BOB GARFIELD: When ESPN launched in 1979, it offered a patchwork of programs like Australian Rules Football and tape-delayed college sports. Now, ESPN has billion-dollar contracts with major sports leagues to air their games. In fact, it's the 800-pound gorilla in sports media.
But, success breeds critics, and ESPN has quite a few, ranging from league executives to ad agencies, to competing TV networks. Now they've compiled their complaints in a PowerPoint presentation which has found its way all over the place, including the desk of John Ourand, a reporter at The Sports Business Journal.
Ourand says the big takeaway of the presentation is that when sporting events move from broadcast networks to ESPN, their ratings take a dive. JOHN OURAND: So the PowerPoint presentation is really a note to the leagues saying, why are you going into bed with ESPN; you should be with us because we provide more viewers and we get better ratings.
ESPN's side of the coin is that that's a - you know, almost a 1990s way of looking at things. And in 2008, if you're really just taking a look at a health of a league or a health of a network through a three-hour window, you're missing the point because if you do a deal with ESPN, you also get coverage in ESPN.com, you get coverage in ESPN, the Magazine, you can get on ESPN Radio. BOB GARFIELD: Not to mention feeds of highlights of your games on ESPN Mobile. JOHN OURAND: Exactly. NFL is a good case study of this. ESPN got Monday Night Football, and the ratings for Monday Night Football have been dropping. However, if you add up all the viewers across all their platforms across all their hours that they devote to NFL coverage, ESPN says it would dwarf what anybody else brings. BOB GARFIELD: One interesting complaint is the swirling conflicts of interest between ESPN, the partner with a sports league – let's just say the NFL – and ESPN the news network, which covers the sport, warts and all. JOHN OURAND: This is where ESPN finds itself in a no-win situation. They get constantly criticized by the blogs, by viewers, for going too soft on certain leagues because they're partners with them. And meanwhile, on the other side, they get consistent complaints from the leagues that they are being too hard on them.
Internally, ESPN has a very distinct line between the newsgathering operation and the actual people that manage their relationships with the leagues. Outside of ESPN it's harder to tell.
For instance, at CBS, 60 Minutes can do a hard-hitting piece on the NFL, and the NFL, they might not like it, but they know to complain to CBS News and not CBS Sports.
At ESPN, it's all just ESPN. And to add to the problem, ESPN has spent the past year or so poaching some of the best reporters in the business from various newspapers and magazines, and those reporters oftentimes report stories that the leagues just really don't like. BOB GARFIELD: I actually want to talk about not ESPN but the leagues themselves. Some sports are actively trying to dictate the terms of coverage. Can you give me some examples? JOHN OURAND: Well, online, for example, the NFL only allows each website to use 45 seconds of coverage. Major league baseball, I think they went up to like a minute and a half. This is the big issue.
Baseball in January is getting ready to launch its own network where they're going to be news gathering, they're going to be doing games. The NFL has its NFL Network. And by launching their own networks and by launching their own websites, these sports leagues are becoming media companies in their own rights.
And by becoming media companies and owning the content, they're being much more judicious about who can use that content. And we're really seeing a sea change in terms of how the community newspaper or the local newspaper and the local radio station is able to get in and cover these sports and these teams. BOB GARFIELD: Well, this brings us tidily back to ESPN, because as the NFL and major league baseball develop these networks of their own, don't they ultimately jeopardize the ESPN, the 800-pound gorilla, [LAUGHS] and potentially make him irrelevant? JOHN OURAND: Yes and no. ESPN pays the NFL 1.1 billion dollars a year. The NFL doesn't want to let go of that revenue. If they were to take the games that are on ESPN and put them on the NFL Network, there's no way they would be able to bring in enough in terms of ad revenue or license fees from cable operators that would equate to that 1.1 billion dollars that ESPN pays.
On the other side of the coin, you do have something like the Baseball Channel. There's a ton of baseball games out there, many more than the NFL. And I believe that you're going to see increasing amounts of baseball games move to the Major League Baseball Channel.
But ESPN is trying to guard against that happening, and they're doing deals, such as a deal that they did with the Arena Football League. They own part of the Arena Football League so they have product, if all these major sports goes away, that they own and they own alone. BOB GARFIELD: And if a star in the Arena Football League – if there is such a thing - JOHN OURAND: [LAUGHS] BOB GARFIELD: - should get caught committing a felony, how tough do you expect the coverage to be on SportsCenter that night?
JOHN OURAND: I have zero doubt that they would be very tough on them in SportsCenter. And I know that the news division of ESPN causes a lot of headaches for the other side, the corporate part of ESPN. BOB GARFIELD: Okay, John. Thank you so much. JOHN OURAND: Great. Thank you. BOB GARFIELD: John Ourand is a reporter for The Sports Business Journal.