Thursday, January 29, 2009

ESPN's Surprising Move Just Days Before Daytona

It was August of 2008 when ESPN Executive Vice President John Skipper, pictured above, told the media of the new deal between the network and the Southeastern Conference (SEC). It was an eye-opener.

ESPN had dipped into the seemingly endless pile of money available to the company and agreed to pay the SEC $150 million a year for 15 years. In return for the $2.25 billion, ESPN will carry a slew of SEC athletics on the various ESPN networks.

In early December, ESPN released details of the new West Coast Studio and production facilities the company was building in downtown Los Angeles. The five-story building in the L.A. Live entertainment complex was estimated to cost ESPN around $100 million when it was all done in early 2009.

Now, it is January and ESPN is just days away from beginning ten months of NASCAR coverage. The popular NASCAR Now program begins on Monday, while the Nationwide Series coverage starts at Daytona and will run all season long.

In July, ESPN picks-up the Sprint Cup coverage and airs all the races through the end of the year. ABC handles the "Chase for the Championship," which is the key to the NASCAR season. ESPN is NASCAR's biggest TV partner.

ESPN and ABC Sports President George Bodenheimer just released some new information about what the network will be doing in February, but it was not about NASCAR. It was not about the SEC or the new West Coast studios. As a matter of fact, it was not really about sports at all.

In a live computer videocast to employees, Bodenheimer announced that he was cancelling all executive bonuses, instituting an immediate hiring freeze and eliminating approximately 200 jobs. The world had finally arrived at ESPN's door.

"The economy is worsening," Bodenheimer said, "and ESPN and our business partners -- especially some of our major advertisers -- are feeling the impact more acutely than at any point in our lifetime."

Bodenheimer would not rule out additional layoffs and said the company is now reviewing operations to figure out ways to save money. ESPN's parent company is the Disney Corporation. One year ago, that stock was about ten points higher than it is right now.

NASCAR fans have been reading about the loss of major sponsorships for the various race teams as companies pull back due to the financial crunch. ESPN is supported by two significant streams of revenue in the US. One is the fees that cable companies pay to carry ESPN on their systems. These costs are passed along completely to the cable TV customers.

The second is the advertising that the prime sports products on ESPN bring in from companies around the world. ESPN is a unique advertising destination and it was this revenue stream that Bodenheimer addressed directly in his remarks about the economy.

Just last month, ESPN made the announcement that once again the network would travel the Infield Pit Studio, the Tech Center and all four on-air talent who work in those locations to the NASCAR races all season long.

The ESPN Sprint Cup Series coverage does not start until late July with the Brickyard 400. Speculation was that perhaps ESPN would drop the Infield Studio and the Tech Center for the Nationwide races until the July Cup coverage began.

None of that came to pass and at this moment ESPN is heading into the 2009 NASCAR season with all the bells and whistles intact. That is, until the Wednesday announcement by Bodenheimer that the company is actively reviewing ways to save money.

It will be worth watching to see how ESPN approaches another attempt at cost-savings in one of the most financially intensive sports carried by the network. That sport is NASCAR.

Ten months of race coverage across the nation of two different series is a monster from both a logistical and engineering standpoint. Add to that a daily show that travels reporters, analysts and guests to Connecticut on a regular basis for forty weeks and the NASCAR slice of the ESPN financial pie is a big one.

This is turning-out to be a NASCAR season like no other in my lifetime and we still have yet to turn one wheel at Daytona. While we wait to see exactly which teams and drivers show-up to race, it may turn-out that watching exactly who shows-up to broadcast those races may be just as interesting.

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Fox's David Hill Talks NASCAR

Veteran reporter Dustin Long has been doing a great job of interviewing several NASCAR TV executives in advance of the 2009 Sprint Cup season. This time, he spoke with the very colorful head of Fox Sports, David Hill.

This Aussie has been having fun in America with sports on TV for a very long time. His team of Mike Joy, Darrrell Waltrip, Larry McReynolds and Jeff Hammond were a great shot-in-the-arm for NASCAR at a time when the sport really needed it.

Here are some excerpts from Long's interview with Hill:

Long: There are a lot of people, particularly on the East Coast, who do not like the later starting times, do those later starting times still work for you and Fox?

Hill: I would like to see the races later in the day. That’s just simply because the later you go, the greater HUT (houses using televisions) levels you have. The greater HUT levels, the greater ratings you’re going to get. It stands to reason that at one o’clock on the afternoon that a lot of people are out and about and then as the day gets later and later, obviously more people go in. I would like to see late afternoon starts with the checkered around a quarter till eight (to lead into prime-time programming). I have communicated this on any given number of times to NASCAR, which was fallen on deaf ears.

