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Marlins help lead Sports TV Revolution


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More cablers fielding regional sports nets

By John Dempsey, Variety via Yahoo! News, 8/22/2004

 

Give cable TV executives a choice and they'll pick Michael Phelps over Shrek anytime.

 

Sports, as embodied in Phelps' exploits as a champion Olympic swimmer, keep driving home their subjugation of theatrical movies, having long since eclipsed theatricals as the most lucrative programming on the TV landscape.

 

The ascendancy of TV sports has emboldened more team owners to take a flyer and create regional sports networks of their own.

 

Four regionals are preparing to open for business in the next few months, led by Comcast SportsNet Chicago, which has locked up deals for exclusive local cable rights to the games of the baseball Cubs and White Sox, the basketball Bulls and the hockey Blackhawks. The teams were all willing to break away from their deals with Fox Sports Net Chicago because Comcast, the biggest cable operator in the Chicago area (and by far the biggest in the country), handed over an equity stake to each of them.

 

Beyond the regionals, cable TV's love affair with sports has spurred the creation of three nationally distributed 24-hour networks: the National Football League's NFL Network, the National Basketball Assn.'s NBA TV and Major League Baseball's proposed MLB Network.

 

The ratings of last week's Olympics telecasts appear to be justifying TV's faith in sports. The Games are off to a gold-medal start, enticing more viewers to watch the Olympics from Athens on NBC (and on a batch of NBC-owned cable networks) during the first five days than had tuned in to the summer event four years ago from Sydney.

 

Sports have vaulted over movies, which don't stand out anymore as highest-value programming on TV because people can find them everywhere, from DVD stores to video-on-demand cable to dozens of pay- and basic-cable networks.

 

By contrast, "you can't go down your local Blockbuster tonight and rent a live New York Yankee game," says Bob Gutkowski, vice chairman of the sports marketers CSMG, and former president of Madison Square Garden.

 

Dean Bonham, president of the Bonham Group of sports consultants, says, "Sports is the original reality programming. Mark Burnett didn't invent reality with 'Survivor,' he stole it from real-time, real-life sports."

 

While smaller numbers of people are watching Spider-Man and Harry Potter on TV and cable, the big sports keep adding viewers. As Major League Baseball heads into the last six weeks of the regular season, the Nielsen ratings of the 25 teams whose games dominate the programming of the Fox group of regional sports networks are up by an average of 12% year-to-date compared with the same period in 2003.

 

Some of the individual team year-to-year increases on these networks are staggering: The Chicago Cubs' ratings are up by 72%, the Anaheim Angels by 63%, the Milwaukee Brewers 60%, the Detroit Tigers 58% and the Florida Marlins 43%.

 

Even the games on the Fox broadcast network every Saturday afternoon are up in ratings this year, by 4%, to a 2.8.

 

The National Basketball Assn. generated vast goodwill last season at TNT and ESPN, which carry the bulk of nationally distributed NBA games. TNT was up by 16.7% in rating for 52 games during the regular season, and ESPN's rating for 64 games rose by 8.3%. (On the down side, ABC added four NBA games last season, bringing its total to a modest 18, but the network's rating fell by 7.7%.)

 

The Chicago regional is taking advantage of the ascendancy of TV sports. SportsNet Chicago is charging a strapping monthly fee of $3 a subscriber, which would make it the priciest network in the area.

 

The exorbitant license fee has kept local cable systems other than Comcast from signing up yet. But the network's argument is that advertisers will not hesitate to climb on board, eager to reach the masses of sports-hungry young males."Chicago cable systems will sell the spots adjacent to the local team games for bigger dollars," says Kevin O'Malley, TV sports consultant and former senior VP of Turner Sports.

 

Typically, a sports regional ponies up two minutes an hour of commercial time to the cable system. Madison Avenue will pay a premium for these local 30-second spots, helping the cable system to put a dent in the humongous license fees it shells out to the network.

 

These same economic considerations apply to the Altitude Sports Network, which kicks off next month in Denver with exclusive cable coverage of the Denver Nuggets of the NBA and the Colorado Avalanche of the National Hockey League; Carolinas Sports Entertainment TV, which premieres in October as the showcase network of the Charlotte Bobcats, the newest NBA franchise; and the still-to-be-named network of the NBA's Memphis Grizzlies, whose goal is to be on the air by early November.

 

All these regionals have a shot at financial success, says David Carter, a principal in the Sports Business Group, because "the economy has begun to rebound, and the sponsors of TV sports know exactly how to reach the army of couch potatoes" mesmerized by touchdowns, slam dunks and tape-measure home runs.

 

The Marlins have a very good deal with Fox Sports Net Florida (95 games on FSN, 55 on PAX/Marlins TV) and it looks like it is paying off for the Marlins with higher ratings, popularity, fan interest, and revenue. 43% was the increase from 2002 to 2003 and 2004 should be another good year.

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Also, word is that the Marlins may just be getting some more games on TV here in Southwest Florida. Currently we get the 95 FSN games and 24 out of the 55 PAX/Marlins TV games via UPN8, but word is Comcast (which runs UPN8) is getting ready to launch a local SWFLA version of CN8 like in Philly, Washington/Baltimore, and Boston that will air Everblades Hockey, Flame Basketball, and Marlins Baseball. The likelihood of this channel lauching is good and if Comcast does move the Marlins TV package there, you could see all 55 PAX/Marlins TV games on SWFLA TV. Hopefully Time Warner will pick up this new channel, to be called CN80, and they get their behinds out to my house and hook me up.

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Nice to the see Marlins audience is up, but I don't think that the numbers back up the general statement that sports is golden for TV. The ratings aren't that great compared to what the packages cost in general. Thats why the NBA has almost completely left network television.

 

Even the success of this year's Olympic ratings is only relative to the Sydney ratings which were consider disappointing.

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Nice to the see Marlins audience is up, but I don't think that the numbers back up the general statement that sports is golden for TV. The ratings aren't that great compared to what the packages cost in general. Thats why the NBA has almost completely left network television.

 

Even the success of this year's Olympic ratings is only relative to the Sydney ratings which were consider disappointing.

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I posted the article because the Marlins are bucking the sports trend. In general, other than MLB, other sports do badly on national TV and even on local TV. The Marlins are amongst the biggest comeback stories in all of sports in terms of TV.

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