Lessons and Wisdom of Micromanagement: Former NBA Commissioner Stern, ESPN exec Kosner Team Up with Firm
Original Article: Sports Business Journal, by Eric Prisbell, October 28, 2019
Sitting comfortably in his office high above Midtown Manhattan, David Stern chronicled his typical day at 77 years old — a 6:30 a.m. call to Tel Aviv; 11 p.m. text messages to a Kansas City-based startup founder; and in between a daylong procession of meetings he and investment partner John Kosner have with entrepreneurs — and then concedes the obvious:
“I thought I was stepping down so I could relax a little bit,” said Stern, who retired in 2014 after 30 years as NBA commissioner. “But it’s not happening.”
Not when Stern and Kosner — the 59-year-old former ESPN executive vice president, digital and print media — have formed a robust team three decades after they worked together at the NBA. The two are the leaders of Micromanagement Ventures, which provides counsel to and high-level introductions for sports tech startup founders while investing in and advising a boutique of 15 startups in their portfolio.
This isn’t a case of two accomplished sports guys dabbling in a cool side hobby. Their aim is ambitious: help shape the next generation of media consumption, enhance player health technology and catch the fast-evolving wave of sports gambling innovation.
“The single most exciting thing about all this is that sports always has been the place to demonstrate technology, and as technology expands, so much is possible,” said Kosner. “We have very high expectations, but there is a level of involvement and service throughout the portfolio that is different than if we just had set up as a fund, because it’s not a fund.”
They are personally — and financially — invested with the founders they align with. Each combined investment comes from their own money and is a minimum of $100,000. And they exhibit complementary skill sets: Stern, the grand, strategic thinker with a nuanced understanding of how the worlds of sports, entertainment and investment collide; Kosner, the media executive with a firm grasp of storytelling and the value of crisp messaging. Their contact list rivals that of almost anyone in the sports ecosystem.
Davyeon Ross, co-founder of ShotTracker — which provides in-game basketball analytics data to coaches, fans and television analysts and is one of Micromanagement’s investments — said they are stronger together than they would be apart, adding, “John understands David; he’s the translator. He is the yin to David’s yang.”
“In many ways,” added Aviv Arnon, co-founder of another investment vehicle, WSC Sports, “they complete each other.”
Consider when Stern and Kosner first met with Tel Aviv-based WSC Sports, which uses artificial intelligence to generate almost real-time highlights for sports leagues and media outlets, saving countless man hours. (“A game-changer,” said Bob Carney, the NBA’s vice president of emerging media.) For Kosner, with a background deep in digital sports highlights, the meeting in Stern’s office in May 2018 with co-founders Arnon and Daniel Shichman was eye-opening because he understood the boundless possibilities. For Stern, he acted as he usually does when introduced to revolutionary technology, marveling like a kid in Willy Wonka’s chocolate factory.
“I have a particular sensitivity to it,” Stern said, recalling the meeting, “because it renders asunder my life’s work of providing each of the NBA teams in 1982 three-quarter-inch VCRs, hooking those VCRs up to broadcast trucks, having a young person earn 25 bucks to FedEx the resulting two-and-a-half tapes to Secaucus (N.J.), logging tapes … and then digitizing them.”
Stern paused and smiled.
“And these bozos come in here and just say, ‘OK, that’s easy, we’ll give you virtual real-time with AI, computer vision, machine learning and everything else.’ I was, like, mesmerized by it. I told John, ‘You’ve got to see this!’”
‘Wonderful puzzle’
Founders of many of the portfolio’s startups paint Stern as having almost a Yoda-type persona, a revered elder statesman flush with wisdom yet fluent in tech speak. Stern’s curiosity has long been expansive; for years he would notoriously clip out stories in printed publications to save and read.
But to truly grasp his legacy as a visionary and why he is on the Mount Rushmore of all-time sports commissioners, consider the state of the NBA in the early 1980s: Teams were losing money, attendance was dropping and the NBA Finals weren’t far removed from tape-delayed broadcasts. During his tenure from 1984 to 2014, league revenue ballooned from $165 million to $5.5 billion; gross retail merchandise sales went from $35 million to $3 billion; and the salary cap rose from $3.6 million to $58.1 million.
He ushered in a golden era for the league when stars became recognizable by their first names — Magic, Larry, Michael, etc. — not just nationally, but globally. He oversaw the birth of playing exhibition games around the world, the creation of the WNBA and NBA Development League, NBA League Pass and NBA TV. He had such an eye for innovation that he once had the NBA All-Star Game taped for HD viewing so that it could be shown in Japan. The year was 1991.
“The beauty of my 30 years as commissioner, and six years [as general counsel and executive vice president] before that, was that it all was a wonderful puzzle, and the pieces kept changing that you had to learn about,” Stern said. “I made the first cable deal and then the satellite deal and then the Internet was invented — thank you — and then social media became a thing and — picture us as surfers — we were all surfing that. I stepped down and said, ‘Well, there’s no reason to stop learning.’”
Zack Weiner, co-founder of Overtime — a cross-platform startup focusing on high school and amateur sports video and short-form content — said Kosner possesses both the perspective of an insider as well as a disrupter, and says, “that is an extremely potent combination.”
Kosner received his indoctrination with Stern when he began a seven-year tenure with the NBA in 1987, serving as vice president of programming and leading the league’s broadcasting operations. When he left in 1994 to become vice president of TV programing and development for Sports Illustrated, Stern told him that SI’s television venture would be an abject failure. Kosner now jokes that whatever is below abject failure is what was achieved.
When Kosner left Sports Illustrated in 1996, Stern recommended him to ESPN President Steve Bornstein. Kosner spent 20 years at ESPN — in 2008, Sports Business Journal named him the most influential person in sports digital media — and starting in 2003 he oversaw ESPN.com. He helped build ESPN into a leading digital sports destination, pioneering online video with ESPN3, ESPN Motion and the WatchESPN app and forming valuable partnerships with Apple, Facebook and others. Toward the end of his ESPN tenure, Kosner would take meetings with startups including Overtime and ShotTracker that had been sent his way by Stern, who had become immersed in the tech world after retiring as commissioner.
Kosner helped build ESPN into a digital giant during a 20-year career at the company.
“The difficulties in starting a new company [now] are not the same as when we were trying to start ESPN.com,” Kosner said. “[Tech founders] were starting quicker. They would come and show me their prototypes for new products, which were done much faster than we could do them. Before I left ESPN, I began to wonder whether we would be able to keep pace. There was something about the way these companies could operate that made me think that things were changing.”
Kosner left ESPN in 2017 and joined forces with Stern early the next year, and what he’s seen since has only reinforced his belief that there are a “whole set of these companies that operate nimbler, quicker, faster and the pace of technology makes it hard — not impossible — but hard for big companies to operate.”
When asked about mistakes they’ve made in their few years together, Kosner said he makes them every day. Stern took a breath and wondered aloud about two companies that they declined to invest in (he declined to name them publicly). He’s rooting for both to succeed.
