Remote Sports Production Executive Roundtable 2012: ‘Our Trucks Are as Busy as Ever’

As Nielsen ratings and the value of media-rights deals for live sports programming continue to skyrocket, the remote-production industry finds itself in an enviable position. With a growing number of eyeballs watching and dollars invested, rightsholders are more intent than ever on delivering the best possible production quality in their live sports telecasts, which is good news for the vendors that supply the trucks, equipment, and skilled engineers at the production compound.

Even with autumn work stoppages in two consecutive years, national and regional sports networks’ demand for HD mobile units continues to escalate and SD trucks fall by the wayside. Meanwhile, the exponential growth of multiplatform distribution and the proliferation of college-conference and regional sports networks throughout the U.S. offer potentially lucrative new revenue streams for remote-production providers.

“I think it is a very good time right now for our business,” says Pat Sullivan, president/owner, Game Creek Video. “There is a lot of activity in the regional-sports-network area and the networks that are being developed by college conferences. People are asking for more cameras and more replay devices, and our trucks are as busy as ever.”

Nonetheless, significant challenges remain for the industry, namely the danger of labor strife among the big-four pro sports leagues, spastic gas prices and travel costs for crew, the eternal issue of obtaining financing for new trucks, and finding the next generation of engineers in an increasingly IT-centric world.

“We are in a terrific industry, so long as a league does not lock out or strike,” says Phil Garvin, president/founder/co-owner, Mobile TV Group. “But we have had two out of four major leagues — and almost three — do just that in the past year. And that’s when the banks can become concerned. When we have a lockout, the impact is enormous because it is not just one team, it’s the whole league. That is very unusual for an industry. There is no bright side to that kind of situation.”

Vendors Begin To See $$$ Trickle Down
Regardless of the loss of NBA and NHL (and nearly NFL) dates due to labor-related work stoppages, one thing is certain: the sports industry as a whole has never been a more lucrative business. And as both national and regional sports networks fork out more and more money for the rights to live sports programming, remote-production providers are beginning to reap the rewards.

“As the rights fees go up and the competition for those rights increases, quality and reliability of production become absolutely crucial,” says Garvin.

The networks are under so much pressure to deliver now that they are willing to pay a little extra to get that added level of assurance. That was always true for a big playoff game, but it is now true at almost every level.”

With the overall cost of these sports properties on the rise, the production budget becomes less of a factor in the bottom line. Many truck vendors see this as an opportunity to augment productions with additional facilities in an effort to enhance the overall quality of the show.

“We have definitely started to see the effects [of the huge rights deals],” says Sullivan. “If [rightsholders] are going to invest multiple millions or even billions of dollars in this content, the trucks quickly become a very small component in the overall cost of producing these events. A modest increase in what they pay for mobile facilities can end up creating a significant increase in the quality of the final product.”

Multiscreen Distribution
Sports productions across the country are getting additional trucks and gear as a result of the multiscreen revolution of the past few years. The linear telecast is now just one element in a multipronged production effort at high-profile events like golf majors, tennis Grand Slams, and others.

“In all the new rights-fees deals, there are components of those contracts that address secondary-screen distribution, which shows me that there is going to be more focus on how we are going to be able to supply multiple feeds out of one truck or one compound,” says Mike Werteen, SVP of sales and client services, NEP Broadcasting. “That means more facilities and more equipment, which obviously bodes well for what we do.”

Sullivan says Game Creek trucks have been brought in specifically to handle streaming productions at live sports events on several occasions over the past year, and his company is not alone.

“We are starting to see people think more about the different revenue streams — second-screen and Internet distribution — that could be available from an event that is already being covered,” says Corplex President/partner Scott West. “They are already covering these events, so why not find new ways to sell the same content? That requires more infrastructure on the compound, which is good news for the truck business because they need more trucks and gear in order to make that happen.”

Meanwhile, lower-profile college events that may not have warranted even a three-camera shoot just five years ago are being streamed online to a newfound audience. In addition to ESPN3, which streams hundreds of live college events each year, colleges around the country are looking to increase their brand and exposure by streaming their athletics events online.

“We have one SD truck left in our fleet,” says CSP Mobile President Len Chase. “That truck exclusively works for ESPN3, so it’s created a little niche business for us. We are seeing more and more cases where our signal is being divvied up. Our regular network broadcast or a local RSN feed is also being utilized for mobile devices and second-screen [platforms]. Our new truck is set up with four transmission paths just for that reason.”

