ALMS, ABC and ESPN: What does it mean for 2011
What follows is a transcript of Wednesday’s conference call featuring executives from the American Le Mans Series presented by Tequila Patr¢n and Intersport, along with representative partners, team owners and drivers. The group discussed with media members the 2011 ALMS broadcast and digital package with ESPN and ABC.
Mr. Bob Dickinson: Okay, we're going to go ahead and begin. We've got a full program today. I'd like to welcome everybody to today's teleconference and begin by providing a little bit of background and then give a few ground rules.
As you're aware, earlier this week, the American Le Mans Series, presented by Tequila Patr¢n, announced a new multi-year television agreement with ESPN and ABC. It's an agreement we believe is very innovative, as well as comprehensive in coverage, for a series that's not only growing rapidly but one that has certainly prided itself on being on the cutting edge of new technologies.
Today, you'll hear from a collection of persons affiliated with the series and this agreement. The first person you will hear from today is going to be Scott Atherton, who is President and CEO of the American Le Mans Series.
Next, you will hear from Charlie Besser, who is the President and CEO of Intersport, which is a company we worked with to craft and negotiate the agreement with ESPN, along with Scott Thor, who is Vice President of Intersport.
Many of you may recall that Intersport is the company that produced the award-winning "Truth in 24" film about Audi's dramatic win at the 2008 24 Hours of Le Mans, and they have been a huge help in this effort.
These three will speak directly about the new agreement and be able to answer any questions you may have about that. We're going to hold all questions until everybody is finished speaking. We'll conclude with three individuals who have a major presence in the American Le Mans Series presented by Tequila Patr¢n.
You will hear from Matt Carroll, who's Chief Marketing Officer of The Patr¢n Spirits Company. Matt will be followed by Seth Neiman, who is Team Principal and a driver of the Flying Lizards Motorsports, who are the defending GT class driving champions in the American Le Mans Series, and, finally, you will hear from Porsche Factory Driver Patrick Long, also with Flying Lizards, and defending champion in GT class.
Our first speaker today is going to be Scott Atherton, President and CEO of the American Le Mans Series. Scott, we'd like for you to begin by giving us your thoughts on this ground-breaking agreement.
Mr. Scott Atherton: Thank you very much, Bob.
And to all of the participants, it sounds like we have a lot of folks on the line today. I hope we're coming across clearly, and I thank you for taking time out of what I know is a busy week back after the holidays, to join us today.
To begin with, I'd like to just cover some brief history to put what we have announced this week into perspective. A year ago, we knew that we were in the final year of our current broadcast agreement, and we knew that the industry was changing rapidly and that if we wanted to stay a lap ahead, we were going to need a real effort to confirm our future in what is a very dynamic industry in broadcast television in general.
We started meeting with a number of industry executives--and I would call them experts, and there was one theme that kept repeating over and over. And that was that you need to recognize what's happening in social media and what's happening with live streaming.
And all of those elements are good, and they're important, but don't believe everything you read just yet, because you first have to have a core in traditional television in order to make those other elements truly valuable.
So, our goal, from the start, was to retain and ideally improve our core basis in broadcast television with a keen eye on what's coming in the future, very rapidly. To achieve what we knew we had to do, we knew we didn't have the expertise in-house. And for that reason, we aligned ourselves with Charlie Besser and his team at Intersport.
To make a very long and very challenging process much shorter, we, as an organization, could not be more pleased with what we have been able to confirm. And I truly believe it's an example of the best of both worlds.
We have confirmed a direct relationship, for a three-year term, to begin, with truly, the gold standard benchmark of sports television in America, that being ABC and ESPN.
We have broadcasts on ABC Network. We have broadcasts on ESPN2, and that gives us a cornerstone in traditional television that is truly unmatched and puts us in a position that's unprecedented. But, we also have a very valuable element, and that is the relationship with ESPN3.com.
