At some point, you would think the cartoonish spending for sports on TV will end. The money has to run out eventually, right?
Well, that wasn’t the case Tuesday. According to Sports Business Daily, NBC shelled out $4.4 billion for a new 10-year contract to air NASCAR on NBC and NBC Sports Network, beginning in 2015.
From Tripp Mickle and John Ourand:
That represents a significant media rights increase for NASCAR over the more than $2.28B paid by ESPN and Turner Sports combined for the same number of Sprint Cup and Nationwide races in their current 8-year agreements. This comes after NASCAR received a more than 30% increase in its earlier deal with Fox that covers the first half of its season.
Why was NBC so motivated? Of the 20 races in this package, 13 will be shown on NBC Sports Network. That’s prime live programming for a sports network that saw itself get left on the sidelines for MLB and some of the major college rights deals. Now NASCAR gives NBC SN a valuable property in the summer and fall.
NBC Sports chairman Mark Lazarus called the deal “a game changer.” Whether it leaves NBC without any change in its pocket remains to be seen, but Tuesday wasn’t a day for crunching numbers.
“Over the past two and a half years, we have set forth, since Comcast bought NBC, to renew and acquire properties,” Lazarus said. “We’ve done a significant amount of deals in that time period, but this is one that we’ve really been focused on. The fact that we are going to be working with all of those NASCAR constituencies to build content for NBC, NBC Sports Network, our regional sports networks, the quantity of content that this deal provides and the quality of content that this provides is really a game changer for us for our entire group, and we can’t wait to get started.”
As for NASCAR, why leave ESPN, which is seen in 20 million more homes than NBC SN? Well, it is following the NHL’s lead here.
At ESPN, NASCAR often trailed in the fumes from the network’s coverage of football, college and pro, the NBA, and MLB. At NBC and NBC SN, NASCAR will be the main game in town during its coverage season. The scenario has worked out well for the NHL.
Indeed, when you think about it, how weird was it to hear NASCAR president Brian France invoke hockey when discussing the new deal?
France said: “I can tell you from our discussions as we negotiated this, the integration, and I know that word is used a lot and over used probably sometimes, but the reality is that you can see what they’ve done with the NHL and other properties. They’re in a mode where they’re pulling together all their properties. They still have a bigger emphasis on big events on network television.”
Lazarus added: “What I think we’ve demonstrated over the past several years is that when we’re able to have a property like the Olympics, the NHL, the Premier League, NASCAR, Formula 1, we’re able to bring an audience and surround it with content. (We do it) both on broadcast, on cable, in digital by promoting and marketing using our RSNs. We’re able to bring a level of awareness to a sport, to a property that is frankly unparalleled in the industry, and that’s what we intend to do with NASCAR.”
Starting in 2015, there will be 10 years to see if this deal works for both parties. And for NASCAR fans.
For those who want more, here is the entire transcript to the call:
BRIAN FRANCE: Good afternoon, everyone. Obviously a very exciting and huge day for the sport of NASCAR, the industry of NASCAR and all of our stakeholders, and before I talk just a moment for how excited we are about the future, and I certainly want to make mention of two partners who are not going to be renewing their rights, that being TNT and Turner and ESPN. We’ve been together one way or the other for 30 plus years, and they’ve done an outstanding job of presenting the NASCAR story week in and week out, and we’ll certainly miss them in many ways.
But this isn’t about the present, it’s about the future, and the future for us, with all of the assets of NBC and Universal and Comcast, made a very compelling point to us that we’re better together going forward with their family of networks and assets, and not to mention the fact that we’ve had a long standing and long confidence in Mark Lazarus, who spearheaded the deal on their part. So we had a high degree of confidence that Mark brought to the table, and we’ve outlined what we think is just a terrific agreement, one that’s going to present the sport we think it’s going to be very, very compelling on how that’s going to get done, and there’s a lot of work to be done on the NBC side, and they’re excited about just that.
But what we know is the integration of the assets that they are marshaling together, because this is going to be such an important franchise sport for them, made it to be so compelling that it was just the right choice. So I know I speak for everybody at NASCAR, including our stakeholders, our drivers, teams, tracks and sponsors, and I’ve talked to an awful lot of them here in the last 24 hours, and there’s a real excitement about partnering with NBC and what I’ve told them, and we’re thrilled to be part of the NBC Sports family.
With that I will turn it back over to you, Greg.
GREG HUGHES: Thank you, Brian. Now the chairman of the NBC Sports Group, Mark Lazarus.