Long: How do you make the broadcasts economically viable for your network when you’re paying so many millions in broadcast rights fees?.

Hill: It is tough for us. We are a free-to-air broadcast network. Anyone with this new little digital box can get our signal for free and he can sit and watch it. Our revenue comes from one thing and that’s advertisements. So, the deal is and this is the deal America and television have had for 50 years, we’ll give you an hour of entertainment but we’re going to take back 15 to 20-odd minutes so that we can pay the bills. We are dependent on supply and demand. In the good years, there is a huge amount for a limited supply. In the bad years, there is very limited demand for what is obviously a huge supply. So far this year we are in much better shape than I thought we would be. How it’s going to go, I have no idea but it is something that I have definitely got my fingers crossed on. I can’t say. I’d like to remain totally optimistic and thus far that optimism is warranted.’’

Long: What about your announcing team?

Hill: “As important as Darrell Waltrip was to the sport when he was a driver, he’s 10 times more important to the sport right now. Darrell’s ability to communicate is very, very rare. He’s a natural teacher, and he’s a natural enthusiast and he’s naturally passionate about it and he feels sympathy for the drivers. There are a lot of announcers, especially when they quit who feel jealous of the guys who are still doing it, but Darrell doesn’t do that. When we put the team together, we had no idea they were going to be as potent and as strong as they were.

These are some good comments from Hill on several topics that we have discussed over the past two seasons. Please feel free to add your opinion on these topics. Click here to read Long's column in full. Thanks for stopping by.

DW Responds To "Trackside" Comments

Kudos to Darrell Waltrip for taking the time to respond to the comments that were accidentally aired on Trackside last week where he worried that the California race the week after Daytona might be "a ghost town."

Here is an excerpt:

You might have seen or heard about last week's Trackside show on SPEED when a private off-camera conversation between myself, Hammond and driver Rick Crawford aired by accident. It's unfortunate that it happened. I stand by what I said in that conversation. I have concerns about what is going to happen with the fields after Daytona.

Click here to read DW's entire column on that topic and several others.

It is great that he took the time to include this content in his blog. Hopefully, this type of open and honest conversation about the sport might migrate from being held off-camera to being presented to the fans in regular NASCAR TV programming.

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Joey Logano Comes To SPEED On Thursday

It certainly has been an interesting couple of weeks for rookie Sprint Cup Series driver Joey Logano. Click here for the call by Mike Joy and Phil Parsons of the final laps of the Toyota All-Star Shootout last weekend on SPEED.

The transition from youngster to adult is in full swing for Logano and it will play-out this season in front of the national media. Logano is about to step into the Sprint Cup "blender" where suddenly everything is scheduled and every minute away from the track involves sponsors, the media and the fans.

Thursday evening at 7PM, Logano will be the guest of Steve Byrnes and Larry McReynolds on Preseason Thunder from the new SPEED HD studios in north Charlotte.

In the past, Logano has done very well on TV with his quick smile and good sense of humor. In a way, Thursday marks his first official TV appearance as a Cup rookie and the new pilot of the Home Depot car for Joe Gibbs Racing. Luckily, he is with two TV veterans in Byrnes and McReynolds.

Logano is about to be introduced to a wide variety of TV appearances and interviews with a brand new agenda to discuss. This time, he will be directly in the line of fire where on-track performance and off-track lifestyle are concerned.

His TV exposure in 2008 was a mixed bag of polite interviews and several feature reports about his rise to the top at such a young age. Things really heated up when Tony Stewart asked for and was granted his release from JGR late in the season. Logano was suddenly out in the media spotlight fulltime.

It was last summer on the ESPN program E:60 that reporter Tom Farrey put together a feature that showed several different sides of the Logano puzzle. It was clear he is a talented driver with good family ties. Farrey reported that the Logano family had invested over one million dollars in bringing their son along in the racing world.

Still, his parents appear to be very nice and this young man may be just the breath of fresh air that the fans and the media need during this tough time. Byrnes and McReynolds will get to set the table for the season with their interview on SPEED Thursday evening.

Friday on Preseason Thunder the program will offer a report on the impact of Toyota on NASCAR and Byrnes will host the final episode of this program for 2009. All NASCAR TV comes to a grinding halt for Super Bowl Weekend and then both SPEED and ESPN2 start a long ten months of coverage next week as NASCAR ramps-up for Daytona.

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