Top 20 Media Exec Quotables From SBJ’s NeuLion SMT Conference

Dozens of top sports-media and tech execs took the stage at the Neulion Sports Media & Technology Conference by SportsBusiness Daily/Global/Journal in New York last week to discuss everything from the state of the sports-cable industry and cord-cutting/shaving to the NFL streaming on Yahoo and the importance of Twitter in today’s media landscape. Here are some of the things they had to say on key topics.

AMC’s The Walking Dead overtook ESPN’s Monday Night Football as the highest-rated primetime program on cable last year. Is entertainment programming becoming more powerful than sports programming?
Ken Solomon, chairman/CEO, Tennis Channel:
The value of sports continues to escalate because of the reliability and predictably of the audiences. When I was on the entertainment side at Universal, we could spend $5 million-$8 million on a pilot for a show and didn’t even know [whether the networks] were going to buy it. We know people are going to show up for the Mets, for Roger Federer, for their favorite teams year over year in spite of their performance. ESPN can make the deals they do because they can predict with fair certainty that they will deliver an audience. We know people are going to show up for Wimbledon and Roland Garros; we don’t know when the next Walking Dead is coming.

How do you expect Yahoo’s streaming of the NFL’s Jaguars-Bills game to impact the pay-TV industry and sports-rights landscape?
Melinda Witmer, EVP/chief video and content officer, Time Warner Cable: If you could roll the clock back four years, ask an entertainment network would it have made my best shows available for $8 online with no advertising in a binge model? Probably not. I would ask the NFL the same question about their test because tests have a way of becoming the way that we do things. Did [entertainment networks] do the right thing here because [they] opened the floodgates of [their] business? That’s the question that sports-rights holders should be asking themselves today.

Given all the “skinny bundles” hitting the pay-TV market, are regional sports networks in peril? How do you grow that business?
Witmer:
The reason we got into the RSN business [with TWC Sportsnet, TWC Deportes, and Sportsnet LA] was [that] we had a core content that was very important in L.A., where we have a lot of subs and we were routinely facing massive rights rate increases every five to seven years — way beyond the level of increases we could pass on to consumers. DirecTV and Comcast already owned RSNs, and a primary driver behind them was securing core content. We made a decision that we wanted to stay in the business of delivering regional sports. We will go into the business to predominantly pass it through [to the consumer] at cost plus small margin. That was the primary driver behind everything we did in LA and remains the case. Would we prefer that all the other operators in the market make them available to their customers? Sure. We know that the price point is very consistent with what gets charged in other markets. We had our dispute with MSG and were making the very same analysis. You can run the math, and there is almost no network on the dial that will completely pay for itself. I respect any distributor who says they don’t want it.

How much is sports still a driver for your bundle?
Ben Grad, executive director, content strategy and acquisition, Verizon: We definitely views sports [content] as very important for certain customers on certain platforms but not for every customer every day. We are happy to pay fair value for content for customers that are interested in that content. We don’t think it’s fair to make those customers pay for [content they are not interested in].

Is password-sharing a problem for your business?
Witmer:
We don’t see it as a major problem for us right now. It may become a problem later on. We don’t think it’s that big of an issue. The use of TV Everywhere is still small. When it gets bigger, that may become more of a conversation, but, right now, it’s not.

[IAC/InterActiveCorp Chairman] Barry Diller has suggested that ESPN and sports TV are creating a false economy by overpaying for rights. Would you agree?
Sam Flood
executive producer, NBC Sports and NBCSN: The No. 1 show on TV remains Sunday Night Football. The biggest event on television is the Olympics, and the number-one way it is consumed is on a very big television set. Obviously, there are other ways to consume content, but the big events are always the biggest things on TV. We bring the big audiences. Sports rights are critical and important to every network, and that’s not going to change.

The majority of live-sports-rights deals are tied to cable TV today. Are you concerned about cord-cutting’s jeopardizing these deals?
Seth Bacon
, SVP, media, MLS: No, absolutely not. We have a very loyal and passionate fan base that we are building on right now, and that’s the value that Fox and ESPN and Univision saw: that audience is valuable because they are young, tech-savvy, more affluent, typically. So we have the desired audience; we just need to find the scale. We are not concerned about our partners’ ability to do that and build an audience with us. Whether that is on TV through their digital platform, through our digital platforms, or through partnerships we have together.

How do you try to program your daytime slate to compete with ESPN?
Flood:
We embrace the sports we have. If we were going to be a buffet restaurant, it’s going to be harder to get people in. But, if they know that we are serving steak, they are coming for steak. So NASCAR fans are coming for NASCAR America. We want to be specific to honor that audience. It’s a very different environment where ESPN has built a legacy over years and where people are coming for all sports. We have focused on growing. Right now, it doesn’t make sense to have a buffet restaurant when people are coming to us primarily for hockey, NASCAR, and football.

