From the upcoming Olympics to a flurry of new sports networks, the multi-billion-dollar sports television industry is as rife with big issues as ever. So B&C brought together three of the top journalists who cover it -- Sports Business Journal's John Ourand, Sports Illustrated's Richard Deitsch and Newsday's Neil Best -- to get us in the game. An edited transcript of their conversation follows.
What is the biggest story in sports TV so far in 2012?
John Ourand: I don't think there has been a huge story this year, like NBC paying billions for the Olympics. The thing I have been focused on is TV Everywhere. For instance, March Madness on Demand wasn't very good execution-wise-people didn't know how to do it. And a lot of people have had problems authenticating the Watch ESPN app. Let's see what happens with the Olympics.
Neil Best: I am focused on, when are we going to reach the breaking point in terms of sports leagues and teams thinking basic cable can expand endlessly without consumers pushing back? How much longer can this go on with all these new networks?
Ourand: I think it can go on for a while. Sports is the only thing really working on live television.
Best: What about the millions of Americans who are not avid sports fans?
Ourand: The majority of the households have at least one avid sports fan, so they are going to get cable.
Richard Deitsch: There really isn't anything else left in this country where you are forced to watch live because you want to be a part of the national conversation. Obviously there are some exceptions. This is where social media is big. You can't be on Twitter or Facebook without seeing the game live. That's why these rights fees are so [big].
Ourand: Sports is literally the only thing keeping the pay cable model together.
Richard, your biggest story so far this year?
Deitsch: Mine hasn't happened yet, and it's the Olympics. How can NBC possibly make money on it? And also, they may have been bullied- is that the right word?-they may have been semi-bullied into making every event live in some form. I'm fascinated by what kind of ratings they will get. And will Olympics fans be satisfied with, one, having to authenticate, and then seeing an event live and then not being able to see it until primetime on NBC? I'm fascinated with how NBC is going to pull off this mega-event in a universe where everyone expects to see everything live.
Ourand: Were they bullied? They had to do this. I am not certain it will hurt ratings. It may help ratings-people may want to see it in a nice package that night.
Deitsch: The younger people I interact with just want to see it live. They don't care about the big Ebersol-ian packaging that night.
If you go on Twitter during Community on NBC, you'd think it was the biggest show on TV. And when Chris Berman is on ESPN, you'd think the whole country hates him. Can Twitter be misleading?
Deitsch: It's interesting, ESPN has become so interested in social media buzz. Their morning lineup on ESPN2 is obsessed by being on Twitter and getting trending topics. There is an attempt by sports networks to get social media buzz, but it is a small audience. So executives do have to be smart, because you can get tricked into thinking how popular these shows are versus just how loud and passionate people are on Twitter.
Best: We also have to be careful ourselves. Mad Men is another great example. You would think everyone in the country watches it. There is no question everybody on Twitter has a little bit of a skewed perception of how important it is.
Ourand: But don't forget ad buyers like that buzz-they like to see that.
Deitsch: One of Twitter's geniuses is they really co-opted the media. They have catered to the media from The New York Times on down. They have gotten the media to become a gigantic megaphone for them.
Are any leagues better than others at social media strategy?
Deitsch: The NBA stands out. They are very active with posting video and alerts. And their players are very into it. Compared to MLB, even though I think baseball's Web stuff is brilliant. But David Stern's genius is he wants to push the game into as many eyeballs as possible.
Best: The NHL has also embraced it. MLB has the most important challenge in attracting young fans. You think they would be the most aggressive. They are letting players tweet during the All-Star Game, though.
Ourand: It's hard for me to say who is doing the best in social media because I think we are still in the period where everyone is just throwing stuff against the wall to see what sticks. All the sports networks certainly are. But I agree the NBA does a nice job. I also think MLS does a nice job.
Given ESPN's sheer breadth, how do you cover them vis-à -vis the other sports divisions? For instance, if I put on 8,000 hours of TV every week, someone is going to say something stupid.
Best: They are so vast, it is unfair to make any generalizations about them. You have to break them down into separate pieces. You have to treat Bob Ley and Skip Bayless as two different things.
Deitsch: You have to take each sub-entity as an individual. ESPN is by far the most dominant player in this space, and they are going to get covered more, and there will be more scrutiny, and that is just the facts of life. Secondly, they are one of the places-and this is good for them-that wants to be journalistically sound. I am glad they do this. They want to be journalists, so I am going to cover them critically under that framework. When, truth be told, I don't expect that same kind of journalistic credibility from Fox Sports. I think they should have it. Perfect example, the Super Bowl in Dallas, when fans were not allowed to get to their seats, Fox basically punted on covering that. I took a big shot at them, but I wasn't really surprised. I am surprised when ESPN doesn't do things right.
Best: The other thing that separates ESPN is their power. When the college conferences realigned, to ESPN's credit, they are part of that process, so that is another level of scrutiny they face. Also, our readers think they have a huge connection with their personalities.