And everyone that I spoke to has referenced this as being the benchmark example that's important today, but it's going to be absolutely critical tomorrow, going forward. So, I believe, as a series, we have achieved the ultimate for our goals, which was to have-that perfect combination.
Now, when you think about ESPN and ABC--I won't go through the numbers, because everybody's familiar with who they are and what they represent to any sports property. It is the goal of anyone in sports, regardless of what genre you reference, to be linked with ESPN and with ABC. So, we couldn't be more pleased about that.
The other aspects of this relationship that opens up to us through this agreement that we've achieved is all of the other ESPN properties. And I think Charlie Besser can speak even more eloquently than I can.
I want to be careful that--it doesn't guarantee we're going to be on the cover of ESPN The Magazine next month, but it gives us a foothold in all of their properties, whether it be Sports Center, any of their digital media, and, of course, the core of what we are directly linked to, that, frankly, we just haven't had in the past.
So, I'm sure there's lots of questions. There's more information to come from the others, but from the series perspective, we feel like we've achieved beyond even our highest expectations in this program that we've been able to put forth. Bob, back to you.
Mr. Bob Dickinson: Thank you, Scott.
You heard Charlie Besser's name mentioned a couple times in Scott's remarks, and Intersport was clearly very integral in--played a very integral role in the ESPN/ABC agreement. So, next, we'd like to have Charlie Besser talk a little bit about Intersport's relationship with ESPN and what they deem is--are the critical points of this new agreement. Charlie?
Mr. Charlie Besser: So, my name is Charlie Besser, and I'm the Founder and CEO of Intersport. We just celebrated our 25th Anniversary, and we are one of the largest independent producers and packagers of sports media in the U.S.
We have a very, very longstanding relationship with all of the networks and a particularly close relationship with the guys--or actually the people at ESPN.
When we took a look at this opportunity, which Scott Atherton, by the way, has laid out just about perfectly, we thought that the only way to do this right for the ALMS series was to create an integrated media approach. And that is one of the reasons why we so actively pursued ABC/ESPN.
So, what we have come--what we've come away with is a truly integrated platform for the American Le Mans Series. We are on ABC, we are on ESPN, and we are on ESPN3. We also have the opportunity to be on ESPN International, and that will create a lot of opportunities, I think, for the series, because, obviously, there's a global interest in this form of racing.
It also provides us with the opportunity to participate in ESPN's multiple news services. Obviously, Sports Center being the lead one, ESPN News being lead--being critical as well, it provides us with the opportunity to be--have exposure to ESPN The Magazine and, obviously, at ESPN.com.
So, when we looked at this, we saw the--we saw a--we looked at this in the context of where the world is going. Scott has accurately pointed it out: we needed a super-solid, high-profile television presence, which we have with ABC and with ESPN, and we wanted to have a super-solid, strong and fast-emerging digital partner. We have that with ESPN3.
We also wanted to have the international opportunity, and, obviously, ESPN International is a robust platform that continues to grow. So, that was our thinking as we went at it.
We've had a blast working on this. The team at ALMS are great people. They've got true passion for what they're doing, and, in our judgment, is way more fun to work with that kind of a group than anyone else.
Now, I want to introduce you guys to Scott Thor. Scott Thor worked on the day-to-day development of this plan with the people at ESPN, and he may have another comment or two that could be helpful.
So, Scott Thor--?
Mr. Scott Thor: Thanks, Bob. Thanks, Charlie. And obviously, thanks to everyone on the call.
I think the most important [aspect] is, as we've approached this, you know, for 25 years, as Charlie mentioned, you know, we've been sports producers and we know that there's a very passionate core audience here that is going to appreciate the package that we've presented.
When you look at what we're able to do on the ESPN3.com platform, for example, we're going to have 100 percent coverage of qualifying--100 percent race coverage that they're going to be able to engage with at home, at work, what have you. So, I think that is--that's going to be critical for the core audience. And then, we're going to be able to expand that audience network reach with ABC, obviously with ESPN2.
