1. Sports Broadcasting Chapter 17

2. Introduction: The Electronic Media What is electronic media? –Radio, television, and the Internet Sound and images are captured by electronic devices and electronically encoded. Information is transmitted at the speed of light (cables or broadcast transmitters/satellites) to receivers. Information is decoded and transformed back to sound and images. Electronic information can also be recorded for use at a later time.

3. Introduction: Broadcasting Electronic media has transformed the sport industry and its relationship with the public. –Today, sport fans can watch events unfold as they happen. Broadcasting has profoundly altered the business of sports. Symbiotic relationship between sport organizations and media rightsholders –Sport entities rely on broadcasters for revenue and publicity. –Electronic media know that sporting events are a sure- fire means of attracting audiences that advertisers pay to reach.

4. History of Sport Broadcasting 1800s: Electronic communications began with telegraph (1844) and telephone (1876), which relied on electricity and conductive wires. By World War I, “wireless” (radio) was well established. 1921: First radio broadcasts of sporting events: –April 11, 1921: KDKA in Pittsburgh broadcast the first live sport program, a boxing match. –August 5, 1921: KDKA broadcast first baseball game— Philadelphia Phillies vs. Pittsburgh Pirates. –Pittsburgh Athletic Co. v. KQV Broadcasting Co. (1938), a federal court ruled that the home team controls all commercial broadcasting rights to a sport event.

5. History of Sport Broadcasting (cont.) Network radio allowed many local stations across the country to broadcast the same event. Network = linked individual stations via telephone wires. Broadcasters understood that sports sold radios. Radio’s ability to reach a national audience also created national advertising opportunities.

6. History of Sport Broadcasting (cont.) Owners initially were concerned that free game broadcasts would make fans less likely to buy tickets to games. However, radio increased fan support and was a valuable publicity and promotional tool. After World War II: With television, consumers could now both hear and see their heroes in action. During the 1950s, television replaced radio as the nation’s primary mass medium. By 1960, television was generating twice as much advertising revenue as radio.

7. History of Sport Broadcasting (cont.) 1960s: Technology improved the quality of the product. First use of videotaped “instant replay” in a sport telecast was during the 1963 Army–Navy game on CBS (Gelston, 2008). “Solid state” transistor-based cameras and zoom lenses enhanced picture quality and mobility, making for increasingly compelling video images. Growth in sport broadcasting was dominated by two men. –ABC Executive Roone Arledge –NFL Commissioner Alvin “Pete” Rozelle

8. History: Roone Arledge Under Arledge, instead of simply showing the game, ABC would combine sport and entertainment. It would take the fans to the game by showing them exhausted players on the bench, cheerleaders, and mascots, bringing fans “up close and personal.” 1960: ABC acquired rights to the new American Football League (AFL) (Loup, 2001). 1961: Arledge produced Wide World of Sports to show fans “the thrill of victory and agony of defeat.” 1968: Turned ABC into the “Network of the Olympics.” 1970: Arledge produced Monday Night Football, the first sport programming series in primetime.

9. History: Pete Rozelle Pete Rozelle –Moved the NFL headquarters to New York City, home to all of the television networks and major ad agencies. –NFL pools its regular season and playoff TV rights and sells them to the highest bidder, with revenue to be divided equally among the teams (revenue sharing). –Sport Broadcasting Act of 1961 was a result of antitrust litigation over Rozelle’s plan. Granted professional football, baseball, hockey, and basketball teams immunity from antitrust actions regarding the pooled sale of broadcast rights.

10. History of Sport Broadcasting (cont.) Huge ratings garnered by Monday Night Football and the Olympic Games led broadcasters to pursue the rights to additional sporting events. NCAA men’s basketball championship was first televised on Monday night in 1973. MLB scheduled World Series games in primetime in 1971. 1975: HBO delivers Ali-Frazier fight via satellite. 1977: Ted Turner beams TBS signal nationwide via satellite. 1979: ESPN opens for business: Sports 24 hours a day (Miller & Shales, 2011).

11. History of Sport Broadcasting: ESPN 1980s: ESPN was emerging as a sport television force. SportsCenter offered a content-rich alternative, with scores, highlights, and news on a national scope, plus an entertaining blend of irreverence and humor. 1987: ESPN signed its first agreement with the NFL. Levied a surcharge on its subscriber fees, which cable operators willingly paid (and passed along to their subscribers) (Miller & Shales, 2011). 1987: ESPN offered NFL Primetime, an hour-long show devoted entirely to NFL highlights, providing in-depth coverage that previously had not been possible on TV (Miller & Shales, 2011).

12. History of Sport Broadcasting (cont.) 1980s –NCAA limited the number of times any one university could appear on television and distributed television revenue among its members. Led to Board of Regents v. NCAA (U.S. Supreme Court case), through which colleges won freedom to sign their own deals for college football. 1980s: The cable industry expands to suburban areas, offering enhanced picture quality plus access to additional networks other than the three networks (Eisenmann, 2000). 1990s: DIRECTV delivers programming to homes via direct broadcast satellites (DBS) (DIRECTV, n.d.).

13. History of Sport Broadcasting (cont.) 1990s: Public usage of the Internet started growing at a rate of 100% per year (Internet World Stats, n.d.). 1994: AOL offered multimedia content including news, reference, entertainment, and educational material (McCracken, 2010). 1993: ESPN2 launched, which was marketed as the “hipper and hotter” version of ESPN. 1995: ESPN created the X Games, a television property it owned, instead of having to pay a rights fee for it. X Games also helped give a brand identity to ESPN2.