For them, investing and advising is about more than becoming enraptured with a product or new technology. It’s also about what they think of the founders as people. Stern said he used to feel he’d fall in love excessively with founders before realizing that there was a “method to my stumbling because John said, ‘Look what you’ve accumulated in the portfolio — the next-gen of television, the player-health issue and sports betting.’ Those are our three points of emphasis, which allows us, with good faith, to say to most of the companies that come over, ‘I’m sorry but we’ve looked at it and wish you good luck, but it doesn’t fit what we are doing currently.’
“Until the next one, which we will fall in love with and we’ll add another category. But that’s my story and I’m sticking with it.”
Stern advice
Several of the founders said they initially met Stern through venture capital fund Greycroft Partners, for whom Stern is a senior adviser. That was the case for Ross, the ShotTracker co-founder, who recalled a person at Greycroft recommending that he “talk with David.”
“David who?” Ross said.
“David Stern.”
“The commish?” Ross said.
At the 2016 NBA All-Star Game in Toronto, Ross spoke by phone with Stern, who in an hourlong conversation challenged, pushed buttons and interrogated Ross about why he thought he’d be successful. At the end of the talk came an abrupt pivot: Stern said, “I like you. You should come see me in New York.”
“He tries to punch you in the mouth the first second,” Ross recalled. “That’s just his style, right?”
It always has been. Ask Rick Welts, the president and COO of the Golden State Warriors who worked for the NBA from 1982 to 1999. Welts refers to it as Stern’s “Uncle David” mode. After bristling criticism would make Welts feel as large as an ant, frequent late-night phone calls would do just the opposite.
“He would talk about all the amazing things that were happening, how lucky we were to be a part of this league at this time, how the future was unlimited, and basically how the world was ours to conquer,” Welts said. “You felt you mattered to him, and his amazing leadership just oozed through the phone.”
Stern’s knack for offering blunt criticism is offset by his ability to infuse the founders with unbridled enthusiasm. Kosner is also adept at providing both — minus the Stern-heavy sarcasm and gentle needling. Ask the founders what feedback from Stern and Kosner has resonated the most and answers vary greatly.
“They are almost like parents — they are going to call you out when you need it and also pick you up when you need it. It’s very important to have that group in your life.”
Phil Wagner
Founder, Sparta Science
For Phil Wagner, founder of Sparta Science — which uses artificial intelligence to help identify potential injury risks — it’s the emotional support because the entrepreneur’s journey is a “very emotional one. You can be at your highest and lowest points almost in the same day. They are almost like parents — they are going to call you out when you need it, and also pick you up when you need it. It’s very important to have that group in your life to say, ‘Hey, that’s bull.’ There’s very few people, especially investors, where I get that direct black and white.”
For Miheer Walavalkar, co-founder of LiveLike — which combines live sports streaming, an immersive technology experience and a social community of friends — it’s sound advice. That could come in the form of line-editing a press release, or not allowing themselves to be spread too thin and going to too many events — Stern has told him, “You’ll go to the opening of an envelope” — or knowing that during negotiations, silence is your friend and even awkward silence is good.
For Arnon of WSC Sports, it was fashion advice from Stern, who criticized him after he wore ripped jeans once to his meeting and was once awakened by a phone call in the middle of the night from Stern, who had thought of someone for Arnon to meet.
Kevin April, the founder of SportsCastr, which enables fans to choose or become their own broadcaster for games, was impressed with how Stern and Kosner immediately grasped the concept when it was little more than a napkin idea.
Stern and Kosner go to great lengths to encourage the company’s founders to build relationships with one another, exchange ideas and perhaps integrate concepts. They believe in the technology as well as the founders, and that the future is blooming with possibility.
“When you can pick up the phone and you know your company has the goods, that makes all the difference in the world,” Kosner said. “Our credibility is all we have. We say, ‘You should really sit down with these guys, you will not be disappointed.’ Then they overdeliver on that, which is what happens.”
Sitting in Stern’s office, which is full of memorabilia and pictures that tell the story of the last four decades of the NBA, Kosner said their goal is to be the best advisers the founders can possibly have, because lots of other investors may have more money.
But as Stern quickly interjected, “No one has more fun.”
What to Anticipate in Sports Media’s Digital Transition Game
Original Article: Sports Business Journal, by John Kosner and Ed Desser, October 28th, 2019
Ten years ago, cord cutting was not a thing. Subs were still growing, Netflix was mostly DVDs by mail, Amazon was a retailer (there was no “TNF” streaming package), Disney was just Disney, Fox hadn’t launched FS1/FS2 or sold its RSNs, and Instagram didn’t exist. With this kind of industry change, what should we expect a decade from now?
Sports betting is not only legal in many states, but gambling via mobile devices is pervasive. The result: Betting volume and users have exploded. Placing a sports bet is as easy as ordering an Uber, integrated into apps that sports fans already use regularly. As a result, many have at least a $5-$10 wager on the day’s events.
Taking advantage of this new demand, sports media platforms (some now owned by tech companies) are distributing an ever-increasing number of events from all over the globe, in multiple languages and with increasing customization (choose your announcers, pick your statistical overlays from official league advanced data). The model is triple-revenue stream — either pay TV or DTC with advertising — plus a cut of “the action!”
Enabling this boom in coverage for all but the biggest events, sports networks have embraced autonomous live-game production, moved the “TV truck” into the cloud, crowdsourced announcers and rediscovered live international events and once-niche sports that can be scheduled outside of prime time, creating 24/7 availability.
Sports is now available to fans “Live Live,” via 6G and 1-gigabyte pipes in sub-second latency, dramatically improving today’s non-synchronous experience. Social media already enabled the “virtual” sports bar, but now we can watch a synchronized feed with our friends around the globe simultaneously, placing prop bets and participating in chats and polls.
You needn’t turn on your TV to experience all this. Just put on some AR (Augmented Reality) glasses. Transform a wall into the biggest of big screens. At an event, the glasses offer an unlimited selection of information and services— from the venue and worldwide for an immersive experience.
Indeed, all of us — fans, teams and players — are now content-producing platforms, placing bets, choosing our experiences, transacting in multiple ways. Everyone sports a digital avatar, themed by team, league, city or player affinity. Twitch and YouTube have transformed today’s player fan clubs by offering IRL (In Real Life) live feeds from virtually every elite athlete on Earth. Everything is available for a micropayment or a subscription, similar to video games today.
The impact of gaming will be felt everywhere. Fans will expect more frequent software upgrades similar to the meta changes in esports. Today’s offseason “competition committee” rules changes will be moth-balled, as major leagues adopt swifter in-season rules changes to address fan and player feedback. The biggest changes: faster games and an emphasis on real-time information, especially involving highlights.
Nearly all sports (except Olympics, NCAA Tournament) come to market re-thought and re-structured for a new world where rights holders will be anxious to grow revenue while simultaneously serving the now thirtysomething “Nevers” who still don’t buy traditional TV, giving rise to a hybrid (linear and streaming) model. Today’s pay TV bundle becomes even more sports-centric, with fewer households paying significantly higher fees for major league programming. Smaller sports have moved to OTT, combining direct access to small thriving communities, merchandise and events, likely on a platform designed and managed by a tech giant. What technology gives, it also takes away, as everyone struggles to find solutions to rampant digital piracy.
