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Bornstein's Late Scores Drive NFL Network

With distribution set, CEO's focus turns to programming 10/29/2012 12:01:00 AM Eastern

This has been a great year for Steve Bornstein, CEO of the
NFL Network and executive VP of media for the league. The network was launched
in 2003, and it took until this year to get the last two major cable operators
signed up to carry it. Now it has a broad distribution, a full lineup of 13
regular-season games, and so far this season, primetime viewership is up 455%
from last year. Bornstein spoke with B&C business editor Jon
Lafayette about the state of the network and where it goes next.

How has having a full 13-week schedule of games changed the network?

Starting the second week of the season brought more
attention to what we're doing. It energized our entire scheduled in addition to
adding to our live game inventory.

Has it also pumped up your ad sales?

NFL games are the best programming out there, and not only
for us to sell-it's more valuable for our affiliates to sell. It's very popular
in the local markets.

Those games are also valuable to other television networks. Was
starting a network and putting those games on it the right move?

I think everyone at the league and club level is excited
about where we are. They've had a long commitment to the network and they've
never wavered in their support. They have committed both support financially
and support with some of their most precious assets. They had an opportunity to
sell those rights, but the decided to make a bet on themselves. Then they bet
on themselves again.

Are you making money and throwing off cash to the team owners?

I'm not at liberty to tell about our finances. I think
everybody is happy not only the financial performance but the quality of the
programming.

You've been waiting to do a deal with Time Warner Cable for almost a
decade. When did you feel a deal might finally happen?

Like everything else, it was ‘show me a piece of paper,'
then I'd know it was done. This has been a conversation that's been ongoing for
years. It's gotten serious a couple of times, and this time, their interest and
our interest came together.

What changed to make the deal finally happen?

From our perspective, not much changed. We renewed several
big distributors this summer. We had two primary guys that we hadn't signed up,
Time Warner and Cablevision. We were able to do a deal with Cablevision. They
were really interested in a full season of games on the NFL Network as well as
the success of [NFL] RedZone. Time Warner had a similar view that this was the
right time and that the value proposition was one that made sense to them.

Was Red Zone a big piece of the value proposition that made these deals
happen?

You'd have to ask them for that answer. But we were always
very sure that the RedZone was a popular service with our customers, and the
distributors that had it were very pleased with its performance. And at the end
of the day, this is all about delivering programming that consumers want.
That's the business the distributors are in. That's the business we're in. so I
never doubted that we'd get a deal done. Would we have rather gotten the deal
done sooner? Sure. But I'm glad we got a deal that works for both of us.

Did you substantially change the terms that you were asking?

We had the patience and the discipline to do a market deal.
And that was determined a few years ago and we were able to make a deal that
works for everybody.

What's the next deal that's got to get done? Is it DirecTV?

We renewed all our other big partners in the last six
months. DirecTV has few more seasons left in their contract. But we're looking
at that; we're looking at some other things as well. I think the digital world
is going to be an area that we're going to try to figure out what's the best
way to serve those fans.

Does it still serve the league's interest to have the
NFL Sunday Ticket package just be with one distributor?

Right now it seems to be working, the model we have now. We
haven't gotten to figuring out what the best models are in the future for that.
Obviously that is going to be a priority at the appropriate time.

So how does it feel now? You've got a full schedule of games. You've
got just about full distribution.

It feels pretty darn good. I've had two different feelings
with this, and this feeling beats the other feeling where we didn't have full
distribution. It feels real good. I'm happy. I'm happy for fans that wanted it
and could not get it and now [can] get it. We were inundated with
communications from them. I'm happy, obviously, for the NFL and for the
employees around here. They work really hard and now their work is universally
available and it makes everybody feel better about what they do.

There are people who talk about the high cost of sports rights
threatening to price cable out of people's budgets and push people to
over-the-top. What do you say to those people about how much adding the NFL
Network might add to their cable bills?

I don't think anybody's actually raised the cable bill once
they distributed us. I think we're a pretty fair proposition. I think the
product and the offerings are fairly priced. We've never had any pushback on
that. Your question is a much broader question. But as far as the NFL Network
is concerned I think the market has spoken and it's a pretty good value
proposition.

Is RedZone distributed mostly on tiers?

Yes-RedZone is primarily on sports tiers and there's some a
la carte distribution.

Are you getting any feedback on what the take-up rates are?

Yeah. That's proprietary information but I would be mindful
that the RedZone has been working for everyone that's been distributing it. I'm
really not at liberty to say what they're doing with it.

All of the major sports leagues have their own networks. Do you ever
take a temperature of the other league networks to figure out what they're
doing differently? They have more games to play with, leaving you with more
extra time to fill. How do you go about filling that time?

I haven't really studied the others to comment on that. But
what I was most concerned about in 2003 was whether we could sustain a 12-month
network about the NFL. And in 2003, we didn't even have any live-game inventory.
And that was quickly asked and answered. We started televising the combine and
we went through the draft, and then we went through off-season and the
mini-camps and free agency. And lo and behold we have never had a real problem
in programming this. And that was the biggest revelation for me, that the
interest in the NFL is really a 12-month-a-year interest, so we haven't had any
problem doing it. Certainly it's more exciting when games are being played.
That goes without [saying]. But the interest in the sport in the nine years
we've been on the air, it's grown each and every year, and the schedule that we
show, whether it's the draft, whether it's free agency, people are really
interested in the programming. And they're interested in their fantasy portfolios.
There's no lack of talent and content for us to report on. And we're further
blessed by having what I believe to be the best sports library in the world and
that's NFL Films. They've been recording every play and every game for the last
50 years. It's really unparalleled to have access to all that film and the
programs they produce. They produced great programs back then, but we also have
the wealth of talent to continue to produce great programming today. All of
that makes us a pretty highly viewed network both in the season and out of
season.

