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up the bases
Leveraging ABC and ESPN to corner sports TV
By Gabriel Spitzer
When it comes to sports broadcasting, there’s one player who is quietly adding bulk. You can pick him out anywhere on account of his big ears. His name is Mickey.
Without much fanfare, Disney has begun to emerge as the preeminent sports destination on television. Even before it acquired the rights to World Cup soccer last week, Disney had managed to assemble the deepest slate of sports properties on TV.
With its recent acquisition of NBA rights, ABC and ESPN now have at least a piece of baseball, basketball, football and hockey, as well as numerous smaller properties.
"This will be historic in that this will be the first time that all four major sports will be under the umbrella of one network," says Marc Ganis, president of Sportscorp Ltd., a Chicago-based sports consulting firm.
In addition to the "big four" sports, ABC and ESPN also own the rights to telecast college football’s Bowl Championship Series, World Cup Soccer and ESPN’s X Games franchise, as well as events like golf’s British Open and the Indianapolis 500.
Disney’s seeming ascendancy in televised sports reflects the emerging trend of sports moving gradually to cable. By leveraging ESPN, which draws revenue from both advertising and subscriber fees, Disney is using its smaller cable properties to outmuscle giants like NBC.
"They’re clearly making a move here," says Robert Thompson, director of the Center for the Study of Popular Television at Syracuse University.
"It's true that there’s this whole new landscape. Cable has totally changed the calculus of sports on television. ABC is a logical candidate to inherit the crown of sports broadcasting, because they’ve got ESPN and ESPN2 through nine, or however many there are, through which they can amortize their costs."
In giving up pro basketball, NBC proclaimed it had lost "hundreds of millions of dollars" on the NBA. But Disney has proven that sports don’t necessarily need to be a loss-leader.
"What you have to understand is that the largest profit center for ABC is ESPN, by far. It is absolutely a shift in the paradigm of sports broadcasting and rights fees. This has been going on for eight or nine years, but this is the natural evolution of it," says Ganis.
As cable changes the sports broadcasting equation, networks like NBC, without a sports-related cable property, seem to be taking themselves out of the game to some extent.
"NBC Sports is moving into becoming a niche player as opposed to a year-round powerhouse," says Ganis.
"They’re putting almost all their eggs into the Olympics basket. It’s now becoming the Olympics network, to the exclusion of all other athletic events."
Disney’s NBA deal could put as few as 15 games on ABC, with the rest headed to ESPN. Fox’s exclusive baseball deal has also sent many more games to cable, in addition to the hundreds of games Fox already broadcasts on its regional sports networks.
CBS, without a designated cable sports network, may still be able to leverage Viacom’s cable roster to benefit CBS Sports.
"You’re going to start finding that CBS Sports is going to start tying into MTV to attract younger, hipper viewers. That’s the way Viacom-CBS is going to take advantage of the trend," says Ganis.
"But at this stage, it is a clear advantage for ABC and for Fox. And I think this is part of the reason NBC has effectively lost all four major sports."
Not all observers are convinced that such a sea change is taking place in sports broadcasting.
"I don’t think that necessarily makes [ABC] preeminent," says John Mansell, a sports analyst for Paul Kagan Associates.
"ABC is in a strong position because of its ownership of ESPN and ESPN2, and its ability to syndicate. They’ve got those international networks, too. But Fox has the NFL package and a tremendous number of regional sports networks. It probably carries more sports than anyone else."
In either case, none of the over-the-air networks is likely to get out of the sports broadcasting business anytime soon.
"I don’t think broadcast networks are going to give up sports in the immediate future," says Thompson. "For one thing, they’re appealing to people who don’t have cable, which is a big chunk of the audience. And they need to do that through a diverse portfolio of programming."
January 7, 2002 ©
2002 Media Life
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