What Hockey Needs, What Soccer is Getting, and Why Sports Cable Ratings Thrive – ESPN

Monday Night Football on ESPN is up over 20% from last season. College football on ESPN had its best year in over a decade, including its most watched game since the 1990’s. The Heisman Trophy presentation reached new high water marks. Last season’s NBA playoffs finished up. During football season ESPN is consistently the highest rated cable network each week, often by substantial margins.

Yes, sports in general and football in particular, are carrying TV ratings across the board, but much of ESPN’s success should be attributed to the marketing machine it’s created. A daily listener to their morning radio show, a few weeks ago I realized all they day on Monday morning is review Sunday’s games and hype Monday nights game, then on Tuesday they spend most of the show recapping Monday night’s game, bringing in a cavalcade of guests. This is not just a recap, its four hours of national radio smacking you in the face. I noticed it because I got sick of listening to it. Then when you turn on ESPN they are live from the sight of the game, it leads Sportscenter for a full 12-hour cycle at a minimum. Go online, same thing. As a more well-rounded sports fan, I was searching for a crumb of baseball coverage from the winter meetings, but nothing – all football, all the time. Even when the MNF game stinks, they still smack you upside the head with it.

Same thing with the Heisman. Cover stories all week, interviews, enough promotions so that you have the time, date, and tag line memorized. However, given how big the NFL is, maybe this would happen anyway, so its last night that really magnifies what ESPN can do. Broadcaster of roughly 90% of the college bowl games, last night ESPN had the less than illustrious Las Vegas Bowl, pitting BYU and Oregon State in what on paper was a decent matchup, but turned out to be a blowout. They moved the top two teams in college basketball to ESPN2 to put the game on the mother ship, then led Sportscenter with Las Vegas Bowl highlights and full coverage from the sight. The Las Vegas Bowl, a 24-point blowout, the lead on a night with NBA action, almost the entire Top 10 in college basketball on the court, and a significant MLB trade? When you have the control to dictate what people watch like they do, its amazing what is possible. If that game was on Versus, you would get a 30-60 second highlight no earlier than two segments into Sportscenter.

Don’t criticize ESPN for it, they are maximizing value of their assets, and the ratings show that people don’t mind. It shows that any sports property not bigger than ESPN, needs to partner with ESPN, notably hockey. ESPN is planning the white glove treatment for World Cup soccer in 2010, and its almost a guarantee that the ratings will set new records for soccer in the US. In the midst of their coverage, its also a guarantee that the NHL playoffs will get buried as ESPN goes double-barreled with World Cup and NBA playoffs.

It’s not the first time I’ve brought up this subject, but I think its worth noting now as ESPN’s tailored programming and the resulting ratings reached new heights this fall, at a time where hockey is more lost in the media landscape than ever before. They need to get on ESPN, they need to get on now, and they need to let ESPN show them how to market superstar athletes to the public.


College Athletics Pipedream: Revenue Sharing

In the past month two D1-AA football programs from the Colonial Athletic Conference closed operations, citing costs – Hofstra and Northeastern. Both schools have a long gridiron history, and in Hofstra’s case, at least three fairly successful NFL players in the past 15 years. Within the same few weeks, Notre Dame paid more to fire its coach than the $4.5 million Hofstra says it costs to run the football program annually. The Irish also hired a coach, UConn extended basketball Coach Jim Calhoun’s contract to an annual salary above that $4.5m, and countless bowl games will make payouts to each school more than enough to cover those same expenses. Something is truly wrong with this picture.

It’s no secret that escalating costs related to facilities, coaches salaries, and general operations for each team combined with a growing chasm in revenue have created a well-defined class system in college athletics. The Knight Commission continues to study the topic and publish insightful research and editorials, but the problem is not going away. The impact on non-revenue sports has been seen or the past decade or so. Now the epidemic is spreading to major sports at low revenue schools. The next step is mid-major programs.

Hmm, increasing disparity in wealth leading to an increasing disparity in performance, and then feeding itself into a vicious, destructive cycle. Is this starting to sound familiar? Professional sports ring a bell, notably the uncapped world of baseball. One significant difference, colleges are supposedly not for profit organizations, and the goal of college athletics is to promote competition and academics, not improve the bottom line, yet the exact opposite is taking place.

I’m not naïve enough to think universities or athletic departments view themselves as not for profit, but if the NCAA and the conferences truly have a mission to serve student athletes they will create a more equitable distribution of finances. They mandate that athletes cannot benefit from money the school earns, similarly the school should only benefit to a certain extent from the athletes. The NCAA should centrally pool a portion of television contracts, sponsorships, bowl payouts, and other non-ticket revenue sources and reallocate to help fund the Hofstra’s of the world. Maybe small schools don’t receive the full cost of operations as a “stimulus package” and perhaps we have reached a time when students have to pay an annual fee to play, similar to youth athletics, rather than receive free tuition.

