Game Plan

In mid-May, NBC and the National Hockey League signed a distinctive revenue-sharing deal, replacing ABC Sports as the league's broadcast network. In an unusual move, the NHL will not receive a licensing fee, allowing NBC to recoup production and distribution costs and then share profits—if any exist—with the league. If the deal proves successful for both sides, it may mark a new model for broadcasters, especially for ones with the potential to share sports product across broadcast and cable destinations. For at least the next year, NHL cable rights stay with ESPN. But for NBC, the deal is a way for the network to stay in major-league sports broadcasting while reducing the risk that others, such as Fox, take on by paying huge licensing fees for events like the World Series—which, in turn, increases costs for advertisers. (NBC Universal is also airing the Athens Olympics across five networks this summer—NBC, USA, Telemundo, MSNBC and Bravo—media buys that largely have been locked up since last summer and that maximize reach across the company's broadcasting and cable outlets.)Hockey rights aren't in the same league as baseball or the Olympics, but in a time when programming costs are a major concern across television, the deal is noticeable. Whether it will have any impact remains to be seen. At Fox's upfront presentation last week, David Hill, Fox Sports chairman and CEO, said that big-time sports were the best and only way to sustain brands and regularly hit audience targets. "What we're rolling out is sure to deliver the audience you need," he told upfront attendees. "With 144 million [U.S. viewers], the Super Bowl delivered more audience than the finale of Friends and the Oscars combined." The network touts reach with events like the Daytona 500, baseball's All-Star game, the World Series and the Super Bowl. When buyers get around to looking at fees for sports programming (which normally take a back seat during prime-time upfront season), pricing is usually fairly static unless buyers turn to sports specifically to avoid paying hefty increases for prime-time programming. Last year, sports cost-per-thousand rate increases were up by single digits but did not match prime-time increases. "We should see relatively close, low-to-mid-single-digit CPM increases," says Jason Kanefsky, vp of national broadcast at Havas' Media Planning Group. "All signs are that this year will be similar to last."Despite the proliferation of alternatives to big network sports on outlets such as NFL Network, NBA TV and Golf Channel, which are available on a growing number of cable systems and in the digital universe, those and other channels have miles to go before posing a serious challenge to the broadcast networks."Accumulating GRPs [on cable] for the fun of it is not necessarily the best way to go about things," says Kanefsky. "If clients have a boat load of money, you can do both." But broadcasters still hold sway where appointment sports events are concerned, according to buyers. "There is value to being in live-event sports," says Kenefsky. "Watching Tiger Woods coming down the stretch is better than buying 50 spots across second- and third-tier outlets. ESPN has a lot of inventory they have to move. They are attractive to advertisers versus the general market." And if ABC's Monday Night Football fails to make its numbers, buyers can get made good on ESPN Sunday night given the cross-ownership of the two networks, something that happens if the ratings are off by a small margin. Otherwise, MNF will make good on a regular basis so as not to alienate advertisers. The landscape for sports like tennis is not as fluid, buyers say. USA Network, which broadcasts early rounds of the U.S. Open, is a solid buy for the championships. The final round of a big tournament may be a riskier bet given its dependency on the number of people playing the game in the United States at the time and the number of Americans in the semis or finals. Jon Mandel, co-CEO of Mediacom, says that tennis and other sports can at times be bought effectively across cable to avoid the huge expectations that sometimes come with an event like Wimbledon or a major golf tournament. Buyers agree that for the best value, there simply is no substitute for a Yankees-Red Sox playoff series or a tennis final featuring the Williams sisters on the networks. But that doesn't mean NBC wouldn't like to get its hands on the NHL cable rights after the 2005 season.Sandy Brown is the media reporter for Adweek.

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