Rights grants for the biggest sports have become global, favoring the planet’s two most popular ones, international football (aka soccer) and basketball. We expect esports to grow, with its biggest events televised, but most of its distribution is not via TV. In the U.S., NFL and college football will remain major factors, in part because of their popularity with bettors.
Ironically, the busy, graphic-heavy scroll of today’s sports TV networks will become pristine, fully immersive viewer experiences. No more crawls, pop-up “toast” or “elevators,” and burn-ins. Tomorrow’s TV experience transforms the viewer to “being there.” If in need of scores or stats, fans can easily add them locally or via a second (or third) screen, without cluttering and distracting from the vivid 16K viewing experience.
Unlimited bandwidth will facilitate virtual channels, replacing traditional linear ones. The experience will be more like a multiplex theater: No longer will an event be truncated or joined in progress. Every event will be shown complete and integrated with its related pregame or postgame show. Overtime won’t abridge the next live event. Fans will be better served, provided personalized curated viewing and funneled to the next event just like an auto-start video clip.
Not quite nirvana, but close: Tomorrow’s sports experience will be vastly improved, integrated, enriched and customized in these ways and many more. The changes are already starting, and we can’t wait!
Ed Desser is president of sports consulting firm Desser Media Inc. (www.desser.tv). John Kosner is president of Kosner Media LLC, a sports and digital consulting company. Together they ran the NBA’s media operations in the 1980s and ’90s.
Will Tony Romo Become Biggest Free Agent in TV Sports History?
Original Article: Front Office Sports, by Michael McCarthy, August 29, 2019
Tony Romo of CBS Sports could potentially become the most sought-after free agent in sports TV history.
With the new 2019 NFL season a week away, talks on a contract extension between Romo and CBS have stalled with little progress, said sources.
Romo’s original three-year deal with CBS expires after this season. That’s raising the possibility Romo will table negotiations to avoid distractions, play out his rookie contract, then hit the open market in 2020.
During CBS’ NFL preview day, Romo declined to address his contract negotiations except to tell Front Office Sports: “I love football. I love working for CBS. I love the fact that I get to be an analyst doing football games.”
Odds are still very good the former Dallas Cowboys quarterback re-ups with CBS, said TV insiders. The network loves him; he loves the network. The 39-year old Romo is close friends with play-by-play partner Jim Nantz, sharing a mutual love of football and golf.
During CBS’ upcoming 60th NFL season, the network’s No. 1 team of Romo, Nantz, and Tracy Wolfson will get to call the best games from the AFC.
With CBS and NBC swapping spots in the Super Bowl rotation, Romo is also poised to broadcast his second Super Bowl after the 2020 season. CBS Sports Chairman Sean McManus said he expects to keep Romo on the network for a long time.
But stranger things have happened. Romo’s reps at Creative Artists Agency are seeking a hefty raise to $10 million annually from his current $4 million-a-year pact, said sources.
Legendary NFL analyst John Madden ended up working as a color analyst for four networks during his TV career: CBS, Fox, ABC and NBC. If Romo becomes the first sports analyst to earn an eight-figure contract, he’d eclipse even Madden, who earned $8 million during his 1990’s heyday, according to The Ringer.
That would also make Romo the highest-paid NFL analyst currently on TV. Troy Aikman, Fox Sports’ No. 1 game analyst, makes around $7.5 million per year. Before returning to the Oakland Raiders, Jon Gruden earned over $6 million a year from ESPN to call Monday Night Football.
CBS is willing to give Romo a substantial raise to stop him from testing the free-agent waters, according to Andrew Marchand of the New York Post. CBS also has the right to match competing offers for its star analyst, he wrote.
The risky decision by McManus and CBS Sports President David Berson to install the TV rookie over veteran Phil Simms as CBS’ No. 1 NFL analyst in 2017 has paid off “brilliantly,” said John Kosner, the ex-ESPN executive turned president of Kosner Media.
After a second regular season together, Romo and Nantz called a virtually flawless telecast during the Patriots thrilling 37-31 overtime win over the Chiefs in AFC Championship Game. If CBS doesn’t pay Romo, another bidder will, Kosner predicted.
“Tony Romo is an exceptional, expert analyst working on America’s most popular TV sport. Considering how much networks and advertisers are paying — and will pay — for NFL live game rights, his ask is not outlandish,” Kosner said. “He is a reason to watch. His chemistry with another exceptional talent, Jim Nantz, is special and unique as well. If CBS were to pass, someone else would meet his number.”
The rest of the sports TV industry is watching closely. If Romo pulls off an annual eight-figure payday, it would “set a new paradigm,” said a source, enabling other analysts to ask for more money.
“Romo’s worth more than $10 million,” that source said. “Look, 88 of the top TV broadcasts last year were sports. Tell me why Ryan Seacrest is worth $20 million a year? But a No. 1 NFL analyst isn’t? Live sports covers all the bills.”
Still, other TV insiders are doubtful Romo will reach the eight-digit mark. Instead, they think the $10 million figure is more of a negotiating gambit. When all is said and done, they think he’ll end up roughly doubling his pay to the $7 million to $8 million a year range.
“I do think he’ll get a serious increase. But frankly, he’ll only get $10 million if somebody else is willing to pay him $10 million,” said another source. “And I think that’s unlikely.”
Romo’s been nicknamed “Romostradamus” for his uncanny ability to predict plays and coverages on the field. He’s such a unicorn in that respect that even if he gets the big payday, it won’t change the landscape, warned Patrick Crakes, a former Fox Sports executive turned independent media consultant.
“The spread/gap between the top flagship analysts and everyone else grows,” Crakes said. “He’s his own thing.”
During his 14-year career with the Cowboys, Romo banked $127.4 million in salary, according to Spotrac.com. Romo’s still a young man. There’s an outside chance he even walks away from television to pursue other opportunities.
Romo told Richard Deitsch of The Athletic he’s received “legitimate offers” to return to the NFL. Gruden, for example, attracted a monster 10-year, $100 million deal to leave ESPN’s Monday Night booth and return to the league as coach of the Oakland Raiders.
Marketers and even Hollywood have come knocking too. Romo has endorsement deals with Corona, Skechers, and Ralph Lauren’s Chaps brand (The young husband and father appears with his wife and kids in Chaps ads).
Romo’s been approached to host entertainment shows, ala Michael Strahan of Fox Sports, said sources. There’s even talk the scratch golfer might try his hand on the PGA Tour after winning the American Century celebrity golf tournament for the second year in a row.
Yes, Romo loves CBS. But he’s not a network lifer like Nantz. He’s a businessman. Don’t forget, Madden played CBS, ABC, and Fox off against each other so expertly, that he made more than any active player in the league at the time. Many younger athletes/TV analysts like Romo don’t like to negotiate contracts once their “season” starts, viewing it as a headache.
