Some like it local - Broadcasting & Cable

Some like it local

As national sports' ratings dip, regional teams draw viewers
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Don't write an obituary for sports on television just yet. While ratings for sports on broadcast and national cable have slumped, regional sports networks are growing.

"The people watching regional affiliates are watching very passionately. They have a vested interest in their team," said Tracy Dolgin, president of Fox Sports Net, which owns a piece of 22 regional sports networks. "It's love of a game vs. identification with a team."

A game that might not draw well nationally can harvest huge ratings on a regional sports net. This season, the second-round NBA playoff game between the Toronto Raptors and the Philadelphia 76ers registered a 2.1 on TNT, while another game in the same series brought Philadelphia's Comcast SportsNet a 16.1, its highest-ever rating.

When a team performs well, local interest peaks. When it slumps, a regional channel's ratings dip. Some teams buck this trend, though, attracting viewers no matter how they are playing.

"Their distribution is to people who are the most interested," said Kris Magel, vice president of national broadcasting for Optimedia International. "They are very targeted. It's the home-team level."

National cable networks can't count on such loyal viewing habits. The national audience is more finicky, and even cable's sports pioneer, ESPN, has seen its ratings falter.

"When ESPN started, they brought something into people's living rooms. But now what they bring can be found in many other places," said Tom McGovern, director of sports marketing at OMD USA.

ESPN's total-day ratings were off 20% for the first quarter this year, the fourth straight quarter its ratings have declined. The average daily rating for first quarter 2001 was 0.52, compared with 064 for the same period in 2000 and a 0.65 in 1999.

ESPN execs are quick to point out that, over the past three years, they have increased ratings in their core demographic, men 18-34.

The NBA on TNT and TBS was off 15% this year. The Turner networks posted a 1.1 average rating for regional season games, compared with an average 1.3 in 1999-2000 season. Playoff ratings were down 18% from last season.

FX's baseball ratings have dropped 2% since last year. CNBC's Senior PGA Tour broadcasts have averaged a 0.26, compared with a 0.49 rating in 2000 on ESPN.

Cable executives assert that these drops are a result of audience fragmentation: Because, there are too many places on TV to find sports, viewers are distracted.

Regional sports networks usually have an easier explanation for declining ratings: The home team stinks.

Case in point: When Michael Jordan and the Chicago Bulls were racking up championships in the 1990s, Fox Sports Chicago was as high as a 25.0 rating for Bulls broadcasts. Now that the team is in the NBA basement, ratings average around 1.4 (still higher than the average on TNT).

The Sacramento Kings have been successful the past two seasons, but ratings jumped 34% this season on Fox Sports Bay Area as the team became more popular.

"In Cleveland, Indians coverage is averaging over a 9.0," said Daniel Ronayne, Rainbow Sports' vice president of marketing and communications. "This gives you a tremendous platform to promote other shows and move the audience from one programming element to the next."

Rainbow Sports Network owns 50% of Fox Sports Net and is the majority owner and operator of five regions. FSN reaches 73 million homes, with Rainbow's five nets reaching 29 million.

Rainbow operates Fox Sports Ohio, along with FSNs in the San Francisco Bay Area, Chicago, Florida and New England. The five networks' MLB ratings are up 1% so far this season, and their 2000-2001 NBA ratings increased 4%.

"There are bigger variances [regionally] team to team, season to season, but when you add them all up, ratings are more stable," said Fox's Dolgin.

Fox Sports Net is the biggest player in regional sports. It owns, operates or provides programming for 22 regional sports networks. FSN owns the local broadcast rights for 70 of 89 NBA, NHL and Major League Baseball teams. (The NFL has an exclusive national broadcast contract, while the three other leagues have a national and local broadcast contracts.)

Regional networks struggle to parlay their game ratings into audiences for non-event programming. The quality of news and information shows is critical to get viewers to stick. The challenge is that local sports news isn't always plentiful or compelling enough to drive programming.

"Regional networks need to create more salable, watchable programming when there's not a local game on the air," commented OMD USA's McGovern. "That's how they are going to grow."

Comcast SportsNet, which operates networks in Philadelphia and Baltimore-Washington, creates most of its own wraparound programming, including a morning news show and pregame and postgame coverage. Heavy promotions drive fans to the network for their local sports news, said Jack Williams, president of Comcast SportsNet.

"The games we televise get a good audience for our postgame shows," Williams said, "but even nationally televised games also give us a strong postgame audience."

