That is a powerful portfolio as we talk about going into securing whatever rights come up next.”
The deeper pockets that AT&T brings won’t hurt either. Sources said WarnerMedia paid $10 million to secure rights to “The Match” — the Nov. 23 head-to-head competition between Phil Mickelson and Tiger Woods that WarnerMedia will make available via pay-per-view. The company has not set a pay-per-view price yet, though it is expected to charge viewers less than $30.
Interest came from virtually every major U.S. media company, and WarnerMedia’s offer was higher than bids from others, including CBS, ESPN, Fox Sports and NBC Sports Group.
The deal came two months after a federal judge ruled that AT&T could move forward with its Time Warner acquisition — a decision the U.S. Justice Department is appealing. Last week’s deal provided the first illustration of how the company plans to operate and how Levy could use the company’s vast assets to build its sports inventory even further.
Deals On Deals On DealsDirecTV: Handling linear PPV
AT&T U-verse: Handling linear PPV
Bleacher Report: Producing highlights; shoulder programming
Turner International: Selling globally
TNT: Broadcasting re-airs
B/R Live: Handling live streaming PPV
HBO: Producing "24/7"
“It’s nice to have the shackles off,” Levy said. “There’s a new mantra at WarnerMedia and how we’re going to work together and evolve.”
For last week’s deal, that includes having its B/R Live streaming service, DirecTV and U-verse carry the pay-per-view. It includes Turner International, which will sell the event as a pay-per-view globally. It includes cable channels HBO, which will promote the event through its “24/7” series, and TNT, which will produce the event and carry re-airs. Bleacher Report will have highlights and other programming.
“Even Warner Bros. is thinking about ways we can work as well,” Levy said. “This is our complete portfolio. I took a Fabergé egg and put it in the middle of the table and said let’s figure out how we can get all this done. … This is a very good demonstration of how we think sports should be watched, viewed and discussed.”
Levy, one of the highest-ranking Time Warner executives to remain with the company, has a well-known reputation as a dealmaker who values sports programming. With Turner, Levy had cut deals with the biggest leagues — the NBA, MLB and NCAA. He recently made a deal to bring the popular UEFA Champions League to B/R Live. The way he orchestrated the deal for “The Match” shows the influence he has in the new company, cajoling all the different parts of AT&T and Time Warner to work together.
“We all know that the success for this company moving forward is going to be to figure out ways to work more closely together,” he said.
Levy said the success of the golf event goes beyond counting pay-per-view buys. “In today’s media environment, the measure of success centers around all these cross-platform engagement opportunities,” he said. “For example, if I want people to get branding and understand what the app is and download the app, this is a great way and a great opportunity to start that product off.”
Negotiations for “The Match” took about five weeks. Levy negotiated the event’s media rights with CAA’s Michael Levine, Nick Khan and Alan Gold. CAA worked with the golfers’ agents to claim the media rights for the event. Levy also negotiated with Mickelson’s and Woods’ agents — Lagardère’s Steve Loy and Excel Sports Management’s Mark Steinberg, respectively — to get their buy-in. He had to negotiate with the PGA Tour because it is a PGA Tour-sanctioned event. And he had to negotiate with MGM, which is hosting the match at its Shadow Creek course in Las Vegas. He laughed that the shuttle diplomacy was akin to that of former Secretary of State Henry Kissinger.
“I thought the $11 billion deal we negotiated with the NCAA and CBS was hard,” Levy joked. “This could have been harder.”