Changing the Game
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TERENCE SMITH: With the nation’s couch potatoes settling into another season of pro football, sports on television are doing a little scrambling of their own.
Money, big money, is changing the face of sports on television and in some cases, the sports themselves. The traditional stick-and-ball sports, such as baseball and basketball, have migrated to cable, and are being challenged by newer or cheaper alternatives.
SEAN McMANUS, President of CBS Sports: We have a lot of golf, we have NFL football, we have college football, we have some tennis, and a lot of college basketball. Those sports work well for CBS from a financial and a programming standpoint; baseball didn’t, hockey didn’t, the NBA didn’t.
TERENCE SMITH: Sean McManus is president of CBS Sports. He expects only the major events of some sports will remain on free, over-the-air television.
SEAN McMANUS: The Super Bowl, the World Series, the NBA Finals, the Kentucky Derby, the Final Four, I think those will stay on network television.
You’ve got to have either a cable hook-up or a satellite dish, or you’re going to miss a lot of sports action. That’s just a fact of life.
TERENCE SMITH: The impact of all this is being felt by fans, team owners and players, who depend on ever-bigger television contracts and escalating ticket prices to finance even larger salaries.
GEORGE BODENHEIMER, President of ABC Sports/ESPN: I think there is pressure on the so-called “traditional” sports .
TERENCE SMITH: George Bodenheimer is president of ESPN, the sports network, and ABC Sports.
While he sees no limit to the American appetite for all kinds of sports, the audience for any one sport may decline. And that could diminish what television and its advertisers are willing to pay for it.
GEORGE BODENHEIMER, ABC Sports/ESPN: I think that there’s enough pressure on the market where fees will be flat, to potentially down.
TERENCE SMITH: Give me an example here in the United States.
GEORGE BODENHEIMER: Well, I don’t care to get into too many specifics because they are my business partners, but there are deals that are being cut now, with less, you know, requiring less revenue to purchase that product than had been in the previous contract. It is happening.
TERENCE SMITH: Networks are increasingly pursuing sports deals with less-expensive contracts, fewer expensive players, and more stable labor relations. Auto racing, a sport that barely existed on network television a decade ago, is now all over the tube.
Advertisers have noticed. Nextel, the wireless communications company, just signed one of the biggest single sports advertising contracts ever with NASCAR.
Nextel marketing senior vice president Mark Schweitzer, one of the men who cut the deal, liked the quick-moving sport, with its close-up cameras and once-a-week format that focuses the action. He says it offered benefits that sports like baseball and basketball, with more than 100 games a year, could not.
MARK SCHWEITZER, NEXTEL: You know, the star catcher isn’t going to be in the second game of a double header. You can go to an NBA game, and if it’s the fourth game in five nights, and if it’s not a meaningful contest, you know, the star players are going to be resting.
In NASCAR, every race is meaningful; every driver participates every week.
TERENCE SMITH: With the sponsors names emblazoned on the drivers, the road crews, and the cars, NASCAR is an advertiser’s dream.
SPOKESMAN: Here we go, Tropicana. One, two, three…
MARK SCHWEITZER: There is a higher brand loyalty. NASCAR fans are three times more likely to buy sponsor company products, a Valvoline, Tide.
TERENCE SMITH: And sports that didn’t even exist a few years back…
MARK SCHWEITZER: Yes.
TERENCE SMITH: …Are making headway.
SKATEBOARD ANNOUNCER: The killer bees!
TERENCE SMITH: David Carter, co-author of On the Ball, a study of sports-business practices, says broadcasters are finding new ways to reach a generation disaffected from mainstream sports.
SPOKESMAN: He landed a 360!
DAVID CARTER: You are seeing networks create sporting events because the advertisers are saying, “where can we reach young kids?” It has sort of been turned on its ear.
It used to be that they would accommodate fans by televising it.
Now you see the production and manufacture of sporting events, really, I think, with the primary purpose of reaching this core young market that is no longer following the traditional stick-and-ball sports on TV.
