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No Longer A Sports Also-Ran

Cable makes deeper strides in broadcast territory 12/08/2006 07:00:00 PM Eastern

ESPN and Turner Sports, not to mention the National Football League, made bold moves this year, confirming beyond doubt that broadcast television is hardly the exclusive home of major sporting events.

“To me, that is just old-school thinking,” says consultant David Carter, of The Sports Business Group. “At this point in sports, broadcast and cable are virtually indistinguishable.”

A series of major launches, acquisitions and one good old-fashioned standoff highlight the top 2006 storylines in cable sports.

1. MNF SCORES FOR ESPN

Anyone seeking proof that sports on cable is no longer second to broadcast should look at Monday Night Football, which moved from ABC to corporate cousin ESPN.

The first season of the new deal produced huge numbers for ESPN. MNF is averaging 12.4 million viewers, a 40% bump over ESPN's Sunday-night package last year. The 14 games are cable's 14 biggest household audiences of the year, and while overall viewers are down from ABC's last season, there's no arguing with the franchise's marquee value.

“Any metric you want to use, it's been a tremendous success for us,” says John Wildhack, ESPN senior VP of programming acquisitions and strategy.

The $1.1 billion annual price tag has led to some belt-tightening, but analysts say the deal made sense.

“Securing Monday Night Football established ESPN as the dominant sports carrier and justifies the current rate it secures from cable-system operators,” says sports consultant and former CBS Sports President Neal Pilson. “At nearly $3 a sub per month, they have to have premier sports product. So it protects that structure.”

2. NFL NETWORK VS. CABLE OPERATORS

When National Football League owners passed up $400 million in annual rights fees to keep a new package of eight regular-season games on their fledgling NFL Network, many lauded the move as a smart long-term play to get the network into more than its current 40 million homes. But operators were less impressed.

The result has been a standoff between the NFL and cable over fees and sports tiers. A public-relations battle has ensued, with the NFL hoping that a blitz by fans would force operators to cut a deal favorable to the NFL. But Time Warner and others haven't budged.

Still, the league's decision is considered sound. “I don't think anybody said it was going to be easy,” says Carter.

The skirmish has reached Washington, where the FCC stepped in—before stepping out again—to keep NFL Network games on some Time Warner systems until the operator had provided sufficient warning that it was pulling them. The issue may boil over: Comcast's battle with the Mid­Atlantic Sports Network over Major League Baseball's (MLB) Washington Nationals games raged before Congress until a deal was reached in late summer. And last week, Sen. Arlen Specter (R-Pa.) said he would introduce a bill pulling the NFL's antitrust exemption. He made that vow during a Judiciary Committee hearing ominously titled “Vertically Integrated Sports Programming: Are Cable Companies Excluding Competition?”

3. TURNER GOES DEEP FOR BASEBALL

Turner Sports paid nine figures for a TBS baseball package that includes a League Championship Series every year to go with its NBA and NASCAR properties.

“Turner has been working to increase its sports presence,” says Pilson. “When they put a sports event on, they have to account for profits they would have made from an entertainment program, but sports works for them.”

4. VERSUS: AGAINST A WALL?

When Comcast rebranded OLN as Versus, the network promised to “continue to acquire tent-pole events that audiences can't find elsewhere.”

But after missing out on such properties as the NFL, NASCAR and Major League Baseball, it has had to regroup. Still, with the network in more than 70 million homes, writing it off as a failure is quite premature.

“I think they're here to stay,” says Pilson. “Comcast is a deep-pocket parent, and there is great value in having a competitor to ESPN. And there will be other properties available to them over the next couple of years.”

But with the NFL, MLB and NASCAR just locking up new multi-year deals and the NBA said to be close to re-upping with its current partners ABC/ESPN and Turner, Versus may have to build through college sports and smaller properties until it gets another turn at the plate with the big boys.

5. NEW PLAYERS ON THE MARKET

Spike TV enjoyed a huge success with its reality show The Ultimate Fighter, which pulls major numbers in the male 18-34 demographic. Carter sees ultimate fighting and other mixed–martial-arts competitions as a bigger player down the road. “It is premature to say it will be a huge moneymaker,” he says, “but foolhardy to think it won't in the not too distant future.”

Soccer also had a big year, with the World Cup bringing in huge ratings for ESPN, which helped boost domestic Major League Soccer (MLS) to upwards of $15 million annually in a series of new deals.

According to a recent poll commissioned by The Sports Business Journal and Sports Business Daily, sports-industry professionals voted MLS the property with the most growth potential in the sports world.

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