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November 19, 2018

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NAB Show:

ESPN layoffs not emblematic of sports broadcasting’s future, NAB panelists say

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Mick Akers

The state of the sports industry was the subject of a panel at the National Association of Broadcasters Show on Wednesday at the Las Vegas Convention Center. From left are Sports Business Journal reporter John Ourand; Craig Barry, chief content officer for Turner Sports; Keith Wachtel, chief revenue officer for the NHL; Todd Goldstein, chief revenue officer, AEG; and Chris Granger, president of the Sacramento Kings.

Just hours after ESPN laid off more than 100, including longtime on-air talent, a group of sports executives hosted a roundtable on the state of the sports broadcast industry at National Association of Broadcasters Show (NAB) at the Las Vegas Convention Center.

Moderator John Ourand, a reporter with the Sports Business Journal, noted the coincidence on a day that “almost felt like a funeral in the sports industry.”

Other panel members said that they were saddened by the layoffs, but they explained ESPN’s decision was not necessarily a reflection of the industry as a whole.

“Objectively it’s disappointing to see,” said Todd Goldstein, chief revenue officer of AEG. “To see this public, very high-profile company letting go of some very talented individuals. … It will be interesting to see what other impacts this will have (on the industry).”

A sport that was hit especially hard by the cuts was professional hockey, just ahead of the NHL’s Vegas Golden Knights first season in the league. Two columnists and one writer were axed, and the network’s coverage of the sport already dipped a bit after the television rights for the league's games were bought by NBC in 2011.

Keith Wachtel, chief revenue officer for the NHL, said he doesn't think ESPN’s challenges define the sports broadcasting industry.

“They’re a corporation just like any other, and they go through their challenges and they face them,” Wachtel said. “They’re still the leading sports broadcaster that’s out there. They have the most sports rights, and they’ll survive.”

The panel agreed that cord cutters, those who are dropping cable TV in lieu of streaming services, and expensive rights deals with leagues were reasons for ESPN’s layoffs. Other networks are also feeling the pinch, but not as much as the the self-proclaimed “Worldwide Leader in Sports.”

“At Turner, we deal with the same issues,” said Craig Barry, chief content officer at Turner Sports. “With our NBA deal, that was much higher than people were expecting of us. I’m not sure it’s apples-to-apples for us because we’re not a 24-hour sports network, so we don’t have that heavy lift ESPN has.”

When Turner Sports negotiates deals, it tries to focus on all aspects of broadcasting, not just television, Barry said. He noted Turner's popular March Madness app, which allows users to view every NCAA tournament game on their smartphone, is one of Turner’s successes outside of TV.

“We’re inclusive of all screens — digital, social as well as linear. Those are really important rights as we build into these long-term deals,” he said. “There’s a lot of fragmentation, and I don’t think people realize that people who are cutting cords are actually going to other destinations to consume the content.”

With Amazon, Twitter and Facebook among the newest platforms on which to consume live content, a fatigue factor sets in for both the user and the broadcaster, Wachtel said, and figuring out how to navigate that issue is a challenge.

“This is another reminder that the market is shifting,” said Chris Granger, president of the NBA’s Sacramento Kings. “It doesn’t mean that broadcast television is going to go away, it’s still going to be a core component of how sports are consumed.”

Being mobile is essential, Granger said, but TV is still going to be the main platform on which sports are consumed or the foreseeable future.

CPMs (cost per thousand impressions) are increasingly becoming a more important metric of how online and social platforms are performing, and learning how to take advantage of that is what networks are trying to do going forward.

“Are they watching, are they sharing, are they following? We still have to figure out that code on how to monetize that, so we can really create incremental revenue off that,” Barry said.

The value of live sports drives the viability across all platforms. No matter what takes place, the panelists said, there will always be a market for sports broadcasting.

“The one thing that will not change is the value of (being) live,” Wachtel said. “They want live content, and that’s what sports does. Look at the Oscars. People wish they had seen that moment (when the wrong Best Picture was inadvertently announced) live. … At the end of the day, that is what people want; they want live television.

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