Marketing

Game On!

11/30/2009 2:00 PM Eastern

It's hard to turn on a TV these days and not see a sporting event. Between contests on broadcast networks, ESPN, ESPN2, ESPN Deportes, ESPN News, Versus, Fuel and regional sports networks — not to mention several outdoors channels — sports seem to dominate the spectrum.

Some networks, such as ESPN Classic, even show repeats of classic games — where the audience already knows the outcome.

Multichannel News cover story November 26, 2009Now, thanks to the rise of the single-sport channel, the around-the-clock sports assault has reached a new high. For the first time, the four major leagues each have a network of their own, and there are networks devoted solely to the sports of tennis and golf. With so much competition, each of these niche-within-a-niche networks must hone their strategies for both dealing with distribution and wooing audiences. The league networks must also maintain a difficult balancing act since they are competing with other networks that are also its partners — for instance, Major League Baseball and the National Football League both want their networks to succeed, but not at the expense of the sports' coverage on ESPN.

Each of these players is taking a different approach. Some prefer enlisting the operators on their side as investors and advisers, while others opt for a head-on challenge. Other services are trying to provide insider knowledge, while some shift their attention more toward entertainment.

Little wonder why so many shows are devoted to sports, but is there room for so many? Most sports attract loyal viewers, mostly men in crucial demographics, and have the potential to draw big TV crowds. Live professional sports programming, especially in high definition, is the ultimate penetration driver, said Tennis Channel CEO Ken Solomon.

“It's the one thing in television that continues to defy ratings gravity,” he said.

MLB Network, the latest entrant among the bunch, took a distinctive path to gaining distribution, selling minority ownership stakes to some of the biggest players in the game: Comcast, Time Warner Cable, Cox Communications and DirecTV. Thanks to this tactic, the big leagues' network launched last January in a record 53 million homes — roughly half the TV universe. (The network also tied carriage to its out-of-market “MLB Extra Innings” package.)

“We feel really good about where we are,” said network president Tony Petitti, who credits MLB's executive vice president of business, Tim Brosnan, with the plan.

That's because in one year, MLB caught up to NFL Network, also in 53 million homes, even though the gridiron channel has been around since 2003. In recent years, NFL Network grew so frustrated by its stalled efforts to gain access to desired digital tiers that it held discussions about merging with ESPN Classic, which has the distribution and clout with operators that the NFL covets.

But that plan never moved forward and this year, the network took what chief operating officer Kim Williams calls “a huge step forward” by finally reaching a deal with Comcast.

Still, the battle over tiers continues with such major carriers as TWC and Cablevision Systems. “It's frustrating,” Williams said. “We hear the outcry from fans and want the product to be seen. We need to be smart about our deal, though we understand there are two sides at the table.”

TENNIS FIGHT

Tennis Channel has also proven willing to confront the major players, even when it holds back distribution. The network completed its Grand Slam this past summer by debuting coverage of the U.S. Open.

“This is like a Missouri business — it's about 'show me' — and the Open gave us prestige that is very important and record ratings,” Solomon said.

Since Tennis, which is typically on a pay tier, doubled its existing distribution to about 50 million by offering two-week freebies during the tournament, it was able to get Nielsen metered-market ratings.

“Now we have the strength of that story to show,” Solomon added. “We've doubled what we did in ad sales last year.”

But that success was overshadowed by a heated distribution battle with Cablevision, which wanted to put the network on a more-expensive sports tier instead of a much broader digital tier. For Solomon, the key is enabling as many viewers as possible to get the network without paying extra.

“We are charging operators less than 15 cents, but they want to put us on a tier where they can charge viewers $5.95 a month,” he said.

Still, the fight with Cablevision had a silver lining — media attention, and perhaps brand recognition, for the network.

“That was our goal and was one of the reasons we wanted the U.S. Open,” said Solomon, who believes that reaching 35 million homes is “within our sights” in the next 12 to 18 months. “You can't get forward momentum till you have that fight. We wanted as much press as possible.”

(After the Open, Tennis Channel allowed Cablevision to carry the network through the National Cable Television Cooperative, though it still hopes to change the terms of the agreement.)

The National Basketball Association, by contrast, decided to go for easy scores through cooperation — by becoming more flexible on price structure in the past year, the network has earned its spot on broadly distributed tiers. NBA TV more than tripled its carriage in the last year, from 12 million to 45 million homes, via a flurry of deals with Comcast, Cox, DirecTV, Verizon Communications, TWC, Cablevision and Dish Network.

(The Golf Channel, which has been around since 1995, has fewer concerns since these days it is already in 82 million homes; it saw 9% growth from April 2008 to April 2009.)

The National Hockey League, of course, has a much more limited appeal in the United States than the other major sports. It has scuffled along without rights fees from its broadcast partner, NBC (they split ad revenue after NBC's costs) and its cable partner is Versus, which obviously lacks the clout and the ratings of ESPN. (Versus is owned by Comcast, which also is a partner with the league in the NHL Network.)

The NHL Network, which did not respond to interview requests for this story, reportedly started the year in about 12 million homes. It had hoped to reach 30 million by the time the 2009-10 season started, but now hopes to get there by season's end.