Ourand: I would say if you put Scott Van Pelt in a room in New York with Amar'e Stoudemire, more people would recognize Van Pelt.
Deitsch: I don't know that I agree, but I understand your point. These people are in your homes. Even our editors don't understand the power of these names. Scott Van Pelt is more well known nationally than the second or third starter on the Seattle Mariners.
Ourand: I would say than the biggest star on the Mariners....
Deitsch: Right. Al Michaels is as famous as an NBA All-Star. The people care about these individuals. I think it is undersold in papers around the country.
Then here's the tough question: Why is the sports TV beat dying? There aren't that many of you left.
Deitsch: For reasons beyond the beat itself. I think it's more a newspapers- collapsing problem.
Best: I am living it. I have only spent about 15% of my time on the beat this year, not because my paper doesn't value it, but someone has to cover the Giants game, someone has to help out with the Knicks. There are just more urgent priorities, and our staffs shrink.
Ourand: It makes no sense to me whatsoever why publications don't value this beat. Look at the Dodgers deal: they sold for over $2 billion, and it's all predicated on TV money. Sports TV deals are in the billions, but people jump up and down over digital deals that are worth, like, a million. It makes no sense, and it is so shortsighted.
Deitsch: I don't think the beat is dying. I just think it's morphed into different places, like Deadspin. They have a fulltime ESPN reporter. There are places that see this as a full-time beat. USA Today has ceded a lot of that space. They were the player.
If you were starting a national sports network and you could poach one exec to run it, whom would you take?
Best: The reason I really like [ESPN president] John Skipper is because I get the sense he is a journalist, compared to [ESPN executive chairman and former president] George Bodenheimer. Maybe it's just [Skipper's] charm and Southern accent, but I get the sense his network is in good hands and he's coming from the right place.
Deitsch: Skipper would be a great choice who is incredibly bright and really does care about content. To give you something different, I would go with Tony Petitti [president and CEO, MLB Network] or Sean McManus [president of CBS Sports]. With the MLB Network, from the beginning, Petitti has done his best to try and create a place where editorial freedom exists in a league-owned network. It will never be perfect, but especially with steroids, they have done a very good job. McManus I know cares about news, but the thing I respect about him is I don't think he believes in the â€˜First Takeization' of sports. I think he has done a very good job of letting them be aboveboard. They don't rock the boat, which hurts them a lot because they don't get a lot of publicity, but that's not the worst thing in the world.
Ourand: Skipper and Steve Bornstein [president and CEO, NFL Network] and these guys know how to do it. But I like [Fox Networks president, distribution] Mike Hopkins. I want someone who knows the distribution game, and I think [Hopkins] is more than a capable executive. Also David Berson [executive VP, CBS Sports; president, CBS Sports Network]. If I had a 24-hour TV network, I would want someone who knows how to schedule that network, and [Berson] intuitively knows how to schedule. I can't believe there hasn't been more of a brain drain from ESPN with all these new networks.
What are the biggest stories to watch through the rest of 2012?
Ourand: This fall, you are going to see two Time Warner Cable channels, Fox Sports San Diego and New Orleans, the Pac-12 Networks, the Longhorn Network. Are they all going to launch, or will the cable and satellite industries finally say, here is somewhere we can fight back? Time Warner and the NFL is the notable exception. In every other case, the cable companies have rolled over.
Best: It's the Olympics, how will the coverage work out.
Deitsch: NFL ratings: can they keep climbing? Last year, we came off a lockout, but this year there are a lot of great stories, like Peyton Manning's new team and Tim Tebow to the Jets. It will be interesting.
Will baseball get a new TV partners?
Ourand: I think there's a good chance there is a new package. I know NBC wants it and MLB is receptive.
What about NASCAR, will they get a new partner?
Ourand: There are not a lot of properties that get a 4 rating every single weekend, but it's the wrong 4 rating, not the young men that advertisers like. So we'll see who just wants that 4 rating.
Have there been any really good moves by the networks this year that stick out?
Deitsch: I think ESPN was smart to re-up with Scott Van Pelt. You lost Michelle Beadle, and ESPN has lost people the last couple of years, and when you keep someone like Van Pelt, for ESPN it sent a very smart message that they will keep and reward people. I don't know if Beadle will be great at NBC, but it does send a message when she leaves.
Ourand: I was concerned with Turner's plan to charge for March Madness On demand. In hindsight, I think that was a great move.
Best: This is obscure, but the NFL Network went on a hiring binge with a lot of print reporters. Of course, I am biased, but I like the value being put on print reporters.
We know going in, NBC is going to take a bath on the Olympics. So do you give them a pass on profitability? How do you cover it from a business standpoint going in?
Ourand: For a reporter, it's so difficult to figure out whether they are making money, unless they come out and say it. For the Olympics, for NBC as a company, it is so much more than just ad sales. So it's tough not to give them a pass in a way.
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