MARK LAZARUS: Thanks. I’ll simply start by saying we are back. We are thrilled to be back. When NBC was involved with NASCAR from 2001 to 2006, it was a very good experience for NBC, the rich history of NASCAR. We think that the stakeholders at NASCAR, led by Brian as well as the teams, the owners, the tracks, the drivers, will all welcome us back with open arms based on previous history and experience with us, and we couldn’t be happier to have NASCAR back as a tent pole property for NBC and NBC Sports Network, as well as integrating, as Brian said, other assets into the deal.
Over the past two and a half years, we have set forth, since Comcast bought NBC, to renew and acquire properties. We’ve done a significant amount of deals in that time period, but this is one that we’ve really been focused on, one that we have wanted to have the opportunity to be able to sit at the table when contractual opportunities came due, and the fact that we are going to be working with all of those NASCAR constituencies to build content for NBC, NBC Sports Network, our regional sports networks, the quantity of content that this deal provides and the quality of content that this provides is really a game changer for us for our entire group, and we can’t wait to get started.
GREG HUGHES: Now let’s go to Steve Herbst, NASCAR vice president of broadcasting and production.
STEVE HERBST: Thanks. I just wanted to echo what Brian said earlier, just that NBC brings so much to the table for NASCAR, outstanding production quality, great promotional opportunities with all their other properties. Some of the best championship programming you’ll see out there lives on NBC, and I think it’s the start of something really special, a very special partnership.
With today’s announcement and the FOX agreement we came to in the fall, our TV picture, our puzzle is almost complete. We have one more package out there. It’s a first half Nationwide package with 14 Nationwide races, along with three Cup races. That package is being discussed. We have ongoing negotiations, and we plan to place that very soon, and that will all move very quickly.
Finally from me I just want to say for ESPN and Turner, they are our partners through 2014. High class organizations with great leadership with John Skipper and David Levy and others. We’ll work closely with them through the balance of this season and next season to deliver great product to the fans.
Q. Steve and Brian, can you give me a sense, you don’t always see a property leaving ESPN. What is it about the NBC Universal Comcast asset that you find at least or more compelling than ESPN’s assets, which are always talked about, their many, many, many platforms?
BRIAN FRANCE: Well, I’ll take that. First of all, I think it’s the commitment that they’ve made in terms of how important NASCAR is going to be within the already robust properties that they have, and start with that. And I can tell you from our discussions as we negotiated this, the integration, and I know that word is used a lot and over used probably sometimes, but the reality is that you can see what they’ve done with the NHL and other properties; they’re in a mode where they’re pulling together all their properties, and non sports properties, as well, and plus the network. They still have a bigger emphasis on big events on network television.
So a combination of all of that, and then the trust that we have in Mark, because we’ve done business with him for many, many years, it brought it to a point where this is the right place for us to be.
Q. My question is for Brian, following up on that. The last time ESPN didn’t have a deal with you guys from 2001 to 2006, it seemed to affect their coverage of the races. I know you guys weren’t as big a presence on SportsCenter. They’re such a Goliath on the sporting landscape. Are you worried about how you might be affected in terms of being presented on ESPN?
BRIAN FRANCE: You know, we’re actually not, and the reason is it’s a different time now. They have different thinking about how they want to cover sports. John Skipper is as good as it gets in his organization, and we’ve had conversations. Obviously you think about all those things, but the reality is they have to cover the big events that people watch every weekend, and I don’t you never can predict the future, but we didn’t think that was something that would hold us back from making this deal, that’s for sure.
Q. So they’ll still be invited or credentialed for races if they choose to do that in 2015 and beyond?
BRIAN FRANCE: Well, yes, but obviously there are exclusive rights and some things we’ll have to all work through, but that’s not anything different than what naturally occurs. So we’ll be working through that. I have no problem that this is a different time than way back when, and I’m certain that we’ll all figure that out together.
Q. Brian, can you talk about the balance between having races on network versus races on cable, specifically NBC Sports Network? I don’t know if you can give us any final figure of how many races per season will be on network total and cable with the combined deals.
STEVE HERBST: Are you asking about the NBC package or the overall package?
Q. I know the NBC package. I was curious if you could give us any sort of figure for the entire package, at least for 33 of the 36.
STEVE HERBST: So the first half package obviously with FOX, we’re still discussing the mix there, so I don’t have an overall number for you. You see the split for the second half Cup on NBC of 13 and 7, but we are not ready to talk about 13 and 7 for NBC. But we’ll have information in due time on what the total season will look like.