The RSN Effect
Over the past year, new regional sports networks have popped up across the U.S., headlined by the Lakers-fueled Time Warner Cable SportsNet and Deportes in Los Angeles and a septet of Pac-12 Networks scattered throughout the western half of the country (new RSNs also launched in Houston, New Orleans, and San Diego). TWC Deportes, the first dedicated Spanish-language RSN in the country, could be a sign of things to come for the market, creating yet another potential new revenue stream for mobile-truck providers.

“Regional sports shows are getting extremely complex,” says Garvin. “In addition to home and away feeds, we are producing Spanish feeds now.

And then, sometimes, leagues and league networks will want a clean feed. Then you add in all the second-screen aspects. In the end, what was a pretty small show 10 or 20 years ago at the RSN level is now an awfully big show.”

Financing Remains Tough
With SD trucks nearly off the road entirely, vendors are rolling out HD units at a rapid pace, with an eye on potential new markets in the college and regional sectors. Mobile-production vendors launched more than 20 new or rebuilt trucks during 2012, with many more on the way in 2013. However, despite the high-octane output of new HD trucks, obtaining the financing for them remains a constant obstacle.

“It is easier to get capital [to finance new trucks] today than it was during the economic downturn four years ago, no question about that,” says Werteen. “But we are also entering our second straight year of a major work stoppage in pro sports, and that hurts everybody. There are business plans that are built upon the assumption that that revenue will be there for us. So when labor disputes happen, it is painful for everyone.”

Dealing With Work Stoppages
Although the Republican primary race and presidential election of 2012 helped offset lost business from the NBA and NHL lockouts, mobile providers still have seen their bottom line take a hit.

“Unfortunately, you are always going to have work stoppages; it’s just a downside of the business,” says Sullivan. “We have been fortunate in that we have made up some of that revenue through the debates and inauguration and such, but it is still a very good-size hit.”

While companies like Corplex have looked to differentiate their business in an effort to protect themselves from future work stoppages (picking up more events along the lines of skiing, rodeo, etc.), there is no way to truly future-proof the business from a lockout.

“Not only do you have a risk of losing a huge percentage of your work, but you also can’t replace it until the league cancels the whole season,” explains Garvin, who has pledged that there will be no lockout-related layoffs at MTVG. “So you are sitting there not knowing whether your truck is booked or not two weeks out. And you can’t rebook your truck because you have to honor those original dates. We aren’t left with a lot of alternatives.”

Fuel, Travel, and Engineers
In addition to the looming risk of a work stoppage, mobile-production–truck providers also face year-in/year-out hurdles like fluctuating fuel prices and travel costs.

“We’ve always dealt with [gas and travel prices], but it’s to a point now where it’s critical,” says Crosscreek Television Productions President/CEO Spruce McCree. “Much like everybody else, we’re trying to negotiate and have been somewhat successful with factoring [fuel and travel] rates into our contracts. But it certainly doesn’t offset the terrible rise in costs that we’re paying. You just have to do a lot of volume and be creative in what you do there.”

Another constant challenge is the search for highly skilled engineers as the truck business becomes a more IT-centric ballgame.

“The big challenge for us continues to be finding high-quality engineers,” says Sullivan. “That is always going to be a challenge because it is a very specialized position and it is more difficult for us as we get bigger. Our ability to put engineers who are up to our standards on every truck is becoming more and more difficult.”

Sullivan does, however, see great value in establishing relationships with both the military and local universities — as Game Creek has done with the Navy and schools like UMass-Lowell — in order to scout the next crop of engineers.

Bottom Line: Business Is Booming
Despite these obstacles and tumultuous labor situations, the remote-sports-production industry can boast a solid bill of health. With ratings, ad revenue, and media-rights investment up almost across the board, sports networks and broadcasters are more willing than ever to open their wallets to enhance the production quality of their telecasts.

That means greater revenues for mobile-production providers and plenty to be thankful for going into a promising 2013 campaign.

“Personally, when I see these escalating rights deals, I feel bullish about our place in the industry and the industry as a whole,” says Werteen.

“Obviously, when there is that much money spent on rights fees, it means that live sports has been targeted as destination viewing for television viewers. If [networks] are going to pay that much money for live sports, there is going to be a focus on getting the most exposure possible for that content, and that bodes well for our industry.”