While all these networks have poured energy and resources into negotiations over distribution, they know that the programming — live events, studio programs, series, or even, in the case of NFL Network's Red Zone, a new channel — is what generates demand from viewers and interest from the operators.

The leagues, at the moment, are bound by contracts with other networks that limit what season games they can carry. NFL Network televises eight regular season games; NBA TV shows four games per week but doesn't have exclusive rights and can be blacked out locally. MLB has Thursday Night Baseball, 26 weeks of games, but with the same setup as the NBA (nonexclusive and subject to local blackout).

NBA HANDOFF

Each network is relying on a slightly different playbook. Just as MLB teamed with operators to ensure distribution, the NBA decided in late 2007 to turn control of its network over to a program provider, making a deal with Turner Sports. It relaunched the network a year ago.

“We went out a year early in terms of investing and upgrading the content because it helped in negotiations to show people what they would get,” said NBA TV senior vice president and general manager Bryan Perez.

Turner built a new set and imported TNT on-air talent such as Ernie Johnson and Kenny Smith, as well as off-camera staff including Turner Sports marketing and promotion staffers who've handled the NBA for 26 years.

“We're not competing with ourselves — if more people are watching basketball, it is good for everybody,” Perez said, adding that NBA TV is now maximizing multiplatform content concepts.

At last year's All-Star Game, for example, the network gave personal pocket cameras to players and celebrities so they could provide fly-on-the-wall coverage for fans. There was minimal production value, with an emphasis on immediacy, so the product was used online. But it was such a hit that Ahmad Rashad is hosting a Wednesday show on NBA TV this season using the same concept, though improving the production values, adding graphics and fleshing out it with interviews via Skype and in-studio segments.

The network also will have a new interactive show on NBA.com on Tuesdays — The Jump, featuring Kyle Montgomery and Dennis Scott — allowing fans to deliver their own commentary.

THE CUTTER

MLB Network offers some high-profile interviews and retrospectives with shows such as Studio 42 With Bob Costas, but Petitti is emphasizing the inexpensive live studio programming, which runs about eight hours a day during the season and offers insights into the game.

During a postseason segment on the cutter (the pitch made famous by New York Yankees closer Mariano Rivera), for instance, MLB Network analyst Al Leiter — who threw a lively cutter during his major-league career — pitched to the camera to illustrate the ball's movement.

“It was one of the best demos we had all year, you could really see the ball coming out of Al's hand,” Petitti said, adding that he expects to use not only analysts like Leiter and Barry Larkin, but to get current stars to come in to the studio in the off-season.

Williams said NFL Network has found the same passion for the inside scoop among football fans. Playbook was originally on twice a week, with a focus on upcoming games, but viewers wanted more insights on the week gone by. Thus, the network added two more episodes of the series.

“It makes people smart about the game,” she said.

That effort continues in the off-season too. “The [Scouting] Combine [in which the league's teams evaluate incoming collegiate talent ahead of the NFL Draft] is pretty critical for the NFL, but it's closed off to the public,” Williams said. “We said, 'You can't show 40-yard dashes, it's bad television.' But people can't stop watching and now we can use technology to do an overlay to show two runners and their different styles.”

Additionally, Williams said, the Olympics-style storytelling they use to introduce young players to NFL fans at the Combine gives the viewers “vested interest in players that goes beyond the score on the field. This storytelling element was not something we had exploited before.”

While the network knows the value of innovation, it's careful about which new products it launches, and when. “We find things that are complementary to our network, and we want to be mindful of our existing partners,” Williams said.

The league also launched a new pay channel this year, NFL RedZone, which jumps live to any game in which a team is nearing a score. The channel “keeps fans up-to-date in real time, switching from game to game with live look-ins, highlights and a chance to see every important play.”

When the NFL Network first launched in 2003 and started carrying games in 2006, there was concern it would cannablize the ratings of its TV partners, which in addition to ESPN include CBS, Fox and NBC. “There was a hypothesis that the scarcity of product was good, but the audience can't get enough.”

For Tennis Channel and the Golf Channel, the coverage is about a sport, rather than a league, and participatory sports at that.

Tennis Channel rounds out its court action with lifestyle, fitness and travel programs. This year, Tennis added four minute-long daily news updates. Eventually, Solomon said, “the next logical step is a full-time newscast.”

Golf Channel, which airs live golf nearly every weekend, is also beefing up its journalistic credentials with documentaries — including Uneven Fairways, about black golf pioneers — and the newsmagazine show Golf in America, which counts author John Feinstein and NBC Sports reporter Jim Gray among its correspondents.

Tom Stathakes, Golf's senior vice president or programming, production and operations, believes that the network's continued growth requires more diverse programming. To that end, he is adding entertainment-driven shows to its lineup, such as The Haney Project (in which a golf pro takes on celebrities such as basketballer Charles Barkley and TV comedian Ray Romano as pupils) and reality show Being John Daly.

“There are too many games on television — it's games, games, games,” Stathakes said. “So how do you stand out?”