Big schools and big conferences would clearly never agree to this because they correctly argue they generate the money. However, if the NCAA truly supports its mission it will start to force its hand. Sponsorships and donations should go toward NCAA sports or NCAA football, not to Ohio State, the Big East, or the Orange Bowl winner. The NCAA should also seek funding from its professional counterparts, the NFL, NBA, and various Olympic governing bodies. These leagues already support youth initiatives, so it’s not a significant leap to seek contributions to keep small programs alive.

If the NCAA deincentivizes big schools by taking away the potential windfall paydays that come from winning, it may implicitly put a cap on coaches salaries and absurd capital expenditures to add more luxury suites every year. In essence, it may help make college sports continue to look like college sports, rather than a younger version of the professionals.

ESPN Should Apply Mid-Major B-Ball Approach to Football

Spurred by increased media coverage, some talent dilution at top programs from players leaving school, and a run of NCAA tournament upsets mid-major hype hit new levels in college basketball the past decade. It led to an increased national platform, more money, improved recruiting, and overall, a more level playing field with the big boys. Mid-majors will never be on equal standing with BCS conferences, but we have reached the point where it’s not unheard of for mid-majors to get 1, 2, or 3 seeds in the tournament, and never mind surprise, its sometimes expected to see them knock of middle tier teams from big conferences.

These leagues fought an uphill battle and come tournament time always faced with defending what amounts to an easier schedule relative to big conference teams. Never one to miss a made-for-TV opportunity during a lull in the annual sports schedule, in stepped ESPN earlier this decade with Bracket Buster weekend. The premise – match up the best mid-majors across the country to help them boost their profile with a strong non-conference game. ESPN clears out the schedule and showcases these games the entire weekend, brands them, posts attention on the website, dedicates the studio and road show to these games, and gives it the 360-degree ESPN white-glove treatment. It guarantees that as a group the mid-majors get an RPI boost to combat a weak conference schedule and a bunch of them get wins.

College football needs this same event now. Mid-majors have followed a similar trajectory the past five years or so, a few teams paving the way into national prominence, not only breaking through to major but winning. Critics continue to point at the weak schedule these teams play and the current BCS system is biased against these teams playing for the national championship and against having multiple non-BCS teams play in major bowls.

ESPN should pick a weekend around this time of year, preceding the conference championship games, and call it BCS Buster. Schedule 3-5 neutral sites (or at least pick the sites in advance of the season) in different regions and create match-ups among the top non-BCS teams. If only TCU or Boise legitimately has a chance, let them play each other to help the winner get a better shot at a top two spot. Besides the wins and losses, it raises the profile of the leagues and adds legitimacy to both teams. If ESPN applies its hype machine – Gameday crew, primetime audience, top story on Sportscenter, commercials and teasers on radio and TV all week, web integration, the whole nine yards, Boise would not need to hire a PR firm. If it’s better for the two best not to play, the likes of Houston, BYU, and Utah still create a formidable lineup. Outside of the primary matchup, it gives each team a chance to improve its bowl standing, helps recruiting, and starts to create momentum for the following season.

Clearly, the college basketball and football postseasons are two completely different animals, and the nature of scheduling a football differs from a basketball game. That said, the key point here is that football is at the point they need to apply this concept and who better than ESPN to make it happen. I can’t tolerate too many more Indiana-Iowa, Florida-Mississippi State Saturday doubleheaders now that baseball is over.

Versus Needs Big Football Splash

If any doubts remained, football’s booming start on television leaves no doubt that it is arguably the most dominant television franchise. The NFL was up across the board during its first week, even more telling it’s meaningless preseason games ranked near the top of the weekly primetime ratings. The buck doesn’t stop with the NFL though, college football has been on fire as well. Last week’s OSU-USC game was the most watched ever on ESPN (including bowl games), and this week’s UT-Florida game was one of the best on CBS in recent years. Notre Dame has posted solid ratings, as did ESPN’s other big games.

While the NFL’s TV deals are locked up and game packages static for now, college football is not – and it can have a significant impact for a network. We’ve spoke about the upcoming contract negotiations for the ACC, Pac-10, and Big 12. If Versus wants to become a significant player in sports television, it needs to make a big push on one or more of those properties for exclusive basketball and football coverage. Hockey is not and will never be a big enough television property to carry a network. Tour de France and MMA have boosted Versus, but the ratings and revenue will never be mistaken for a Florida State-Miami football game or UNC and Duke basketball games.