So, I think one of the other parts that we're so excited to bring to it, outside of the distribution, is some of our production expertise to really kind of [complement] what they're already doing but really tell some interesting stories.
I know we've got--you know, we've got Patrick on the phone--you know, and really develop these guys and bring them to this larger audience so that more people are going to engage with the great characters and, really, the great racing that the ALMS represents.
Mr. Bob Dickinson: Okay. Thank you very much, Scott Thor. Thank you, Scott. Thank you, Charlie.
Next, we're going to have Matt Carroll. Matt is the Chief Marketing Officer of The Patr¢n Spirits Company - also presenting sponsor of the American Le Mans Series.
Mr. Matt Carroll: Thank you, Bob. I appreciate it. I'll be brief, but I couldn't be happier with the new agreement, the new partnership. We got a little taste of it last year when Chuck was around with the crew, and I really, really did like the format. But, now, with this huge increase in high balls, in households and international coverage, you know, it couldn't be any better for us.
And, you know, we started out small in this league and this series, and we're really happy with the way it's grown and the opportunities it's extended to us as sponsor.
I touched on the format a little bit. And it was great that we had the two [docu-dramas] last year, but I think expanding it this year is great. But, also, having that ESPN3 coverage with hard core race enthusiasts--you will be able to see it from beginning to end, which we--you know, we definitely don't want to alienate any of them, but we'd certainly have a better chance of improvement of new non-hard core. So, we're really happy about that.
You know, as far as international, that couldn't be any better for us as well. We're growing. We're really expanding rapidly throughout Europe and Asia. Our numbers are getting better every year. We're getting a lot of rope out of that, and the race fan over there is great.
You know, we've got a lot of things planned as far as activation and hospitality. We're going to change some things up next year. A lot of that is due to this new contract. So, we're really happy and excited to get rolling. So, thanks for letting me present.
Mr. Bob Dickinson: Okay, Matt. Thank you very much for your thoughts and your comments. I'd like to move next to Seth Neiman, who is team principal of the Flying Lizard Motorsports and driver. Flying Lizards, as many of you know, have won back-to-back GT championships. Seth, we appreciate you taking time from your busy schedule to be with us today. Can you give us a couple of your thoughts on this new television package?
Mr. Seth Neiman: Thanks, Bob. You know, a lot has been said about the leadership and the innovation. I think the important thing, particularly when you're innovating, is to make sure that you're innovating in a direction in which your partners and your customers want and need to grow. And to me, that is the most important and exciting thing about all of this.
Our partners: Porsche, Michelin; our sponsors: eSilicon, Openwave and ShorTel, have, for a number of years, looked to us to find a way to give them not just broader exposure and a specific kind of experience at the racetrack for their partners and customers, but assistance in moving into the new world - the new world of Web-oriented media, watch-it-when-you-want-to and repurpose of content.
Mr. Bob Dickinson: Okay. Seth, thank you. I'd like to continue with Patrick Long. Patrick, as many of you know, is Porsche factory driver for the GT Champion, Flying Lizard Motorsports. He is a driver who has won every major endurance race in class in the world in the 24 Hours of Le Mans, to Sebring, to Petit Le Mans, the Daytona 24, and, with his teammate, Joerg Bergmeister, will be back to defend his title this year in the American Le Mans Series. Patrick, from a driver's perspective, tell us what a multi-platform exposure on ESPN and ABC means to you guys.
Mr. Patrick Long: Well, it's exciting. Thanks for having me. ESPN rings very close to home for a lot of us. It's extremely exciting. I get a lot of comments from fans, followers. I feel like sometimes I can carry the flag through international travel and other types of racing that I'm doing. And it's been received very, very well, and there's a lot of excitement around it.
You know, on a personal note, I remember waking up and watching ESPN Speedworld as a kid, racing from IMSA, from F1, getting up early in the morning, so it's very, very special and kind of full circle for me.
From a professional side, working with Intersport this past season, there really is no other way to put it. And, you know, it's the most professional organization that I've ever been with on the media side, so that's another exciting element.