Waiting in the wings as potential Romo bidders in 2020 are ESPN and Fox. Not to mention deep-pocketed tech companies like Amazon and Google seeking NFL game rights during the next round of negotiations in 2021-2022. “$10 million’s a rounding error for these companies,” said a source.
If CBS gives Romo $10 million a year, Kosner would want a “commitment” from their superstar analyst that he’ll continue to work on his TV game over the next five years.
“His play call predictions in the 2024 AFC Championship will hopefully be on par with what we saw at during the New England-KC game,” Kosner said. “I would probably look to add him to other programming and gain his commitment to work with our advertisers. Find more ways to make my investment pay without overusing him.”
Romo laughed off the “Romo-mania” that made him one of the biggest stars at Super Bowl 53. Leading up to the big game, the sports media swarmed him more than most of the players.
“I don’t know what you’re talking about,” he quipped. “I’m just trying to make sure I don’t say the wrong thing.”
John Kosner on WSC Sports in The Athletic
Original Article: The Athletic, by Daniel Kaplan, August 21, 2019
TEL AVIV, Israel — This year, about 1.6 million official sports highlights viewed on platforms ranging from Twitter, NBA.com to Instagram, to name only a few, will be generated by a small Israeli company that deploys artificial intelligence to do a job that once took teams of video editors.
The story behind that company, WSC Sports, is almost as wild, if not more so, than many of the plays its technology now delivers to fans around the globe.
“My initial thought was, ‘I’ve heard this pitch many times;’ I was skeptical,” said Bob Carney, the NBA’s vice president of emerging media, recounting his 2014 meeting with WSC when he handled digital for the NBA’s D League (now the G League). “Their Point Deck was incredibly poorly designed.”
AI was just coming into vogue, so business executives were used to hearing from obscure technology firms about how their software was the one. WSC had just branched into highlights from coaching technology, so that served as another negative. Nevertheless, Carney let them try a finished D-League game as a test and what came back shocked him; “eyebrow-raising” is the phrase he deployed.
“It was a pretty remarkable transformation from having one piece of content that was two minutes in length that was being manually created to 20-plus pieces of content per game that were being automatically created,” he said. Within a few years year, the NBA had hired this small startup with less than a half dozen employees to handle league-wide highlights for not just G League, but WNBA and then the NBA.
Those 1.6 million highlights are double the 2018 total, and by the company’s estimate 10 times the content human editors could produce.
WSC’s technology allows a league like the NBA, for example, to identify each dunk by a French-born player and immediately distribute those plays to French social media, or recognize cues like crowd noise or game moments to generate a highlight, which can be a few seconds or few minutes in length. The system actually learns what a highlight is.
Clients now include the PGA Tour, Cricket Australia, MLS, Bundesliga, Bleacher Report, Stadium and even esports. That list is hardly exhaustive because many leagues don’t give permission for WSC to say who they work for when there is not a sponsor relationship.
That’s why WSC, which says it works in 14 sports including surfing, steadfastly declined to comment on what is likely their biggest client, the NFL. That bit of information came from John Kosner, former executive vice president of digital media at ESPN, and a media consultant who advises WSC.
“They do all the NFL video highlights,” Kosner said. The NFL did not reply for comment.
Located about two miles from the Tel Aviv beach on the 28th floor of a black office tower, WSC is expanding rapidly with now over 100 employees. It just added 1,600 more square meters of office space, a 133 percent increase.
A half decade ago, it was largely just the four co-founders, self-identified Israeli “geeks.” Tech and NBA acolytes growing up, they were so smart in high school they qualified for an Israeli military program that sent them to school for four years instead of the front lines (they followed that up with six required years behind the scenes in the military). Almost all Israelis begin three-year military service when they turn 18.
“Our guys (in the military) were in charge of video solutions, video streaming, video encoding and stuff like that,” said co-founder Daniel Shichman, seated in a WSC conference room, the Mediterranean glittering in the distance. “I was in charge of wireless telecommunications systems. We have Jewish moms, so they wanted us to go and, you know, work as an engineer, go to Cisco, Intel, IBM.”
Israel is a tech hub, with the country of eight million third behind the US and China in number of listings on NASDAQ. But Shichman and his friends were basketball junkies, so following mom’s advice and taking the steady paycheck didn’t appeal (Ironically IBM’s name adorns their office building).
Shichman said as a teen he would stay up until 3 a.m. to listen to NBA games. In the main hall of the headquarters hangs Larry Bird and Magic Johnson jerseys. Not signed or special memorabilia; off the rack jerseys.
That youthful spirit is alive elsewhere in the office, which boasts a full-scale Jorkyball court. A French game played in an enclosed 33-by-16-foot enclosed court that pits two competitors who can only kick the ball (not dribble or control), at the two goals. Think of a cross between soccer and racquetball, and that’s what WSC employees do to blow off steam.
David Stern, the former NBA commissioner and adviser to WSC, calls them the crazy Israelis and still harangues co-founder Aviv Arnon for wearing torn pants to their first meeting.
“My girlfriend chose the jeans. It wasn’t me and I don’t remember why. But my other pants were off-duty that day,“ Arnon recalled of the New York meeting, where he admits he was in awe of meeting Stern. “I actually hid it for most of the meeting, I was able to like, I didn’t show, it wasn’t a big rip and tear. But when he walked around the table at some point and he saw it and then I was gone. That’s it. He hasn’t stopped talking about it.”
Shichman even jokes if the company goes public, they will make Stern wear a pair of shredded jeans. But Stern calls them crazy for more than ripped fabric. Beside the gall to disrupt the traditional and time-consuming video editing system necessary in the past to show highlights, they will do just about anything to get a meeting and woo a client. Arnon spends half his time on the road, and still flies coach. Asked wouldn’t it be better to fly business and arrive better rested, he replied, “It’s the hustling mindset.”
“Their system is smart… it’s constantly learning and improving itself.”
Once Shichman and Arnon were at the Consumer Electronics Show in Las Vegas and waited all week to get a meeting with Dan Gilbert, the Cleveland Cavaliers owner and now a WSC investor. (Disclaimer: Dan Gilbert holds an ownership stake in Courtside Ventures, which in turn holds a minority interest in The Athletic.)
The last night they were told no, but kept pushing. Gilbert was flying to Texas the next morning and offered them 15 minutes alone on his plane. They took it, got the entire 75-minute flight, and after landing bought tickets to get back to Vegas.
Asked if they got what they wanted, Shichman replied they only wanted to hear Gilbert’s view of the business. Of course it takes more than sleep-deprived bravado; the technology works.
“Most software systems that do this kind of work, are fairly static, meaning you have a tool and you can identify clips and distribute them, but it’s the same every time,” explained Kosner, the media consultant. “Their system is smart… it’s constantly learning and improving itself. So you say for instance, ‘OK, show me the best plays from Kawhi Leonard and Kevin Durant from the fourth quarter of Game 2 of the NBA Finals.’ And within a couple of minutes, it automatically spits that out, prioritizes by their algorithm. And then there are other little magical things.”