Versus tried to make a splash bidding on the NFL Thursday night package, losing out to NFL Network thanks to some extenuating circumstances. That made it clear they want to be a player. More importantly, with deep-pocketed Comcast running the show, Versus has the money it would take to lock up these rights. If Versus can partner with two of these conferences its subscriber fees immediately become more valuable, its distribution would reach the next level, and Ad Sales would receive a jolt.

The conferences also have a lot at stake, mainly they need revenues to match the SEC and Big 10 in order to compete, and they need the marketing machine that ESPN provides its properties. Without other sports to steal the spotlight (i.e. MLB, NBA, NFL, golf, tennis, etc.), Versus can put a conference like the Pac-10 front and center on a national stage, providing the exposure new commissioner Larry Scott seeks.

Down the road, if the plan succeeds Versus would position itself to make serious runs at the NBA, MLB, and maybe even NFL in the future. At some point, though, if Versus wants to be a serious player in ESPN’s world, Comcast needs to push the chips to the middle and go for it. The NHL and bike racing is hardly coveted sports programming. Big college football and basketball – Top 25 games and historically powerhouse schools can move the needle. Add a conference tournament, some bowl games, and suddenly the 1-2 ratings the NHL gets for playoff games move to 3-4 ratings for big college games.

Ancillary to television, additional content and presumably some sports personalities, would make the web property more valuable (though not a hard task given the lack of web presence the network currently has). Destination programming would also make the network more valuable in Comcast’s TV Everywhere push and network of online TV content, providing synergy value across the company. College sports programming also opens the door for content licensing in local markets – another revenue stream to cover programming costs.

It carries risk, but the ratings show football is about as steadfast as you can get with programming and college fans have shown they will find their teams on television. College can take the network to the next echelon, and possibly help get to the tipping point of national prominence where it can get better channel placement and better affiliate deals.

Create the College Football MLB Stadium Tour

The NHL crafted a regular season event with the Winter Classic, MLB and the NBA have All-Star games, the NFL and MLB have taken the show on the road to play overseas, college football has an opportunity to ratchet things up in the regular season that has started to take form.

Grant it college football has fewer issues selling regular season tickets than do teams in most other sports due to the much shorter season (less supply), general football interest, and passion for school spirit. However, new revenue opportunities always exist. I propose the NCAA consider an MLB Stadium tour. Two possibilities – select a weekend and host a game in each region at a major MLB park, or make it a season-long entrenchment with one game played each weekend in an MLB Park around the country. It could be one game per conference, or one game per region between two non-conference rivals, or geographic rivals.

Notre Dame signing to play at Yankee Stadium is the start. Fenway Park for a BC rivalry game, Dodger Stadium for USC or UCLA, the new outdoor Minnesota Stadium for one of those funny trophies Minnesota plays for against Michigan or Wisconsin. Yes, less capacity could mean less ticket revenue, but if prices accordingly it could even out. The conferences (as an alliance, similar to the BCS) could sell the rights to the Stadium Tour independent of other TV contracts to bolster media revenue, they could sell a sponsorship for the event and come up with a number of creative, integrative activations in each market. For the NCAA and the schools at large, it’s a brand extension opportunity into the heart of the biggest media markets, some of which are dominated by professional teams and lack a strong college presence. Despite its wild popularity and success, without a strong hold in all of the Top 10 media markets, the NCAA still has room to grow. Besides sponsorship and TV money, this initiative could boost merchandise sales for schools, elevate key TV ratings during bowl season, which have stumbled slightly in recent years (possibly due to the BCS), and in general make the sport more valuable.

Something consider at least consider.

Essence of SEC New Media Policy What Content Owners Need

The SEC partnered with XOS Technologies last month to form the SEC Digital Network, and the conference didn’t execute the deal for charity purposes – they intend to generate revenue, potentially lots of it. Put aside the mega 15-year television rights packages with ESPN and CBS Sports, the SEC, as many major college conferences do, have many hours of valuable content that never make it to air on major networks, plus they retain digital rights to almost all of the content that involves any of the schools.

At a high-level, the conference cracked down on the amount of digital content media outlets have access to and what they can do with it. The goal appears to limit non-exclusive independent media coverage (i.e. bloggers) and to control the legal use of its content, akin to how MLBAM manages MLB content. Did we mention that MLBAM is by far the most successful digital outlet in sports? No coincidence. Media outlets can complain all they want, instead they should takes notes on how to control content, make it valuable, and earn revenue from it.

