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NEP Dominates Truck Business

NEP Supershooters became the largest owner of mobile production trucks when it bought 10 trucks and related contracts from National Mobile Television (NMT). For NMT, knocked out of the No. 1 slot, the deal relieves it of debt and allows the company to more easily embrace new business from regional sports networks. NEP, now with 33 production trucks, is the largest fleet in the nation.

“NEP will be the major player now. Everyone in the business will watch to see what it does, since it will affect them,” says Mike Werteen, director of marketing for New Century Productions (NCP), a vendor with three HD and four SD trucks used by CBS, ESPN, Fox, Turner and regional networks. NEP will acquire three HD mobile trucks, three SD trucks, plus mobile units based in Hawaii. An influx of new employees is expected along with the trucks.

The sale, still to be approved by ABC and Fox Sports, sets NEP up to dominate truck deals involving national broadcast- and cable-network sporting events. “This gives us an ABC contract [through 2007] that provides an exclusive arrangement similar to the ones we have with NBC and the Golf Channel,” says NEP CFO Jim Milano. “We also have an opportunity to expand our relationship with Fox [through 2008] for the NFL and NASCAR broadcasts.”

Financial details of the deal were unavailable, but NMT CEO Mark Howith estimates that it’s worth $30 million to $50 million. He says the sale eliminates a lot of debt the company amassed during its expansion in the late 1990s.

Late last year, NMT was looking for additional investors, but the National Hockey League strike gave them pause. “The financial community doesn’t know the sports world,” he says. “The NHL strike made them nervous.”

The deal turns the production of ABC’s Monday Night Football, college football, golf and other sports over to NEP. The company will also handle Fox “B” and “C” National Football League game broadcasts and a contract for HD services with ESPN. (NEP already handles Fox “A” games.)

“The only thing we’re out of is the ABC business,” adds Howith. “CBS is still important to us. ESPN continues as a customer.” NMT will also do work for Fox and plans to aggressively bid on the BCS (Bowl Championship Series) college-football package.

Howith says the regional sports-production business lets NMT do many events in a small geographic area. “In San Francisco, we can work with four teams; the trucks are always working. This is about capital utilization.”

Says NMT President Jerry Gepner, “Nobody denies our ability to build a truck. There are a remarkable number of regional rights-holders that are rapidly moving to HD.” Current NMT clients include CBS Sports, InDemand, New England Sports Network and Cablevision’s Rainbow sports networks in New York, Boston, San Francisco and, soon, Florida. NMT retains a solid collection of contracts, he says: “We want to be positioned so we can be responsive when others become available.”

A New Focus

Gepner is familiar with starting fresh. When Fox Sports added the NFL contract, he joined as VP, field operations and engineering. “It isn’t often you get to start with a blank piece of paper and build a sports network. This is the same thing. We are resetting the direction of the company and will be relatively unencumbered.”

As for the transition from NMT to NEP, Milano promises no disruption of services or facilities for clients. Tying contracts in closely with truck assets may seem odd to those outside the mobile-production community, but it’s the nature of the business. Trucks are never built or bought unless there is a guaranteed business, week in and week out.

Smart Business

The opportunity to add both trucks and contracts with large networks was viewed as a solid investment inside NEP. NMT will retain four HD production trucks, says Howith, adding that the company plans to build five more HD units in 2005. Any ripple effect on the rest of the mobile production community is unknown.

“We’re excited about acquiring the assets and contracts. But there isn’t a whole lot of significance to being the largest,” says Milano. Being big could give NEP more price flexibility, but that has never been related to the number of trucks available, notes Gepner. “You can be a discount provider with one truck or a premium one with 100,” he says. “Pricing has more to do with how you’ll run the business.”

As a competitor, NCP isn’t worried about the future or its price structures. It feels it can price competitively for clients and build trucks to handle the largest events. “And we’ll still be flexible enough,” Werteen says, “to do a one-day show, like college basketball.”