Shichman, Arnon and their partners — Hy Gal and Shmulik Yoffe — initially did not choose highlights. After the military they developed scouting technology for basketball (thus the WSC stands for World Scouting Corp). They decided the finite number of teams limited the business.
Then Shichman saw Dwyane Wade with a great block in the 2013 NBA Finals and tried to watch the highlight. “And I only found like a very bad version, pirated, low-quality version on YouTube,” he explained. “And then we said, it doesn’t make sense that now we’re watching, they’re very low quality, we’re not enjoying it, took us time to find it. The NBA doesn’t get anything for us watching that clip.”
The next frontier for WSC is gambling. The company is in discussions with betting houses to deliver highlights to gambling apps. The rights belong to the leagues, which would first have to sell the clips. But within a year, WSC expects to have a new client base.
The company counts several major-league owners as investors in addition to Gilbert. HBSE Ventures, the venture capital fund of the owners of the Philadelphia 76ers and New Jersey Devils, invested earlier this month in a $23 million Series C round. The Minnesota Vikings owners, the Wilf family, invested in 2016 through their WISE Ventures.
“WSC Sports has been a great fit in the portfolio,” Brian Cargo, who manages WISE’s portfolio, said in a statement emailed by a Vikings official. “We have been impressed by Daniel’s leadership, the consistent growth of the company over the last few years, and continue to support their on-going success.”
So why did an Israeli startup, and not say a Silicon Valley one, come to have such a heavy presence in this market? Essentially, WSC built a better AI mousetrap.
“We’ve got a significant amount of experience, further than anybody else, particularly in sport,” Arnon said. “And we’ve trained the software to identify those indicators, those key moments that are more interesting or less interesting, we teach the system to rate how great players are, but also to identify what is the play, and how to edit it. And to do that, by regular software…would have too many variations.
“Well, with machine learning,” he concluded, “you can, you can basically give it the insight that… an editor would, and then figure out all those cues in the visual, audio, in the statistics, and mash it all together to identify, ‘Oh, this moment, is a great moment.’”
Ask the experts: SBJ asked John Kosner what sports story he was following
Original Article: Sports Business Journal, by John Ourand, August 19, 2019
Every summer as I head out on vacation, I ask some of the smartest minds in sports business to help write this column. They always answer the same question: Name the most intriguing sports media story to follow over the next four months. Each year, this column serves as a personal editorial calendar, identifying stories that I plan to report and write about through the end of the year.
AFFILIATE DEALS
“This year’s big challenge in sports media lies with the ability of over-the-air TV broadcasters to renew carriage agreements in a timely manner with the top distributors, like the AT&T/DirecTV-Nexstar/Media General dispute that could last beyond the start of college and professional football. This has a cascading effect on sports media as ABC, CBS, Fox and NBC all have affiliated stations with Nexstar that carry premium sports content. Further, an even larger fight in this space is lurking around the corner when Sinclair’s TV station carriage deal with Dish/Sling TV expires at the end of the year. The opening shot in this battle was fired two weeks ago when the 21 RSNs Sinclair intends to purchase went dark on Dish/Sling TV.”
Matt Cacciato Executive in residence, director, masters of sports administration program, Ohio University
THE EVOLVING DIGITAL LANDSCAPE
“I will be watching stories about personalization of sports media for various audiences. Do sports fans want to hear influencers ‘narrate’ live games? Do they want long- or short-form highlights instead of (or in addition to) live games? Do they want ‘Twitch-like’ engagement for live sports or real-time highlights? How will mobile betting be integrated into the live game experience? There are so many amazing tech platforms trying to seize on these experiences. Which will rise above the rest, and which league or sport will embrace this change?”
Leslie Gittess CEO, founder, Blue Sky Media
RSNS
“I’m interested to see what Sinclair has in store for the RSNs. The RSNs are a cash-flow play for Sinclair, as opposed to a growth play. Given the low purchase price, the RSNs will need only 2%-3% annual growth to reduce debt and generate cash flow. I assume that Sinclair will focus on the equity revenue share component in team rights deals to mitigate significant subscriber erosion issues, and I won’t be surprised if they explore sports wagering as a new revenue stream. Look for how Sinclair packages its local stations with the RSNs to create leverage in driving revenue from retransmission consent in distribution negotiations and more ad revenue from political advertising next year.”
Dean Jordan Managing executive, properties/media, Wasserman
NEW FOX
“I am excited to see the ‘New Fox’ in action this fall. There’s never been a broadcast network with the flexibility to focus on sports and live events exclusively. Now there’s Fox — and they have two NFL packages, the baseball playoffs and World Series, half-packages with the Big Ten, Pac-12 and Big 12, Big East basketball and Friday night WWE. Next year brings the Super Bowl, XFL and the first half of NASCAR to the network. That’s an excellent rights portfolio. What are they going to do with that? Can they make it bigger than the sum of these great properties?”
John Kosner President, Kosner Media
NFL STORYLINE
“We may be entering the ‘Age of the Black Quarterback.’ Black quarterbacks are on the verge of becoming the faces of the NFL, and of redefining the position. The league’s reigning MVP, Pat Mahomes, is a black QB. So is the No. 1 draft pick, Kyler Murray, and the NFL’s highest-paid player, Russell Wilson. Black quarterbacks are some combination of the leaders, saviors, thrillers, future of multiple franchises — from Cam Newton to Deshaun Watson, from Dak Prescott to Lamar Jackson to Dwayne Haskins. And then there is one black signal caller, Colin Kaepernick, who is out of football right now but still looms large as an emblem of social justice in sports. What will become of him?”
Kevin Merida Senior vice president, editor-in-chief, ESPN
DIRECT-TO-CONSUMER
“We’ve been spending a lot of time thinking and talking about the implications of the ever-increasing role that OTT platforms are playing in sports media. Virtually all of the incumbent networks have their own offerings and strategies (e.g., ESPN+, B/R Live, NBC Sports Gold, CBS All-Access, etc.), while “pure play” companies like DAZN and FloSports have emerged as serious bidders, and the digital behemoths like Amazon, Facebook and YouTube continue to loom large. This is going to have serious implications for the sports business, as it will undoubtedly impact consumer viewing (and buying) habits, rights fees, etc. It’s a story with many angles that we intend to focus on this fall and beyond.”
Doug Perlman CEO, Sports Media Advisors
SPORTS GAMBLING
“I’m most curious about how media, in all forms, will be impacted by, and will impact, sports gambling. My main question: How will the media incorporate (or not) sports betting into their programming? Will we see an increase on the reporting of sports betting lines? What networks have the appetite to carry advertising from sports gaming enterprises? We saw a few years ago how the fantasy ads became dominant. I also will be monitoring to see how live commentary handles betting lines in real time. Could this new commentary impact coaching decisions and player performances?”
Kenneth L. Shropshire CEO, Global Sport Institute; Adidas distinguished professor of global sport, ASU; professor emeritus, Wharton School
John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ and read his twice-weekly newsletter.