14. History of Sport Broadcasting (cont.) 1999: First digital video recorder (DVR) introduced. Allows consumers to time-shift their viewing of programs to after live telecasts to skip commercials almost instantly. 2000s: High-definition television (HDTV) established itself as a force in the marketplace (Cianci, 2012). 2003: ESPN became the first sports network to launch an HD channel (ESPN Media Zone, n.d.). 2000s: Growing availability of high-speed broadband Internet connectivity. 2000s: All the major American professional sport leagues have launched their own networks.

15. The Business of Broadcasting The standard sport broadcasting business model is for a telecaster to pay a rights fee to the organizer of a game or event. The telecaster: –Produces the telecast –Arranges for its distribution to the public –Recoups its fees and expenses by selling advertising in the game telecast and network distribution rights to cable and DBS operators

16. The Business of Broadcasting: Rights Fee In most professional and college team sports, national television rights are controlled by the league or conference and individual teams retain radio rights and some local television rights. For individual sports, such as tennis tournaments and boxing matches, the event organizer controls the television rights.

17. The Business of Broadcasting: Rights Fee (cont.) Key terms in the negotiation of a rights agreement include: –The amount of the rights fees. –The territory in which the telecast can (or must) be distributed. –The length of the deal. –The process for selecting particular games for telecast. –Copyright ownership. –Sponsorship rights. –The number of commercial units to be included in the telecast. –Procedures for preempting coverage in the event of inclement weather or other unforeseen circumstances. –Whether the telecaster will have the first right to negotiate a renewal of the agreement.

18. The Business of Broadcasting: Value Broadcasters determine how much they are willing to pay in rights fees by calculating how much money they can make on the programming by selling advertising in the particular programming. Also, determine whether the programming will make the network more attractive to cable/DBS companies. NFL: Largest rights fees because of highest rated sport programs.

19. The Business of Broadcasting: Revenue Sharing Rights fees paid to leagues or conferences usually are shared equally among all member teams. Because all NFL games are subject to league-wide contracts, all TV revenue is shared equally. Revenue disparities can occur where teams receive television fees from both national and local rightsholders.

20. The Business of Broadcasting: Production A network must obtain rights fees. If several networks are interested, a bidding war can drive up the rights fee. Three typical rights arrangements: –Rights and production deal –Rights only agreement –Time buy Rights and production: In addition to paying a rights fee for a particular event or series, a broadcaster must pay the expenses necessary to produce the coverage.

21. The Business of Broadcasting: Production (cont.) –Setting up cameras at various locations within the playing venue. –Outfitting a booth in the venue press box for the announcers describing the action. –Arranging for a remote production facility, frequently called the “production truck,” because it is configured to travel to events. –The clean feed of the program is transmitted from the truck to a network studio, where commercial and promotional announcements are added. –The finished program then is retransmitted to network affiliates.

22. The Business of Broadcasting: Advertising For advertisers in search of key demographics (males, ethnic, higher education/income), sport broadcasts are key. The traditional advertisement in a sport television program is a 30-second commercial message for a consumer product. Commercial formats contain advertising breaks for both national commercials, sold by the networks (or equivalent independent production company), and local advertisements, sold by local stations or cable systems. Price of advertisements are calculated on the basis of the number of people watching the telecast (rating).

23. The Business of Broadcasting: Ratings The Nielson Company, the leading audience- measurement company in the nation, estimates there were 115.6 million TV households in 2013. This means that an audience of 1.156 million for a particular show would equate to a 1.0 rating. A companion measurement to a program rating is its share, which is the percentage of television sets actually in use at a particular time that are tuned to a show (Nielsen Media Research, n.d.).

24. The Business of Broadcasting: Distribution Broadcast networks Syndication Cable networks Digital networks Pay-Per-View Regionalization Radio

25. The Business of Broadcasting: Highlights and Ancillary Rights Game telecasts are protected by copyright law. A copyright is literally the right to copy an original work that is in tangible form. Video highlights can be included in a news report only with the permission of the owner of the game footage. Permission has been limited to a few plays on newscasts during the 2 days following conclusion of the game. By owning telecast copyrights and controlling highlight usage, rightsholders have created new opportunities to monetize those assets.

26. International Sports Technological advances have created huge audiences. American sport organizations and broadcasting companies are expanding their presence in foreign markets. Most valuable international property is the Olympic Games. International soccer has made big impact in U.S. market. NFL and NBA negotiate rights agreements with networks on a country-by-country basis, while other rightsholders utilize agents to secure international television coverage. Both ESPN and Fox operate domestic Spanish-language sports networks.

27. Current Issues Market bubble Bundling Technology Cord cutting Mobile devices Audience fragmentation

28. Career Opportunities There are two fundamental types of jobs at networks: business-related jobs and production-related jobs. Business-related jobs tend to be more strategic in nature. –The acquisition and exploitation of rights –Identifying rightsholders –Analyzing the value of rights and whether particular programming is compatible with the network’s other content –Negotiating with rightsholders –Scheduling the network’s programming –Administering the working relationship with rightsholders

29. Career Opportunities (cont.) Production-related jobs involve the creation of programs: –Producing and directing telecasts –Operating cameras –Recording highlights –Mixing in music and other production elements –Researching statistics –Transmitting program signals through the maze of satellites and fiber-optic cables that result in the program being available for viewing

30. Summary The coverage of sport by electronic media— television, radio, and digital technology—has grown into one of the biggest and most powerful forces in the business of sport. Because the sport broadcasting industry changes so rapidly, people who work in the industry—and those who want to—must keep abreast of the latest industry trends involving technology, contracts, advertising, and demographics.