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Sports programming revenues continue to grow incrementally and for good reason. Unquestionably, sporting events provide incredibly engaging content. Decades after ABC's Wide World of Sports stated it so succinctly, Americans are compelled to watch sports for "the thrill of victory and the agony of defeat."
A primary reason that advertisers lean toward sponsorship of sporting events is that athletic contests do not lend themselves to recording and skipping. People simply do not like to watch sports on tape delay. It is hard to get fans engaged in events for which they know the outcomes have been determined.
Additionally, sports events marry well to multi-media. More often than not, fans become actively involved in texting, blogging, and posting to Facebook and Twitter when their favorite teams are playing. Social media turns sporting events into communal experiences, providing electronic catharsis for sports fanatics.
NBC is going hard after ESPN's monopoly on charging premium prices for sports content. ESPN had long been bullish in terms of pricing, given the network's 20-year head start. A number of forces have combined that make NBC a serious player. Parent company Comcast brought the Golf Channel, local Comcast Sports Networks and Versus (now re-branded as NBC Sports Net) into the fold. NBC Sports Net basked in record NHL Stanley Cup playoff ratings due in part to the resurgence of the New York Rangers and compelling players such as Martin Brodeur of the New Jersey Devils, hockey's winningest goalie, and hotshot young goalie John Quick, who led the LA Kings to their first ever championship.
NBC also benefits from the fortune -- more than $1 billion -- that it has invested in the Olympics, which are incredibly important to the network's entire programming spectrum. Since the games occur in August, they attract large ratings and also provide a platform to preview the network's new fall schedule.
The London games will take over entire footprint for 17 days; that's more than 5,000 hours of programming. The games also provide the prestige and multi-media opportunities. NBC will offer 40 different sports that viewers can watch via live stream online. Despite the five hour time difference between London and the East Coast, the Olympics remain among the few programs that we communally watch at night and then talk about near the water cooler the next day. The 2008 Olympics from Beijing were the most watched events ever via online stream. It is possible that the 2012 games will surpass them.
In fact, the Olympics provide so much content that NBC will spread the coverage across its CNBC, MSNBC, Bravo and NBC Sports Network cable channels, as well as Spanish language giant Telemundo. NBC will not stream "marquis" events, such as women's gymnastics and swimming races involving Michael Phelps, until they have appeared on prime time broadcasts.
Lastly, NFL Sunday Night Football is clearly NBC's most effective ongoing programming. The network has live-steamed football contests for four years now. For instance, the exposure that The Voice had following the Super Bowl helped that show build a strong and loyal audience.
Next year, when the Major League Baseball contract expires. Look for NBC to be among the serious bidders. The network is now in an enviable position and has emerged as a formidable competitor to ESPN and FOX Sports. There are billions of dollars at stake, as the networks will be vying for compelling programming that is both popular and DVR-proof. As the investment dollars rise, media companies will expect premium sponsorship dollars. The savvy media buying agencies that target these properties in innovative ways will be the ones who thrive in the coming years.
Steve Kaufman is responsible for the development of KSL's media offerings and maintaining best in class digital and customer acquisition tools. He is a member of the KSL management team helping to guide the direction of the company in the exploration of new media alternatives.
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