TERENCE SMITH: Pro football, with its weekly format and camera- friendly game action, has been the exception. For many, it is appointment television. While, overall, viewership of the NFL has actually flattened out in recent seasons, you’d never know it from the size of the league’s television contracts. The NFL is currently pulling in $17.6 billion over eight years from four networks that bid against each other for the rights to broadcast the games.
NFL PROMOTION: NFL on CBS.
TERENCE SMITH: Football continues to bring the attention, audience, and prestige to a network that other pro sports once did.
The games serve as a promotional vehicle for the networks’ fall programming, and have traditionally been the platform for advertisers to reach that sought after demographic group: Young men.
LESLIE MOONVES, Chairman of CBS: I think CBS without football was not a network.
TERENCE SMITH: At a pre-season pep talk with his network’s NFL Broadcast staff, CBS chairman Leslie Moonves remembered the dark days in the 1990s, when CBS lost it’s NFL contract.
LESLIE MOONVES, Chairman of CBS: It didn’t feel like a network, we felt like second-class citizens, I think NBC is starting to feel like second-class citizens now. As our lead grows over them every single year, I think they are missing football more and more.
TERENCE SMITH: But in difficult economic times, even CBS insists that it cannot afford to lose money on any sport, including football.
SEAN McMANUS: All we said from day one is, every year of the NFL contract we are going to make money.
TERENCE SMITH: Sean McManus. A little money, or a lot of money.
SEAN McMANUS: At least a dollar a year.
TERENCE SMITH: Well, you set the bar pretty low. The networks are paying attention to tomorrow’s consumers, who may be talking on the phone, reviewing statistics online, and playing a fantasy sport, while watching television.
CBS game analysts are keenly aware of the opportunities presented by fantasy leagues players, who follow hypothetical dream teams with a compulsion for statistics.
SEAN McMANUS: I just think it gives the fan a feel of participating in the game, in taking some ownership.
CBS SPOKESMAN: It gives these kids a chance. It’s like bubble gum cards used to be.
TERENCE SMITH: Accustomed to the speed and interactivity of video games, today’s youth have different expectations for game action.
CBS SPOKESMAN: They need feedback. You know, the younger kids are so used to that.
TERENCE SMITH: George Bodenheimer:
GEORGE BODENHEIMER: We have 11 million people a day coming to espn.com, and we know a large portion of them are doing that while they are watching us on air. So, clearly, there are some different trends afoot.
TERENCE SMITH: Sports broadcasts are responding with faster-paced programming, more highlights shows, more music and graphics, and more information on the screen during games.
SEAN McMANUS: The challenge is, appealing to that new generation of viewers without alienating your traditional sit-in-the-chair-and-watch-the-game viewer.
TERENCE SMITH: But even as sports television moves to broaden its appeal, the sheer number of sports, and the steady migration to cable may continue to dilute any sport’s fan base.
And some have suggested that sports networks with their high programming costs be removed from basic cable altogether. It’s an idea strongly opposed by ESPN’s Bodenheimer.
So you see no serious prospect that ESPN will be taken out of basic cable and put into some premium tier?
GEORGE BODENHEIMER: I really don’t for the simple reason, Terry, that its not consumer friendly. It sounds better than it is when you start to look at it and try to see how you would implement that from a technology perspective; from a marketing perspective, I think it falls apart.
TERENCE SMITH: In their drive for more revenue, says David Carter, sports teams had better beware.
DAVID CARTER: The sports industry, they are in a very, vary precarious spot.
If you are moving your sport further down the dial, from broadcast to cable, and then maybe to a premium-pay channel on cable, you might be making more money today, but your sport or your team is being exposed to fewer and fewer people. And over time, that might diminish your fan base.
If they ever lose that generation of fans, it will be the proverbial “game over” for them.
TERENCE SMITH: And for TV’s golden goose as well.