The New A.A.F. Is Betting on Football, and on Betting
Original Article: The NY Times, by Joe Draper, February 8th, 2019
There are a multitude of ways to lose money in sports, and historically one of the most dependable ways is to start a professional football league. Charlie Ebersol knows this better than most. He had a front-row seat when his father, Dick, the longtime NBC executive, was a partner with the XFL for its only season in 2001.
Still, Charlie Ebersol, a co-founder of yet another new league, the Alliance of American Football, is bullish on his chances to beat the market. And he argues that timing and technology are on his side this time.
The A.A.F.’s 10-week season opens Saturday and ends before the N.F.L. draft. This is by design, Ebersol said.
“It would be an act of insanity to try to compete with the N.F.L.,” he conceded. Instead, Ebersol intends to fill a post-Super Bowl vacuum and feed a viewing audience that he and his partners believe has an insatiable appetite for football.
“Two hundred million watch college and pro football compared to the 130 million combined that watch the other major sports,” Ebersol said. “We don’t need to get all of those football fans to tune back in, but I like our chances of getting a significant chunk of them.”
To do so, the A.A.F. is working to make its games easy to find. In addition to a deal to place some of its games on the NFL Network, the A.A.F. has agreements with CBS Sports’s networks, TNT and Turner’s B/R Live streaming service.
But the A.A.F. business plan goes beyond football and television; it is hoping to land in a right-place-right-time moment in which sports betting is now legal and expanding in the United States. Eight states already offer gambling on sports contests, and by next year, sports betting could be legal in at least a dozen more.
Anticipating and embracing interest from serious and casual gamblers, the A.A.F. has invested heavily in the technology and platforms that can provide data in a blink of an eye, all in the hope of transforming a minor league football broadcast into an interactive experience. Among the A.A.F.’s early investors were venture capital firms like Peter Thiel’s Founders Fund, media companies like the Chernin Group and the gambling and entertainment powerhouse MGM Resorts International.
MGM executives said they were most taken by the A.A.F.’s app, which can provide a host of data in milliseconds. The information arrives so fast, in fact, that the league and its partners said it could eventually allow in-game betting on play outcomes — like pass or run — and a host of other propositions.
“It’s a technology play,” Scott Butera, MGM’s president for interactive gaming, said of the A.A.F. “These specialty leagues will be relevant to sports betting. We think what they are doing is portable to other sports in terms of streaming, watching and making it an entertaining customer experience.”
Ultimately, however, the A.A.F. will be judged by the quality of its football. To that end, a founder of the league, Bill Polian, a former general manager of the Buffalo Bills and a Pro Football Hall of Famer, has put together a league office of seasoned football people, including the former N.F.L. players Hines Ward and Troy Polamalu. The league owns all eight of the teams and has installed big-name veteran coaches — Steve Spurrier, Mike Singletary, Dennis Erickson, Mike Martz — in cities like Orlando, Memphis, Salt Lake City and San Diego.
The league will lean on some gimmicks: There will be no kickoffs (teams will start on their 25-yard line instead) and no point-after kicks (only 2-point conversions allowed). And a so-called sky judge will keep watch over the action, empowered to correct officiating errors immediately.
But some other innovations — no TV timeouts; completing games in two and a half hours; tickets priced no higher than $50; three-year, $250,000 contracts to hundreds of players — have raised questions about the league’s long-term economic viability.
“There’s always been a belief that there’s room for spring football because of the game’s popularity,” said John Kosner, a longtime ESPN executive who now runs his own company, Kosner Media. The problem, he noted, is “no one has pulled this off before, so it’s not trivial what they are trying to do.”
Kosner said the A.A.F.’s timing — just as sports betting tries to move into the mainstream of American culture — is fortuitous, since the amount of energy and venture capital investment available in sports right now is “unparalleled in my career.” He also suggested that Ebersol’s experience as a television and film producer would come in handy.
“Charlie is smart, organized and patient, and best of all, he is a good storyteller,” Kosner said. “He can make the fans care about the game.”
Seventy percent of the players signed so far have played in the N.F.L. in the past 18 months, a group that includes quarterback Aaron Murray (Atlanta Legends) and running back Trent Richardson (Birmingham Iron). All have been signed to a three-year base deal that includes not only the $250,000 salary but also what the league calls engagement bonuses. Those are based in part on their contributions to the community.
And because the season is so short, all will be free to go to camp and sign with N.F.L. teams.
“We are not trying to be sexy,” Ebersol said. “We just need to block and tackle on the field as well as off it.”
For now, he is preaching patience.
“This is going to take five to seven years, and there’s going to be empty seats at first,” Ebersol said. “I caution everyone that this is not going to be an overnight success. But we will succeed.”
John Kosner & Ed Desser in SBJ: “Stream a Little Dream: Declining sports rights? We think not.
Original Article: Sports Business Journal, by Ed Desser and John Kosner, January 14, 2019
From the beginning of sports media, new technology has enabled consumption. Early live sports TV consisted primarily of weekend events on the three national broadcast networks and club/school events on local stations and syndication. Then, widespread cable and its dual revenue stream opened the floodgates, introducing multiple 24/7 national sports networks and RSNs, delivering thousands of additional games and ballooning sports revenue (and player salaries).
In the last two decades, digital technology multiplied sports channels and ushered in multi-game subscriptions like Sunday Ticket and League Pass. Meanwhile, the internet made worldwide scores, news and highlights instantly accessible, mobile untethered viewing, and social media-enabled “virtual” sports bars.
Today, streaming technology is changing the sports media paradigm again, like cable did four decades ago. The incumbent networks (e.g., ESPN, Fox) remain well-positioned, but the digital tech titans have entered the field of play, so far focused on shorter-term rights, experimentation and non-exclusive grants (e.g., YouTube has regional rights to some MLS teams and virtual MVPD cousin YouTubeTV has become a major sponsor of the World Series and NBA Finals). Amazon bought EPL and “Thursday Night Football” rights, and Facebook has daytime MLB games. Among legacy players, ESPN+ has daily MLB and NHL games, MLS Direct Kick, and UFC. Turner’s B/R Live includes Champions League, 65 NCAA Championships and, intriguingly, partial NBA League Pass games.
While the techs have the money, recognize the importance and therefore have an interest in live sports, they are not yet willing to spend massive amounts of it for major exclusive rights packages. There are at least five reasons:
1. Most live sports viewing exists on linear TV and none of the tech giants possess that asset yet (though Amazon has shown an interest in buying some Fox RSNs).
2. The traditional incumbents continue to have substantial budgets to continue buying these rights based upon broad distribution, high subscriber fees and large advertising income.
3. They have the motivation to do so: Existing sports networks are dependent on exclusive sports rights because their very identities remain directly tied to sports TV. In addition, as broadcast networks get priced out of the top entertainment programming by Netflix, Amazon, Apple, HBO, etc., sports is even more important as must-have programming to stay in skinny bundles.