Fox Sports Net has tinkered with its balance of local and national programming. Several years ago, FSN positioned itself as an alternative to ESPN for national sports news. Since then, it has retrenched and regionalized its approach and now produces 15 versions of theRegional Sports Report news show.

In April, FSN moved theRegional Sports Reports
back to 10 p.m. from 11 p.m. so the show would immediately follow prime time games. Second-quarter ratings suggest that the show has found a better home in its new slot. In Houston, the average ratings for Fox Sports Southwest'sRSR
increased 288%, to 0.66 from 0.17 in the first quarter. Denver's climbed from 0.25 to 0.63, a 152% jump. Fox Sports Detroit'sRSR
posted a 132% increase, from 0.41 to 0.95.

Most of the FSN affiliates use its national programming, such as theNational Sports Report
and The Last Word With Jim Rome, to fill programming blocks, but smaller nets rely more heavily on it.

"Fox Sports Net can provide local and national programming for the regional level at a better cost than if the regional networks produced their own," said Optimedia's Magel.

Larger channels such as Madison Square Garden network and Fox Sports Southern California have the resources and the local fodder to support their own original programming.

Some team owners are considering launching their own regional sports nets. Microsoft co-founder Paul Allen, who owns the Portland Trailblazers and Seattle Seahawks, is building a regional net, Action Sports Cable Network, in the Pacific Northwest. In May, ASCN signed a three-year deal with ESPN for ESPNews and ESPN Regional programming.

The YankeeNets, an ownership consortium composed of the New York Yankees, New Jersey Nets and New Jersey Devils, is expected to launch its own regional network in 2002. The Yankees' have one year left on a 12-year, $486 million deal with Madison Square Garden network (an FSN affiliate). YankeeNets have until June 28 to exercise a $30 million option to buy out 85 games next season, which would then free the consortium to start a new channel in 2002. YankeeNets executives have said their teams would provide the content, while a partner company would create and distribute the network.

While regional sports networks have experienced growth, broadcast networks have seen their numbers dwindle.

ABC'sMonday Night Football
averaged respectable 12.7 last season, but its ratings have slipped steadily over the past six seasons. NBA ratings on NBC have plummeted 35% since Michael Jordan's retirement in 1998. ABC averaged a 1.1 rating for its NHL coverage, down 15% from last season. Other losers: Last year's World Series pulled in a 12.4 ratings, the lowest national rating ever for the event. The Sydney Olympics were the worst rated Games since 1968.

One sport that has seen its ratings improve on broadcast TV is NASCAR. Through the first 12 races of the season, Fox is averaging a 6.5 rating, up 20% from ABC and CBS' combined 5.4 average last season.

Buying time on nationally televised games may be more attractive to advertisers than buying on regional sports nets. National networks offer advertisers more uniformity, and, while the spots are more expensive, it can be a more efficient media buy.

On the other hand, regional networks offer spots that can be sold locally, regionally or as unwired national packages across several networks. These unwired packages guarantee airtime in each market, but the ads may be seen at different times and on different days.

"This can be a benefit because you are getting a large portion of the country, but the local appeal that the sport brings," said Optimedia's Magel. "I'm not saying it's the answer to sports buying, but it's a viable option."

ESPN has an advantage over regional sports nets because it attracts a larger piece of the national advertising pie, according to Ed Erhardt, president of sales for ESPN and ABC Sports. "Advertisers are buying demographics, not household ratings," he said. "That's why people buy ESPN."

<p>10 FSN O&amp;Os season to date</p><p>3.5</p>

10 FSN O&Os last year

3.3

Percent change

6%

ESPN season to date

1.16

ESPN last season

1.35

Change

-14%

ESPN2 season to date

0.46

ESPN2 last season

0.51

Change

-10%

FX season to date

0.53

FX last season

0.54

Change

-2%

<p>10 FSN O&amp;Os season to date</p><p>2.10</p>

10 FSN O&Os last season

2.21

Change

-5%

TNT 2000-2001 season

1.03

TNT 1999-2000 season

1.24

Change

-17%

<p>10 FSN O&amp;Os season to date</p><p>1.33</p>

10 FSN O&Os last season

1.53

Percent change

-13%

ESPN season to date

0.59

ESPN last season

0.62

Percent change

-5%

ESPN2 this season

0.25

ESPN2 last season

0.29

Percent change

-14%

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