The Wharton Sports Business Club hosted a digital media panel and reception on Monday, March 23rd. John Ourand, who writes for the Sports Business Journal, served as the moderator for the discussion. The panel consisted of Neal Pilson (Pilson Communications and Former head of CBS Sports), Sara Jeon (VP, Content and Strategy, Sling Media), Kyle Ragsdale (VP, Business Affairs, SB Nation), and Neal Scarborough (VP, Digital Media, Versus Network 2).
Ourand wasted no time in getting started, asking Neal Pilson – the former head of CBS Sports – if the TV networks were a dying breed. Pilson suggested that, while the broadcast networks have recently been referred to as dinosaurs, they are at the very least adaptive dinosaurs. They still have the muscle and reach necessary to be dominant players. He believes networks will continue to be heavily involved in digital rights, because the coordination of broadcast, cable, mobile and internet are all still controlled and orchestrated by the broadcaster.
The follow up question was whether or not broadcast networks can effectively compete with subscriber based channels, specifically ESPN. Ourand framed the question by saying that he couldn’t remember the last time he had seen Rupert Murdoch get outbid, as he had been when ESPN outbid FOX for the rights to the BCS Series starting in 2011. Pilson agreed that ESPN may well dominate, saying he expected ESPN to be very aggressive when the next digital rights come up. It is very difficult for broadcast networks to compete with ESPN, which garners ad revenues like a broadcast network and then augments them with over $4 billion annually in subscription fees (~$3.70 / subscriber / month x 12 months / year x 98 million subscribers). CBS may look to create a competitive counterbalance to ESPN / ABC by looking at Turner, but even Turner only commands around $0.70 per subscriber – a far cry from ESPN’s premium. Pilson contended that political fall out is often the only barrier to ESPN because it can be difficult to justify airing a major sporting event on cable at the expense of the ~15mm US households that don’t get cable. That said, Pilson suggested that the NCAA would almost certainly explore its options for its hugely popular Men’s College BB Tournament contract. It has the right to opt out of this contract with CBS after this year’s tournament, and Pilson sees ESPN to be the likely top suitor.
Neal Scarborough weighed in on his experience at Versus Network. The Versus Network 2 is home to college football, bull riding, cycling, hunting and fishing and other niche sports. Currently he is focused on strengthening the brand and enhancing Verus’ online offering.
Next up was Sarah Jeon from Sling Media, creator of the popular Sling Box. Sling Media was established in 2004 and acquired by DISH Network in 2007 at a valuation of around $380 million. Sarah heads the Sling.com online effort, which is a professional-only video site that partners with content creators. Currently, Sling.com offers over 90,000 videos for free including shows, movies, sporting events and highlights. They are streaming some sporting events live, such as the Masters per an agreement with CBS. ESPN, on the other hand, does not share its content, in part because they have their own broadband sites. Interestingly, Neal Scarbrough said Versus is happy to share content with Sling.com because, at this point, they are more concerned with developing brand recognition than subscription fees per se.
Kyle Ragsdale gave us a view into the blogosphere’s role in sports while describing SB Nation. Kyle joined SB Nation after embracing the blogosphere as the associate director of media relations in the Georgetown athletics department. SB Nation was created over four years ago when a displaced Oakland A’s fan realized how hard it was to get quality coverage of his favorite team. It has since evolved into a collection of nearly 200 individual blogging communities, oriented around major professional and college teams. Each team’s blog has an editor under contract with SB Nation, whose role is to moderate content. SB Nation depends upon an ad-driven revenue model.
In response to Ourand’s question, the panelists generally agreed that they were not concerned about potential knock-on implications of newspaper’s demise. As Kyle Ragsdale put it, SB Nation’s content is going to continue whether the Kansas City Star exists or not.
Neal Scarbrough fielded a question regarding Versus’ support of nascent sports such as MMA. The question asked whether or not he was concerned about the prospect of helping grow a sport and then losing the rights to a bigger competitor. Scarbrough that, to the contrary, Versus is fully aligned with the growth of new sports they promote. Though Versus stops short of altering the content and character of a sport, they do provide advice on how to market it. Interestingly, Scarbrough’s primary concern with emerging sports was not that they would outgrow the channel, but rather that the reallocation of airtime would marginalize the sports on which Versus was built (hunting, fishing, hockey, etc.).
After an excellent panel, the panelists and attendees continued the discussion over food and drinks at a reception in MBA Cafe. The WSBC would like to thank the Wharton Sports Business Initiative for their generous support, and each of the panelists for their time and insight into the world of digital media in sports.
- Rob Sebastian WG'10
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