4. In an offense/defense strategy, linear players are expanding their own streaming and direct-to-consumer capabilities to better serve fans and attempt to keep the tech goliaths at bay.
5. The techs view sports acquisitions more as R&D expenditures than their primary business. There is not a proven digital business model that generates the kinds of live sports revenue (and viewership) that legacy linear media still can.
Therefore, as NFL, NHL, AAC, NASCAR and NHRA rights are soon negotiated, the traditional networks will continue to provide substantial payments, and wide distribution, the twin media goals of most sports enterprises. The question remains: Will today’s tech dabbling prove to be just an appetizer, or will they stay on the sidelines when the big bidding begins? We expect to see the following:
• Traditional linear players will keep most of the major packages, generally at higher prices (the rollout of legalized sports gambling will provide new rationale), but with some significant modifications, such as leagues carving out streaming rights, or creating a new package of events which are excluded from TV.
• The rich will get richer and those properties in the middle (e.g., NASCAR) will get squeezed.
• New digital packages, like MLB on Facebook and NFL “TNF,” will be created/expanded specifically for streamers. Unlike cable, which largely replaced broadcast as the primary platform for live sports, digital packages will expand and supplement, not replace, TV over the next contract cycle.
• Amazon, YouTube, Facebook and Twitter will expand their sports programming offerings, including through acquisition of events they can distribute worldwide, such as tennis, volleyball and esports.
• New entrants will also take their piece of the programming pie, such as FloSports buying up Olympic sports and DAZN taking more boxing.
• More sports will super-serve their biggest fans through targeted niche streaming offerings like NHRA All-Access and PBA Xtra Frame. NBA League Pass is a truly global, robust offering customized for different territories.
• Most sports fans will continue to demand a wide selection of major sports, so expect them to retain the TV “bundle.” Most would not be satisfied just getting certain sports/matches, as Amazon Prime or Netflix subscribers can be satisfied with a single SVOD package featuring a wide range of entertainment programming, nor would it be cost-effective to buy multiple packages. Pay attention to sports-focused Virtual MVPDs like YouTubeTV and FuboTV and sports-specific bundles.
• Smaller sports properties, which don’t generate meaningful rights revenue, will transition their events to streaming platforms, developing direct customer relationships, reducing TV production costs, and improving programming hours, scheduling, and net revenue, but sacrificing viewership potential.
• Tech players will consider buying traditional linear sports media platforms (e.g., New Fox, Fox RSNs, CBS) to gain entry to the major league sports club.
For almost 50 years, critics have predicted the end of the sports TV rights bubble. We’re still waiting.
Ed Desser is president of sports consulting firm Desser Media Inc. (www.desser.tv). John Kosner is president of Kosner Media LLC, a new sports and digital consulting company. Together they ran the NBA’s media operations in the 1980s and ’90s.
At The Athletic, a Hiring Spree Becomes a Story in Itself
Original Article: The NY Times, by Kevin Draper, August 24, 2018
The Athletic, the hyperlocal sports website and app, is growing quicker than any sports media company in recent memory. This month, hardly a day passes without the announcement of a new hire. Or four.
A football writer in New Orleans. A baseball writer in Cincinnati. An N.B.A. columnist and a college basketball editor.
Just 10 months ago, when The Athletic celebrated its second birthday, the subscription-only website had 65 editorial employees in 10 markets. By the time the N.F.L. and college football seasons open next month, it will have more than 300 editorial employees, and sites focused on 38 markets.
Backed by $28 million in venture capital, The Athletic long ago moved past simple questions like what to cover and where, to more existential ones: Can its rapid growth be sustained? Will it eventually make a profit? And why do its investors believe it will sail counter to the prevailing winds in media?
Those answers are not easy to find, but the business plan at The Athletic is largely a bet that it will emerge as a Netflix-like solution to the decline of local sports coverage by newspapers decimated by budget cuts, and that it could eventually win over millions of subscribers. Its current hiring surge, then, is more a doubling down on that bet than a tangible payoff on it.
Daniel Leff, the founder of Luminari Capital, which has invested in The Athletic, argued that the website is already worth hundreds of millions of dollars, and the only remaining question presently is how large it will grow. “This is a company that has already achieved escape velocity,” he said.
Without subscription figures or internal financial reports, Leff’s optimism is impossible to validate. Media companies like Netflix, Spotify and Sirius XM have tens of millions of subscribers paying monthly for their services, but few journalism companies approach those numbers. The New York Times leads newspapers with 2.9 million digital-only subscribers, and several magazines have circulations in the millions.
Taylor Patterson, a spokeswoman for The Athletic, said the company has “well over” 100,000 subscribers, each paying about $5 each month. Leff, the investor, said it had “many multiples” of 100,000.
Its recent expansion has generated considerable skepticism, however, especially as the behemoths of media are merging and acquiring to achieve greater scale; other venture capital-backed midsize media companies like Buzzfeed and Vice are struggling to meet revenue targets; and local news organizations are withering.
Brian Grey, who was the chief executive of Bleacher Report when the sports media company raised $33 million in investment capital and later was acquired by Turner Broadcasting for around $200 million, wonders if the Netflix or Spotify comparisons are accurate. “Video and text are two different animals,” he said. “The subscription and consumer willingness to pay for content may not map completely.”
But to Leff, small-bore questions about expansion or profitability are missing the forest for the trees. “Just to get to 100,000 subscribers is a huge endeavor,” he said. “They may or may not need additional capital to do it, but if so, so what? There are a multitude of capital sources that want to put money into this company.”
When asked if The Athletic was already worth the $200 million Bleacher Report was acquired for six years ago, Leff responded: “Absolutely. We wouldn’t take that.”
Still, The Athletic has received heavy criticism from the industry it hopes to dominate. In several markets, The Athletic has hired multiple writers away from the same newspaper, decimating the sports staffs at papers like The San Jose Mercury News and The Atlanta Journal-Constitution, among others.
The Athletic’s initial practice of hiring mostly veteran writers without posting jobs publicly also has perpetuated homogeneity in an industry that is overwhelmingly white and male, leading to criticism. Since then, The Athletic has begun hiring more women and people of color, and the company participated in the recent National Association of Black Journalists convention in Detroit.
At the same time, with the news industry under stress and as some have come to view supporting local journalism as a moral imperative, one of the founders of The Athletic, Alex Mather, told The Timeslast fall that his company would “wait every local paper out and let them continuously bleed until we are the last ones standing.” (Mather later apologizedfor his tone.)
John Kosner is a former longtime ESPN digital media executive who oversaw ESPN’s failed attempt at creating local sites almost a decade ago. He cautioned that while The Athletic is off to a promising start, it would need to “sell an awful lot of subscriptions to become a big profitable enterprise.”
But he also argued that The Athletic may be different from Netflix and Spotify in a crucial way: The Athletic’s first subscribers were avid fans who already spend thousands of dollars each year on sports. To get to its goal of millions of subscribers, Kosner warned, it eventually will have to attract casual fans, a far more difficult proposition. Netflix and Spotify had the opposite challenge; both found it hard to attract subscribers initially because they had small content libraries, but they grew quickly as they added more titles, a concept of steady, relentless growth known as the flywheel effect.
