NBC's Big Plan for Arena Football

Two years ago, NBC spent $30 million to $40 million getting viewers revved up for the XFL, the football league created out of whole cloth in about 18 months by the World Wrestling Federation in a partnership with the network.

The first week, sampling was huge: NFL-sized ratings in all the male demographics.

In retrospect, though, the promotion worked a little too well, says John Miller, co-president of The NBC Agency, as he and Vince Manze, the other co-president of NBC's ad/promotion unit, ponder how to draw a crowd for the network's latest stab at developing a TV sports franchise: the Arena Football League (AFL).

The big lesson learned from the XFL experience, says Miller, is that there's a limit to how much a program franchise can be hyped. "We sort of over-promised" what the XFL was all about, he concedes.

Manze agrees. "With the XFL, we didn't really know what the product was and our expectation was to fill prime time." With Arena Football, he adds, "we have a legitimate product with realistic expectations."

The biggest rap against the XFL was the inept play. Critics and many fans didn't view it as real football.

But the AFL, Miller and Manze argue, has been legitimized by its 17-year history and already has a devoted following.

And, whereas the XFL took the National Football League head-on, suggesting that its "smash-mouth" style was the antithesis of the NFL's namby-pamby style, the NFL embraces Arena football.

Many owners have teams in both leagues, and some top NFL players started there—St. Louis Rams quarterback Kurt Warner to name one.

Ad buyers say NBC has the timing right because there aren't a lot of other male-driven sports franchises on the broadcast networks in late winter and early spring.

"It should do fine," says Tom Decabia, executive vice president, PHD USA. "It's never going to do NFL-sized ratings, but it will deliver an audience that advertisers want to be around, and it's a good product."

NBC Sports executives say that's just the point: The AFL will give advertisers that can't afford the NFL or the NBA a chance to buy network TV.

And, like the NBC promotion team, sports executives are downplaying expectations. The goal, they say, is to develop a long-term profitable franchise.

Ad buyers say the average cost of a spot in the AFL is $25,000 and the network is selling single units and an array of packages.

NBC has already signed a handful of season-long (22 weeks) sponsors that have purchased packages priced, according to sources, in the low seven figures each. Those sponsors include security-systems company ADT, carmaker Hyundai/KIA, Charles Schwab, GEICO and Wendy's. Another six to eight sponsors are expected to be disclosed shortly.

East Coast-based Jon Miller, senior vice president, programming, NBC Sports (not to be confused with and no relation to West Coast-based NBC Agency Co-President John Miller) confirms the sponsors are on board but declined to talk about pricing. "No single package is the same," he says. And while the sponsors so far don't have category exclusivity, they do get more than just spots: "They're getting billboards, screen, clock, and scoreboard signage, tickets and hospitality, all kinds of enhancements."

Whether there's a profit in year one remains to be seen. So far, sales are on target with the business plan, Jon Miller says. "We're encouraged, but the goal isn't to achieve profitability in year one but to achieve profitability in year six and beyond. We don't need a big rating to make this work."

Former Denver Broncos quarterback John Elway has an ownership stake in the Arena League's Denver franchise. Not surprisingly, both Elway and Warner appear prominently in NBC's on-air promos for its AFL coverage, which will air Sunday afternoons starting Feb. 2, a week after the Super Bowl.

The network is looking for a ratings performance somewhere between a 1 and a 2, says John Miller.

That's a far cry from the 4.5 rating that advertisers were guaranteed for NBC's XFL coverage. By the end of its first and only season two years ago, the XFL was doing about a 2 rating and ended up costing the WWF and NBC about $100 million.

But the AFL might be a better business because the economics of the initial two-year Arena League deal are much smaller. NBC isn't paying a rights fee to the league, for one thing, and instead will share ad revenue sold in the games.

It's committing about $10 million to promotion, mostly on its own air with some radio-advertising support as the AFL season approaches.

NBC has been airing spots for Arena Football on DirecTV's NFL package since September and more recently in its own weekend sports programming and male-driven prime time shows, such as Fear Factor. Late-night spots are also planned.

Promos so far feature Elway and Warner explaining differences between regular football and Arena Football; Elway is seen chain-sawing a miniature field in two to demonstrate that Arena fields are half as long. It's mostly a passing game with "scoring so high you'll need oxygen," a voiceover intones.

A second phase of the promotion campaign starts during the NFL playoffs, spoofing the style of United Way campaigns. It addresses "Post Super Bowl Stress Disorder (PSSD), "or pissed," as the voiceover explains—that is, if the Standards and Practices department lets the language go through.

The cure, of course, is Arena football. Among the images in the video is a lone tailgater in an otherwise empty stadium parking lot stirring the ashes in a barbecue grill. Another shows a man, dazed and staring at a TV without a game to watch, with his family off to the side horrified at what he might do next.

The promos are all in good fun as they try to teach viewers a little about the game or simply make people aware of it. And there's quite a huge upside: Research shows Arena Football with about 35% recognition factor, says John Miller.