SBJ Media: ESPN Not Close To Breaching Affiliate Deals
After a 7-week hiatus, SBJ Media returns tonight and will be delivered to your inboxes every Monday and Wednesday. Michael Smith’s SBJ College returns tomorrow and will be published every Tuesday and Thursday afternoon. It’s nice to be back.
ESPN REBATE TO DISTRIBUTORS LOOKS TO BE UNLIKELY
- Even though we’re coming up on nearly two months without live sports, ESPN is not close to breaching its affiliate deals, which call for a specific number of live event programming hours over a full 12-month period, according to multiple sources. If ESPN cannot meet those programming benchmarks after 12 months, it still would have an additional six months to remedy the situation. That means that, legally speaking, distributors can’t start seeking rebates until September 2021 at the earliest.
- From one older contract that was read to me by a distribution source, ESPN was required to have 1,300 hours of marquee live programming over a 12-month period. Current contracts have similar language, I’m told. ESPN’s deal announced this morning for the Korean Baseball Organization almost certainly would not be considered marquee programming for that minimum guarantee. But the recent NFL Draft would, as would the UFC, which is planning to start up again soon. Distributors initially called for including those minimum-programming-hour clauses in these contracts as one way to guard against having ESPN shift its best programming to other channels or platforms -- think of The Ocho or ESPN+.
- RSN affiliate contracts generally are different. Rather than focusing on the number of hours, most RSN deals specify the number of games it has to carry from specific leagues, sources said. Since both the NBA and NHL were nearing the end of their regular seasons when they postponed games, most RSNs already were close to providing those minimum number of games. The big question marks come down to when the MLB season starts and how many games teams play. Most RSNs have a different minimum number -- somewhere between 120 and 150 games.
- The upshot is that it appears unlikely that sports networks like ESPN or the RSNs will provide full rebates to distributors -- especially since most leagues have postponed games, not canceled them. Considering how much the pandemic is hurting media companies like Disney, NBCUniversal and ViacomCBS, it’s unlikely that the media companies will be open to relaxing those affiliate deals, sources say.
REMOTE PRODUCTION TO INCREASE UPON RETURN OF SPORTS
- Sports TV production execs across the business have spent the past several weeks in meetings trying to figure out how to produce events from stadiums and arenas that are bereft of fans. The networks are pursuing slightly different strategies, but so far there seem to be several common threads. All the networks will rely more on remote productions, sending fewer people to events. And they will experiment with new camera and microphone positions in the venues.
- ESPN Exec VP/Event & Studio Production Stephanie Druley: “We are extremely well positioned for [remote productions]. I remember when we first started it, there was a lot of resistance internally. Now, pretty much everybody is open to it. ... It might be borne out of necessity more than anything else. But if you told me that 90% of NBA or MLS had to be done via Bristol, I’d have no issue with it. We are incredibly comfortable and well positioned to do those things.”
- Druley said ESPN still would send a full production team to cover its bigger events. “But we will be putting a higher bar on what are those full-blown productions than we did before March 12." Druley pointed to the studio show “The Jump,” which is being produced remotely. “Would that ever be Opening Day baseball? I don’t think so,” she said. “But could it be used for a lesser viewed game? We are in a spot right now that is going to really change how we look at, prioritize and produce our events.”
EXPECT SOME PANDEMIC CHANGES TO STICK IN SPORTS MEDIA
- More telecommuting. Tighter travel budgets. More remote productions. Those are some of the changes sports media companies could expect to become permanent when the coronavirus pandemic hits our rearview mirror, ESPN’s Burke Magnus told a Collegiate Sports Associates panel last week. “Is this the moment where some sacred cow budgets or topics can be talked about in real terms,” Magnus asked via a Zoom meeting from his home office. “Maybe nothing changes. But this is a moment to address those kinds of things and see if there's anything to be gained in areas where it would have been sort of unrealistic to consider it or unthinkable to consider it in the past.”
- Magnus pointed to ESPN’s college channels -- SEC Network, ACC Network and Longhorn Network -- as examples of channels where the company has implemented the type of cost-saving measures that he referenced. “We had already started pivoting in that direction as people who are familiar with the conference networks are familiar with,” he said.
- One area where Magnus expects to see a quick rebound: advertising around college sports. “I'm really sensing no long-term pivot in terms of the interests of the truly important or most important advertising and sponsorship companies that are invested in college sports,” Magnus said. “We're all making short term decisions based on very complicated circumstances, which are not great as we sit here today. But do I see any fundamental cracks in the foundation of it? I don't right now, which is good.”
- ESPN and ESPN2 averaged 5.8 million viewers for Episode 5 of "The Last Dance" on Sunday night in the 9:00pm ET window, while Episode 6 at 10:00pm averaged 5.2 million viewers. All six episodes are in the top 10 most-watched sports telecasts since U.S. sports shut down, and the episodes easily rank as ESPN's six best documentary audiences on record.
- Long time CBS PR exec Gil Schwartz, who died suddenly over the weekend at the age of 68, was remembered fondly on social media by some of the reporters he regularly battled. Former Life magazine editor Bill Shapiro: “[He] met me for lunch once in Midtown. I arrived first, sat down. Gil comes in, sees the table, yells, “This is Siberia!” Whereupon the host quickly moves us to a great table.” The Wall Street Journal's Joe Flint: “He was combative when he had to be (goes with the territory) but more often than not was fair and respectful. And he was funny as hell and a character in a business increasingly devoid of them. I'll take Gil over a buttoned up pencil pusher any day of the week.”
- Mark Lazarus, who oversees NBC Sports Group, was put in charge of NBC’s entertainment businesses and its streaming service, Peacock. The news came as part of a reorganization that saw Telemundo’s Cesar Conde take over the NBC News group from former head Andy Lack, who is leaving the network.
- The series finale for IFC's "Brockmire" airs on Wednesday, and the Paley Center put out a mock video congratulating the titular character on bidding farewell to the booth. Among the sports media personalities paying tribute are Bob Costas, Dan Patrick, Tim Kurkjian, Karl Ravech, Michael Kay, Jessica Mendoza and Brian Kenny.
- Some 36% of sports execs said there should be more production of esports content even after play resumes, with another 28% saying that production should continue at the current rate, according to a MarketCast Sports Poll. Twenty-nine percent said there should be less production.
- Showtime has made a habit of getting strong sports and entertainment cameos for “Billions,” such as Kevin Durant, Maria Sharapova, Mark Cuban and Marc Lasry. But for the Season 5 premiere last night, it was WWE’s time to shine, as the “Raw” women’s champion, Becky Lynch, made a cameo to motivate the fictional staff of Axe Capital.
THE GRAND FINALE! PART 4 OF CAA WORLD CONGRESS COMES TO YOU ON MAY 6
- We’ll have interviews with WNBA Commissioner Cathy Engelbert, Fanatics Executive Chair Michael Rubin, NBPA Executive Director Michele Roberts, Activation Blizzard Chief Executive Pete Vlastelica, Sports Medicine Research President Dr. Daniel Eichner and top execs from Learfield IMG College, the NHL, CAA Sports and Luker on Trends.
- There’s also a new time for the finale. Our program starts at 1:45pm ET and ends with a happy hour via Zoom from 4:00-5:00pm. Go to www.WorldCongressOfSports.com to register and gain on-demand access to dozens of interviews and sessions from the previous three World Congress episodes.
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