MARK LAZARUS: Let me just talk a little bit about having a balance and having both the broadcast and NBC Sports Network. What we have found and what we have learned and what I think we’ve demonstrated over the past several years is that when we’re able to have a property, whether it’s a part of a season or an entire season or complete ownership of a property like the Olympics, like the national hockey league, like premier league, like NASCAR, like Formula 1, and we’re able to bring an audience and surround it with content, both on broadcast, on cable, in digital by promoting and marketing using our RSNs, that we’re able to bring a level of awareness to a sport, to a property that is frankly unparalleled equal to or unparalleled in the industry, and that’s what we intend to do with NASCAR. By having this mix, what we always do is make big events bigger, and that’s what we’ll do each Saturday and Sunday from July on starting in 2015.
Q. Let me ask Brian, do you consider it a risk at all to go from what I would say is the more obviously an older, more established cable network to one that’s kind of still in its infancy?
BRIAN FRANCE: No, because if you look at what they’re doing right now, and Mark just outlined it, he’s not just talking conceptually. They’re doing that right now with record ratings with the NHL and the integration of the Olympics, Sunday Night Football. I mean, don’t forget, they have a robust lineup obviously without us, and we’re going to add to that in a significant way.
I can assure you from hearing from leadership throughout the Comcast system, they didn’t just want to own sports properties, they wanted to integrate within all their assets, and they’re doing it right now. We don’t have to guess about it. We’re looking forward to it.
Q. I just wonder if you could talk about, it’s probably too early for this since it’s a couple years ago, but will you be bringing over some of the TNT or ESPN or NASCAR on air talent to NBC or NBC Sports, and also, how does this affect the future of the IndyCar Series on NBC and NBC Sports?
MARK LAZARUS: Well, two questions there. Let me start with the talent question: First of all, all those folks are under contract to TNT and ESPN, and we’re respectful of those contracts. It is too early. Frankly this deal began and ended in very short order and expeditiously, so our production team is learning about it in sort of real time here, so they haven’t even spent any energy thinking about talent, though my guess is their heads are spinning and they’re thinking very hard now. We have a couple of years on that.
But what I do promise is that when we hire talent, we do it with the thought of being relevant to the core fan but also being welcoming and open to the casual or new fan, and I think when you look around our Mount Rushmore of broadcasters, whether it’s Al Michaels, Cris Collinsworth, Johnny Miller, Bob Costas and others that I’m sure that I know I’m leaving off, Dan Patrick, that we are second to none both in play by play and analysts, and we will continue that with NASCAR as we move towards the beginning of our contract.
How does it relate to IndyCar? We think that this gives us listen, we have IndyCar rights for NBC Sports Network. We do not own the rights for broadcast. Those are held by ABC and ESPN, by ABC, so we are only the cable partner there, so we are not able to do what we do with other sports by wrapping around it fully.
This will have no impact there, other than that I believe with us now being the home to the second half of the NASCAR season, the home for cable for Indy and the home to Formula 1, that we are one of the probably the most dominant home for motorsports, and that that circulation of motorsports fans will be good for all.
Q. Mark, I have a follow up on what you just said, which is that you’re the dominant home for motorsports. With three racing series that are worldwide, was it NBC Sports group’s design to sort of grab the motorsports market, or is that just sort of how the properties fell?
MARK LAZARUS: Well, you know, a design would be probably too forward thinking. As we saw the way rights were developing over the last 24 months, we saw an opportunity, and as SPEED Channel decided to make its migration to something more multisport, we saw an opportunity to potentially fill a gap in the marketplace that might not be satisfied, and so we set forth, not knowing whether NASCAR would ever be able to us, but we set forth with the others. We inherited the IndyCar deal. We were able to acquire the F1 deal and that gave us the base.
But then seeing the opportunity that might exist with NASCAR, we believed that we can fill a gap in the marketplace for fans, for marketers and potentially with our cable operators and affiliates.
No one else has ever had all three of those.
Q. Steve, I have a question for you, and I may be incorrect, but it’s my understanding NBC Sports Network is blocked in Canada, and one thing we see is a lot of complaints from Canadian fans about their ability to access NASCAR coverage, so how will you address that?
STEVE HERBST: We have a TSN relationship that will continue, and we have broadcast TV, so our broadcast TV will reach Canada. We have the ongoing TSN relationship, and that’s how we’ll service our Canadian fans.
Q. Mark, what did you learn about effectively relaunching NHL hockey on TV that you can apply to NASCAR? And my second question is for Brian: Brian, are you getting an annual rights fee increase, and will we see any races on the new FOX Sports 1?
MARK LAZARUS: What we learned from NHL is two things: One, the ability to have both the broadcast element and the national cable element on NBC Sports Network allowed us to market and promote across both. It also allowed us to build shoulder and ancillary programming around the content to consume and surround the fans that we know already like a sport or a property and give them more of that content. And we will apply all of that to NASCAR.
We’ll also integrate our regional sports networks in that, as well.