How does Fox Sports 1’s daytime-programing strategy differ from NBCSN’s?
Jamie Horowitz, president, National Networks, Fox Sports: We are here to compete; there is no doubt about it. It’s an acceptable strategy and business that NBC is pursuing, but it’s not the one Fox is pursuing. We are not going to concede any ground to ESPN, not now and not in the future. I think that’s represented in the decisions we’ve made recently. We talk about the value of original content for live events. The other half of the sentence is more important than the first: we are going to acquire the event so the other guy doesn’t have it. Daytime television is the same thing. The value of acquiring Colin Cowherd is not just that he’s transformative and interesting and original; it’s that now ESPN doesn’t have him. If you want to hear Colin every day, you have to come to Fox.

How does Twitter handle the posting of GIFs from copyrighted sports video?
Keens:
We take copyright very seriously. The reason we do that is, we rely on their content and the moment we become disrespectful of their content we [endanger that relationship]. We comply with DMCA [Digital Millennium Copyright Act] laws, and, if people aren’t playing by the rules, we have to take action. [Whether posting a GIF is playing by the rules] depends. It’s about the context it’s used in. We have that conversation on a daily basis: what can you post and what can’t you? There is also a school of thought from some of our partners that it can help the business and make content more valuable.

Are you interested in acquiring the Big Ten football- and basketball-rights package coming up for bid in 2016?
Horowitz:
Of course, we are interested in Big Ten. It’s an extremely valuable property, and these things only get more valuable. There just is not a lot out there right now; a lot of the major rights are tied up for a long time. So Big Ten is the next big get.

What media story will you be following most closely in 2016?
Flood: The Rio Olympics. Starting in London, we streamed all the events live. I think the growth in the number of people streaming Rio is going to be astronomical because it’s going to be in a favorable time zone.

Keens: I’m following virtual reality. It will change the game and change the way content is consumed and distributed. It’s going to change the whole experience. If you’re in the TV business, I think you are starting to realize how the radio business felt when TV came along when you start to engage with VR compared to that big screen we all have at the moment.

In Depth With CBS President/CEO Less Moonves…

CBS President/CEO Les Moonves at the NeuLion SMT Conference. Photo courtesy of SBJ

CBS President/CEO Les Moonves at the NeuLion SMT Conference. Photo courtesy of SBJ

Did Wall Street overreact when it killed Disney and other media stocks during the latest round of earning reports?
Disney was the perfect stock, ESPN was the perfect company, and they were showing a little chink in the armor. By that I mean more and more are beginning to get their product in the skinny bundle, which gets closer to the à la carte world with 12-15 channels instead of the 140 channels. There may be households that will not take ESPN. So [Disney CEO] Bob Iger said something about how they may go direct-to-consumer with ESPN, and there was a vast overreaction by Wall Street: “Oh, my god, the traditional [outlets] will be losing subs, and the whole ecosystem is failing.” That just is not true

When the next round of rights deals opens up in 2020 and beyond, will CBS be one of the bidders?
We are really happy with our [sports-rights] portfolio. We didn’t bid on the recent NBA or MLB deals. There comes a point where you have to decide what business you are in. ESPN is in a very different business than us. This is the first time in 35 years that we didn’t carry the US Open tennis tournament. ESPN outbid us by a lot. We didn’t like losing it, but, if we would have invested in it, we would have lost tens of millions of dollars every year. So you have to look at the value of the proposition not just for P&L but also what it does for the rest of the schedule. … When these rights come up, you have to analyze what it’s worth to you. ESPN is living in a different ecosystem than CBS.

Could you see a time when CBS is priced out of the NFL?
Between 1993 and 1998, we didn’t have the NFL, and the NFL did very badly. I think, when NBC lost football, they experienced a similar situation before they got back in with the Sunday Night package. The NFL is pretty important to the networks, and [the league] knows it. I must say they use their leverage appropriately. We are very happy the long-term deal isn’t up for eight to nine years, so we won’t have to deal with it ’til then. It’s a very important part of who we are. It’s attached to the retrans deals, there is no question about it, and it helps our schedule.

Do you have an update on the Thursday Night Football deal after this year?
Now Yahoo is obviously a competitor for the Thursday Night package as well. We are very pleased with it and think we have done an extraordinary job. This year, we have gotten much better games than we did last year. Would I like to continue it? Obviously, yes, but it has to make sense.

Will the next Thursday Night Football deal be a one-year deal or longer-term deal?
No idea.

Do you expect more streaming-only NFL games next year after Buffalo-Jacksonville this year?
Probably. I really don’t know. They are looking at all sorts of combinations. The NFL was able to get on a quadruple header. Clearly, it’s part of the NFL plans moving forward; whether it involves Sunday games or Thursday-night games is all up in the air. I think certainly it’s going to be a big part of their plans.

What are your plans for CBS Sports Network, and how are you looking to grow the network?
We have played our hand differently than some of the other sports networks in that we haven’t invested a fortune, and we don’t intend to lose a lot of money on it. We like to say we have smaller conferences’ big sports and bigger conferences’ small sports. It’s been moderately successful. We have been very respectful of the cost. It’s building, and the number of subs is up considerably. We are playing a different game than Fox and NBC. If you get 15 channels [in a skinny bundle], CBSSN will not be one of them.