Where does the NFL Network go from here?

I think we have the ability to really push down on the
accelerator and take up our programming a notch. We launched two big
initiatives. We did a new two-hour pregame show on Sunday called First on
the Field,
7 a.m.-9 a.m. Eastern, and then we've made a commitment to
program the morning block, 6 a.m.-10 a.m. Eastern Monday-Friday. Both those
initiatives met with some good initial success. People are watching. They like
it. We have a good stake in the ground as we continue to increase our original
programming.

Where are you guys in terms of new media, and mobile products for
example?

We have a couple of different mobile products. We really
have a two-pronged strategy. We have an agreement with Verizon where they
distribute some of our games on phones. We also have a very robust NFL Mobile
product that we offer on NFL.com and NFL mobile. So with Verizon they have
games available on Thursdays, Sundays and Monday, and the RedZone, and we offer
a lot of apps that people seem to be responding to very favorably through
NFL.com.

How about video-on-demand?

We do have a fair amount of video-on-demand through our
cable distributors. We give them access to those programs and they're doing
quite well. Our philosophy essentially is we want to serve the NFL fan wherever
they are, however they want to be served. So we're pretty aggressive in those
areas. And that's a lot of our future. People are coming to us on more mobile
devices than ever before. We continue to feed that pipe with content that
they're interested in.

The television networks are all interested in TV Everywhere and being
able to make whatever content they've licensed available to viewers wherever
they are and whenever they want, on tablet and on the phone. Is that part of
their rights deals with the NFL?

We've granted them a broader array of rights. I'm not going
to go into specifics; they didn't get everything they wanted but a lot of what
they needed. As far as the NFL Network is concerned, we believe Television
Everywhere serves fans and we're supportive of that. We have some
authentication deals in place that we will be announcing shortly. We plan to be
pretty aggressive in that area. We think our content works very well in those
spaces.

Do you have any other products in the pipeline?

In don't think there's anything we can talk about. We see
the digital exploitation as being one that we want to be conversant with. We
want to actually be able to get the product to our fans that want it how they
want it. That's our overall guiding philosophy and I think it will serve us
very well.

In terms of ad sales and sponsorships, Keith Turner, the head of NFL
Network sales, left two months ago. Are you guys looking for a replacement?

Yes. That was an important job. Keith will be missed, but we
have a pretty unique set of assets here and we've had some interest from people
that we think could help further the brand and be happy selling NFL
sponsorships and advertising.

Do you have a time frame for filling that job?

That's more internal than anything else, but we're going to try
to get the right person and hopefully we'll have that person by the first of
the year.

In the meantime, what does the ad market look like for you guys?
Fourth-quarter seems to be a little bit slow for most media categories. Does
that include NFL football?

I think sports in general is pretty good, and NFL football
is probably leading the pack, so I think everybody who I've talked to sees it
as stronger maybe than some other elements of advertising. We seem to be in
very good shape.

Do you have big Super Bowl plans?

We continue to do more and more each and every year. I think
we do over 100 hours of live programming. We're there for nine days before the
event. We stay there after the event. We cover everything that you can from
press conferences to halftime announcements, so there's no lack of material
that's coming out of there. The one event that we're most proud of, or the new
event that we're most proud of, is NFL
Honors
. This will be our second year where we acknowledge all the winners
of the awards for the current season. This year it's in New Orleans. We think
this has the opportunity to be an event that will continue to grow in
popularity and interest by our fans. I know the players enjoyed it and the
owners enjoyed it and we had a very strong ratings performance in our inaugural
season and we hope to grow upon that. It's the Saturday before the Super Bowl
on CBS this year.

You turned 60 earlier this year. Now that the NFL
Network seems to have graduated high school and is on its way to adulthood, is this
a good place for you or is it time to look for other challenges?

I think the NFL network is in its post-graduate phase. Me
personally? Look, some of my best accomplishments have been being on the ground
floor of sports media businesses that have grown to maturity. I've had a great
career in that regard. I've been fortunate to be involved with ESPN and ABC and
now the NFL. Those are all great companies. I'm very proud to be here and look
forward to continuing.

So you've got a little more room to run with the NFL job?

I'm enjoying it. And I think they enjoy having me around, so
unless you know something I don't know...I think they consider me an asset.

When I Googled you, what came up was that you get paid
more than NFL commissioner Roger Goodell. It looks like this year, you're
probably having a much better year than he is.

You can say that line. I can't. It's like I'm Babe Ruth
[who, when asked how he could get paid more than President Hoover, replied "I
had a better year"]. The commissioner deserves everything he gets.

Is there anything else you want to say?

Look, I'm very proud of what we've accomplished here. I'm
happy that we've got the distribution and I'm looking forward to seeing not
only the network but the sport continue to be important to the American fan.

Do you think there's still upside to sports in general and the NFL in
particular?

I don't believe that trees grow all the way to the sky
forever. But here in a media landscape where choice and fragmentation continue
to be disruptive, live sports holds a very special place. We used to talk about
how you couldn't rent live sports at a Blockbuster's. Now with TiVo you can
record games, but it's not the same, so it's an important differentiator.  But we can't take anything for granted. We
have to listen to what the fans are saying. We're not giving them something
they don't want. We try to serve fans where and when they want. We offer great
product and people want this content.

E-mail comments to jlafayette@nbmedia.com
and follow him on Twitter: @jlafayette

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