Instead of complaining, media organizations should look to partner with the SEC Digital Network. The SEC has essentially created a market for its content by limiting the supply, wiping the slate clean for competition, and understanding the demand. Next, the conference can carve the content up in numerous different ways – by sport, by type of content (highlights, press conferences, player interviews, coaches shows, etc.) and auction access to it, for lack of a better word. Make the media outlets pay to gain access to it, perhaps different access for local (to each school) and national media, but the key is to issue fewer licenses than exist media outlets. Basic economics, limit the supply to make it more valuable. This would monetize the content up front, providing what amounts to a monopoly rent to the conference since fans of each school demand the content and no alternatives exist. Can you replace Florida Gator highlights with anything else in Gainesville, or replace Alabama highlights with another team or conference? Not unless you want riots.

Now the content license holders – newspapers, local news, national magazines, whoever it may be – have the opportunity to charge subscriptions, package the content in any way they want, be innovative, and run a media business. Fans will have no grounds to complain. If they want access bad enough, they will the pay the price, if not then they will be satisfied with the national linear television coverage.

As for bloggers, of which I am one and am generally an advocate for, nothing changes. You can bid for the exclusive license and make it a real business that competes with newspapers and TV, or you can pay the subscription fees and write second hand recounts, as most currently do. Everyone can still post opinions. However, the limited supply of professional content will further differentiate what’s true journalism and what’s citizen journalism.

This scenario includes many hypothetical scenarios, however its an example of how content owners can monetize content. Implementing paid online content using major college sports, where fanatical demand exists, is an easier place to start than local news or Page 6 gossip. Another step in the process, left for another discussion, is how the SEC would crackdown on illegal use of video and photos, and where they draw the line between UGC and illegal use. The SEC is on to something, now I want to see them carry it through into revenue.

Business of Yankee Stadium: College Football Good, Open-Air Bad

The new ballpark in the Bronx will rekindle one lost tradition from the old Stadium, when it hosts a college football game in 2010, the first at Yankee Stadium in what will be 23 years. Army-Notre Dame will carry the flag, not exactly a 1 vs. 2 match-up, but two teams steeped in tradition with strong national followings and a link to the Northeast.

The game, the matchup, the setting – this deal just feels right. Army subsequently announced matchups for 2011-2013, making it a 4-year annual game deal. For those who go back a few years, it’s impossible to believe Yankee Stadium has not hosted college football since 1987. Given the tradition, the draw that New York and Yankee Stadium bring, and the simple visual of a packed Yankee Stadium on a crisp November day, its even harder to believe.

From a business perspective, it appears part of a bigger plan to make Yankee Stadium an all-purpose facility that monetizes its assets as often as possible. The initial allure of a major college game in the New York area, the venue, and two teams with strong local ties that travel well, should assure a sell out, if not very close. Depending on the deal, the Yanks could reap a few million dollars through tickets/rental fee, food and beverage, parking, and other ancillary services.

Talk of a bowl game is circulating, which would make sense for college football. The sport could use a foothold in the country’s biggest market to help grow its popularity, and boost interest in some of the local teams. And don’t think the Yankees would settle for one of those 7th place mid December bowl games. Either way, Yankee Stadium and NYC have the power to tip a mediocre bowl game into a sell-out. Fans will want to travel, locals will want to catch a game viewed more as an exclusive event given its non-recurring nature. Besides the few million in game day revenue the Yankees would reap, they could extend their tentacles into travel packages and other ancillary activities to grow the pot.

Beyond college football, where it can easily become the neutral site hub in the Northeast for big games within the next 5-10 years if it chooses, hockey is on the radar, and I can’t imagine major boxing events and concerts as far behind. If you look at the history of Yankee Stadium it hosted historical events in each of these genres, with a new state of the art facility it again becomes a destination. Given the expenses the Yanks need to recoup, expect them to slowly dip their toes in every possible revenue stream.

Speaking of costs, the Yankees should have chopped a few of the excess amenities that helped run the bill up way over $1B, and used a few hundred million on a retractable roof. Though I have not run the numbers, I’d be interested in studying how much revenue the team loses when it has to delay games for 1-2 hours and play in front of half empty or a completely empty stadium. No food and beverage revenue, less parking as many who now know the Yanks ways decide to wait it out elsewhere, and typically a free ticket in the future. All lost revenue. While it sounds small on the surface, project it out for the season, then project the season out for 10-15 years, and suddenly the number becomes more significant. Now think of the other revenue opportunities a roof creates – indoor fan fests, indoor basketball games, college basketball tournament, major business or political conferences, year-round concerts. Start projecting potential revenue for all these events, plus the revenue not lost from rain outs and rain delays, now magnified with an in house food and beverage opportunity. An interesting study, but a roof may have paid for itself over time. And, seriously, how much revenue does the cushioned seat in Left CF add.