You know, it rings true to me as a driver but also as a fan. You know, there's been many times in the last couple years where I'm trying to catch a race or a sporting event, and I've, you know, run into that side of not finding it on television or online, you know, set up properly to see the race or the sporting event that I want to see.
And I think that the most exciting part about all of this is it seems the bases are covered from the network side, the cable side and the online side with ESPN3. You know, I have a lot of family and close friends that probably represent a lot of what our fans represent, and they want to be able to follow us live. And I think that's really, really cool that they can see us, not only, you know, in qualifying and in the race, but live, through and through, from beginning to end.
And so, all in all, it seems like we have our bases covered with the passionate fans that we already have and also the future. We all know that the generation is coming up strong and, you know, they want to have the access online.
Mr. Bob Dickinson: Great. Thanks, Patrick. Certainly, a lot of different thoughts and perspectives today from a wide collection of those who were intricately involved in the series.
Let's begin the portion of our program, now, where we open lines to media for some questions. Ground rules will be: if you are a member of the media and have a question, please announce yourself, your media affiliation, and to whom you would like to direct your question. So, with that in place, who would like to go first?
Q: This is for first, for Scott and Charlie and then a second question for the Flying Lizard guys.
The first question is, I'm hearing words like "innovative" and "super-solid" and "high-profile," but I'm not hearing words like, "live television." And that kind of sounds like these are all buzz words for, "We swung for a homerun, but we got a ground rule double." And a lot of the people I've talked to in the last 24 hours have thought that to be the case as well. So, I hear all these great things, but I wonder what the real effect of not having live coverage on a broadcast cable network will be for the series. And especially given the fact that there's a large portion of the population that will not have access to ESPN3 for the live coverage.
Mr. Scott Atherton: Okay. Scott Atherton speaking. I respectfully disagree with your observations that we're papering our comments with buzz words. I hopefully spelled out what our criteria was to begin with, and that was having that strong basis in traditional television.
Candidly, the ability to put the 12 hours of Sebring on live television, as has been done for many years--it's not only not an option for us, I don't think programming of that ilk is going to be an option for anyone going forward.
The industry is evolving at a very rapid pace, and for us to at least have the opportunity for people to view all 12 hours of the race plus a pre-race show and a post-race show and the qualifying the day before, I think you, perhaps, are maybe not as well versed with what's coming.
If you looked at USA Today yesterday, the front page cover story was the fact that WebTV will be the big story of 2011. And for the first time, it appears to be a legitimate alternative to a traditional cable television link.
And, you know, I--if we have the ability to put all of our races, in their full duration, on live network television, candidly, of course we would. But, I think we have struck the best possible arrangement that gives us a strong basis in traditional television and also has that opportunity for someone that truly wants every lap of every race, and then some, to engage in a platform that, today, might seem to be a bit too innovative for some.
But, at the pace things are evolving, I think it will be very soon referred to as a mainstream alternative. Charlie?
Mr. Charlie Besser: I could not agree with Scott more. But, in the reality and the world as it exists today of broadcast network television, there--when you think about the length of the races that we're talking about, there is zero opportunity anywhere to create that kind of distribution model.
What we have done--and the elements that make this a homerun are the fact that ESPN3--or ESPN.com is pretty easily accessible. I can't understand how someone would say that they don't have access to it, because, I think, basically, all you need is a computer. What we have done is, by having half of the races on ABC, we create the opportunity to expand the audience level, expand the audience base, for the American Le Mans Series significantly, well over what would've been available at any other media distribution outlet, and being able to take the other half of the races and put them on ESPN2.
And then, as Scott Thor has developed, to have re-airs of the races, re-air--encore airings of races on the ESPN of Family Networks takes what we have--what--takes the American Le Mans Series to a whole new level of distribution and opportunity for exposure to a wider base of an audience. And for the hard core fan that does like watching every lap of every race, that's what ESPN3 exists for.
Moreover, the ESPN International opportunity can be different, where ESPN International can take either the edited version of the race or they can take the full-length version of the race, depending upon the market that they are in and the level of interest.