“Yes, you can go into new markets and get sports fans,” Kosner said of The Athletic’s recent growth. “But it may not be as easy to continue to grow in these markets than it is to get started.” He predicted the end goal for The Athletic would be acquisition by a major media company, not a long-term future as an independent company.
Patterson, the spokeswoman at The Athletic, said even converting just a percentage of die-hard sports fans into subscribers “would result in a very healthy business for us.” She said the company has not seriously entertained any acquisition offers.
Leff also believes there is a crucial difference from other subscription companies: Though Netflix increasingly produces original shows, it and Spotify are still mostly licensing companies. Combined, they have to pay billions to stock their services, while The Athletic creates 100 percent of its content.
That content may be the crux of the challenge.
Most of The Athletic’s writers, including many of its most recent hires, earned their following over years, or decades, at newspapers, a following they — and their new bosses — turn into Athletic subscribers. But stocking the site with newspaper veterans (there is also a very strong contingent of former “Sports Illustrated” journalists) means The Athletic often doesn’t read that different from a newspaper sports section.
At Netflix and Spotify, the compelling product is the video and the music. But in sports, the most compelling product isn’t the writing. It is the games themselves, and Grey, the Bleacher Report veteran, wondered if that might be what The Athletic needs in order to truly scale its audience.
“Facebook is buying rights to live games. Twitter is buying rights to live games,” Grey said. “The Athletic may need to find itself moving in that direction.”
John Kosner, Ed Desser in Sports Business Journal: “Making your Media Rights More Valuable”
Original Article: Sports Business Journal, by Ed Desser and John Kosner, April 23, 2018
NBA Commissioner David Stern (our boss for 23/8 years) often said that no one is going to treat you as well as you treat yourself. The NBA had to be the best property it could possibly be, not rely solely on its media partners to grow audience and value. That attitude helped propel the league’s ascension to its current place in the sports hierarchy.
Naturally, everyone wants a bigger media deal, but with the cross-currents of changing media consumption patterns and pay TV subscriber declines, this isn’t automatic. A sports enterprise must organize itself to continually grow, well in advance of rights negotiations, in order to capture more rights value. Here are some tips to consider designed to build product value in today’s multimedia marketplace:
DATA
• Make yourself smarter. Understand how the market sees you, warts and all. Talk with media, advertising and business contacts outside your “bubble.” “Google” yourself to see what the uninitiated see in search results. Track the sentiment on your property on Twitter. Review the published research on sports properties and audiences.
• Systematically Gather Data (beyond TV ratings) which provide insight into the underlying popularity and growth of your product, such as stream views, unique visitors daily & monthly, “likes.” These digital metrics demonstrate the value of your property, and provide network partners with added evidence of the prudence of investing in you. Also quantify the stats for your sport’s collective players, coaches, personalities, teams on Facebook, Instagram, Twitter and YouTube . The reach can be staggering. Use that data to inform your own decision-making.
• Develop a database of fans by collecting e-mails for a newsletter and social media “likes/followers/subscribers” to indicate the strength of your property, and leverage to increase participation and audience.
STAFFING
• Dedicate staff to your media relationship. David often said, someone that understands the partners’ business needs should be “losing sleep” thinking of ways to service and improve the relationship (we did). Organize to get your people invested in the success of the partnership.
• Annual or quarterly meetings with your media partner(s) can provide a useful forum to surface issues before they become problems, and to work together to increase the value of your property and relationships. Senior and operational staff from each should participate. Immediate post-season meetings are ideal review/preview opportunities.
ADVERTISING/MARKETING
• Promotion is not just the province of networks. Properties can use their own assets to drive viewership, which increases popularity, ratings and media value for networks and distributors. This also better serves your fans; ultimately higher viewership translates into bigger rights fees.
• Harness controlled inventory in local game telecasts, in-venue videoboards, websites, apps, radio and podcasts, to build TV audience and enjoyment. Getting current fans to watch more is the lowest-hanging fruit.
• Advertising your major events, using well-targeted paid media, can increase consumption and lead to greater ultimate media value ROI.
BUSINESS DEVELOPMENT
• Sponsor development enlarges the pool of advertisers to buy into your sport, an implicit signal of value of association to fans, other sponsors and networks’ willingness to invest. The more sponsors you have, with budgets earmarked to support your media relationship, the greater the network will value your rights.
CONTENT
• Strategic Scheduling of event telecasts beyond the usual pattern can grow value. Look for alternate dates and times, consider stunts, and search for attractive lead-in windows.
• Program Development of new concepts and shows help to promote the core event and familiarize the casual audience with your athletes. Roone Aldridge made famous the “up close and personal” approach of sports storytelling (people care about people), which will never go out of style. Also utilize the greats of the game and celebrities to help tell your story.
• A Content Factory operated by your property can efficiently generate an ongoing stream of highlights and feature material for a streaming platform, website, social media posts, and for network partner telecasts with tight production budgets (more open than ever to making use of high quality programming provided by the subject entity), as MLS has provided to ESPN/Fox/Univision.
EVENTS
• Improving the event experience better serves existing fans, and indirectly improves the atmospherics of game telecasts. The bigger and better the event feel, the more exciting on TV.
• Quality Control matters. Don’t wait for your media partner to complain about lighting, PA or game presentation. Objectively look at how your events appear on TV, and proactively improve wherever you can, without being asked. Not only will this improve the product, but also your media reputation. The NBA has done this by tightening the length of its games.
AUDIENCE DEVELOPMENT
• Think differently about Millennials, who have a unique interest, and want new ways to participate. Are there different kinds of highlights you can produce (such as vertical orientation) or new fantasy or video games that would especially appeal to them, as the next generation of fans? The NBA uses a special tighter camera just for live action and highlights viewed on phones.
• Social Media Participation by your teams, athletes, coaches, broadcast talent, and administrators on a sustained basis is essential. No longer are publishing of media guides or post-event press conferences sufficient. New efforts aimed at providing wide access to new areas are necessary.
• Serve new audiences through aggressive outreach and a dedicated strategy. Ratings falling are the new normal, . Fans have more options, so you can’t assume that they will continue showing up in the future without catering/outreach. You must expand the base (e.g., younger fans, women, ethnic audiences, etc.) just to stay even. For example, the NHRA permits kids under 10 to attend events for free with an adult. Never underestimate the appeal of getting your youngest fans onto the playing surface, meeting your athletes, getting them hooked early.
These are just examples of some of the ways you can grow the value of your media rights in anticipation of the next negotiation. Don’t wait until the exclusive negotiation period to engage with your partner(s) and focus on your future business. Making the commitment now will pay dividends.
Ed Desser is President of Desser Media (www.desser.tv), a sports media consultant, with 40 years of industry experience. For the past 20 years, John Kosner was the senior digital media executive at ESPN, and is now President of Kosner Media (@jkosner). The two worked together running the NBA’s media business during the 80’s and 90’s.