The other part that I’ll add is what we have built with all of these tent pole properties is a team of dedicated people that work behind the scenes. I’ve talked a little bit about our broadcasters and our talent, but when you take people that have worked either at NBC or at other places on these properties over time, and whether it’s John Miller, who does our programming, the other John Miller who does our marketing, Sam Flood, our executive producer, who understand the sport, are agnostic to whether it’s on broadcast or cable, we treat it the same no matter where it is, and the fact that they love the properties that we work on, it allows us to really put fans’ interests at heart, and that’s what we will do here.
BRIAN FRANCE: Yes, an answer on the — we will have both Cup and Nationwide on FOX Sports 1 at some level.
Q. This one is for Mark: I’m curious, why the 20 number? Why didn’t you just go 23 and take them all?
MARK LAZARUS: We were offered a package that had 20 in them, so we bought everything that was made available to us. That doesn’t mean we bought everything we wanted.
Q. And then in 2015 Speedweeks, FOX is the primary broadcaster, but are you figuring on having a lot of programming during the FOX side of the contract?
MARK LAZARUS: We’ll be there as a news organization with the ability to cover it like other news organizations I would imagine, and some of this is still being ferreted out, that we’d have some ability to cover it as a little more than just a typical news organization. But we’ll have shoulder programming and access, but we’ll be respectful of their rights and what they have bought, as we know they will be in our half of the season.
Q. And then for Steve, you said that the remaining dates that are available, that you expect those to disappear pretty quick. Is there any kind of rights battle going on, any kind of bidding war for those at this point?
STEVE HERBST: I would just say that the rights are out there right now. The package is there. We expect it to move quickly, and we’ll be placing those in short order, and we’ll keep you posted.
Q. Mark, lots of race fans are listening live right now, and the question is they know there’s a different philosophy or identity of each network. What’s the generic philosophy of covering sports and news on sports for your network, and just a little bit more about what makes NASCAR so compelling for your network?
MARK LAZARUS: Well, the mantra that we live by is two things: One, we want to tell great stories, and NASCAR, what makes it so compelling is there are wonderful stories. There are more than 40 drivers in every race. It’s the all star game every weekend. It’s the best athletes in the sport on the same playing surface at the same time, and it’s each and every week. And whether that’s Saturday or Sunday, you have compelling programming, compelling stories, rivalries that get built over years and years and years. It’s one of the rare sports where you can have multigenerational athletes competing against each other. Every track is unique and still has its own stories. It’s like a golf course in that way; each one has its own way of treating its athletes, and the athletes have to think differently about them, and each of the tracks are like that.
So the stories are incredibly compelling. We believe that we take the time to develop those stories, develop the personality, make sure fans know the rivalries and why they should care about them, and that’s what we spend our time doing in all sports, and we think that NASCAR suits that production value very well.
Q. This question is for Brian: In 2015 when all of the new TV deals are in place, and I know there are still three races unaccounted for, but I think you can still answer this question; will the purses for the Sprint Cup Series races be higher in 2015 than they were in 2014?
BRIAN FRANCE: Well, the purses are formulated not just off of TV revenue, obviously, and they’re formulated by a number of things. But I anticipate that they certainly will be. That would be my guess.
But yeah, this is obviously a lucrative we wouldn’t have made the change if it weren’t a favorable arrangement for the industry financially, and it is, and everybody will benefit from that as every league does.
Q. Brian, two questions: Can you talk about the digital rights that will be a part of this? In essence what will fans be able to will there be essentially this version of RaceBuddy and how you envision the digital rights? And can you talk about the tie in of NASCAR on Sunday afternoons leading into Sunday Night Football? I would presume that’s part of the interest in all this.
BRIAN FRANCE: Steve, I’ll let you address the digital rights on our side.
STEVE HERBST: Yeah, we still hold rights for RaceBuddy. NBC will have exclusive TV everywhere rights for its events and highlight rights for all of its NBC digital platforms. Some of those are still developing and working through our digital chief Mark Jenkins, but that’s generally the snapshot there.
MARK LAZARUS: Yeah, when you get to the fall, when you have not only our wonderful NASCAR schedule but our Sunday Night Football schedule and the beginning of our NHL season, our ability to promote across all three of those to each other we think will be beneficial to all three of those. As we get closer and as the race schedule and the sanctions come through, we will work with NASCAR to lay out the schedule. But we don’t anticipate any disruption in coverage for either NASCAR or the NFL due to this deal. There’s enough latitude that we have with NBC and NBC Sports Network to make sure that doesn’t become an issue. But we do see greatly the benefits of all of our fall properties being able to promote each other, somewhat overlapping but also to somewhat differentiated audiences, with the help of growing them all.