How To Make The CW a PlayerSnagging sports has helped new networks get on the map 2/03/2006 07:00:00 PM Eastern
While the new CW network will rely on youth-targeted WB and UPN programming for its fall launch, over time, it may consider a sports package to take the network to the next level. That strategy is straight out of the playbook of a once fledgling network that now goes toe-to-toe with ABC, CBS and NBC.
“You have to look at Fox as an example of using sports to grow their network,” says sports consultant Neal Pilson, a former CBS Sports president. “Fox used sports because they made a judgment they wanted to be a top network.”
This did not happen immediately. The Fox network launched in 1986 and went to seven nights a week in 1993, before landing the rights to show NFL football in 1994—a deal that cost the network a reported $395 million per year.
Grabbing sports is a long way off for The CW. The network would first need to find enough success to expand the number of hours it programs, before even contemplating whether the sports investment would be worth it.
“They are obviously years away,” says Pilson.
The entry fee is daunting. The NFL is the best bet for drawing viewers, and NBC is paying a reported $600 million a year for one Sunday-night game a week. The eight-game package the NFL recently decided to keep on its NFL Network reportedly could have commanded upwards of $400 million from Comcast or another player. And for a network born from two netlets that were bleeding money, it should be noted that investing in a major sports package is usually not a money maker; networks often use them as loss leaders to drive other programming.
Then there’s the issue of whether the sports audience would be compatible with that of the rest of CW’s programming. While Fox has had success promoting such shows as Prison Break and 24 during games, promoting Gilmore Girls during the World Series would not have the same effect.
It’s not as simple as The CW’s merely coughing up the ante. “You don’t just have to pay for the rights fees,” says David Hill, chairman and CEO of Fox Sports Television Group and entertainment president of DirecTV. “You also have to build an entire sports infrastructure.”
But while a CW play for a major national sports deal is a way off, the formation of the new network and the subsequent affiliate maneuvering could nonetheless affect local pro-sports television packages in several markets in much shorter order. When an entity like Fox Sports Net (FSN) owns rights to a local pro-sports TV package, it is common for it to sub-license a portion (say, 30 baseball games) to a local over-the-air station. FSN has 12 such deals around the country with current UPN and WB affiliates.
FSN President Bob Thompson says the CW shakeup may give FSN the chance to upgrade deals in certain markets. In Houston, for example, FSN does not have a deal with the Fox-owned duopoly station, UPN affiliate KTXH, but rather puts a package of Astros baseball games on independent KNWS. With KTXH losing its network programming, FSN has the opportunity to upgrade its deal with KTXH, a stronger outlet.
While some newly independent stations may go looking for similar time-buy arrangements (FSN keeps commercial time, fills the inventory and provides production), don’t expect many to get into the bidding for full-season packages. Escalating fees have put most local stations out of the rights-buying business. A typical season-long baseball package in a midsize market, for example, would cost a station $12 million-$15 million in rights fees, plus another $4 million-$5 million in production costs.
“Unless it’s in a huge market with a great team, it wouldn’t make sense for a station,” Thompson says. “The dual revenue stream [subscriptions and advertising] is why local games have shifted so heavily to cable.”