So, I--frankly, as you--I'd love to hear who you're talking to that says that this was a ground rule double, because I just can't imagine how it could be better. I just--I can't. Now, maybe it's possible, if somebody knows something that I don't know, but to refer to it as a ground rule double is evidence, in my judgment, of--maybe not of complete understanding of what's involved in trying to put one of these things together in modern day--you know, given modern-day programming scheduling and audience level.
Q: My second question was going to be, does it make it more difficult to sell sponsorship without having that live broadcast even present?
Mr. Seth Neiman: This is Seth. I'll take that. On the contrary, it's the other way around. For the most part, the important significant sponsors and partners have asked us to the broadcast television medium in many different ways.
What they don't have access to is effective, web-oriented marketing that's associated with the hard core demographic, as has already been said. And that's why they're excited about this.
Every year, of course, I review with our sponsors their objectives. And they've never said to me, "Can't you be live," you know, "full-length races on standard television?" It's not their interest. They have other ways to access that. And our product, as a platform for them, just--it doesn't--that's not their objective.
Q: The question is, you mentioned that this is in recognition of not only having a core for broadcast, but to be able to say--lay a keel or have access to, you know, expansion into new media type of interactions along with social media. What are your plans to have, I guess, additional social media interactions during the course of the race, along with the use of ESPN.com?
Mr. Charlie Besser: --This is--yeah, this is Charlie Besser. I'm going to turn it over to Scott Thor. But, that is a great question, and there are some very, very exciting things that are going to be able to happen. And what Scott will tell you--unlike the National Football League or major league baseball, where all Twitter accounts have got to be stopped--there's no tweeting 15 minutes before the game, up through multiple hours after the game, we've got special opportunities.
Mr. Scott Thor: Thanks, Charlie. Yeah, I think that part of the overall excitement that Intersport's had is--working directly with the ALMS is how innovative the thinking is. And social media is just one of those aspects.
And we've approached the ESPN as our partner. And John Evenson has even reiterated to them, "Let's really push the envelope." You know, for instance, with the ESPN3.com platform, you know, integrating in-car cameras and multiple feeds, things that that platform has not even experimented with yet.
And with social media, again, working directly with, in this case, the rights holder, we're able to integrate drivers into the social media aspect of the broadcast, have them commenting and engaging directly with fans during driver switches.
I also think the social media aspect is going to be important, especially for a series like this that's racing nine weeks out of the year, to provide that kind of connective tissue with the audience over the course of the season, keeping them engaged in what's going on and keeping them engaged, obviously, with their favorite teams and drivers.
Q: But, I suspect, with this type of direct interaction hooking the drivers in, being able to record with the additional social media nuance, that it could really lend a whole different kind of an experience to watching a race.
Mr. Scott Thor: We would definitely agree with that. I think what you guys are going to see with the launch, with winter testing and with Sebring, some very different changes around social media and how we're able to interact with the audience around the races.
Q: Scott, looking at the announcement that came out--I know, in speaking with some of your staff, there's some more elements to the new package. Maybe--I guess the question I would have is, I know that we've--I've personally gotten a ton of e-mails and communications asking, "Hey, I'm in Canada. I don't have ESPN3. How can I watch this?" I know that people will be able to watch live races on ALMS.com, but maybe--are there some other elements about this package that you might put out sooner than later? Kind of an FAQ on--to answer, maybe, some of the questions that you've gotten over the past few days about the full package?
Then, the second question is, will we have Radio Le Mans back next year for those of us who would like to maybe listen to the races?
Mr. Scott Atherton: First question, first answer - yes is the short answer. We have--you know, this is a bit of a learning experience for us, as well. We anticipated what we thought would be the majority of the questions, not all of them.
We do have a FAQ sheet that is being developed as we speak that's a collaboration between our office, Intersport and the ESPN folks. The one example that you gave about--because I didn't realize how many fans we had in Canada until we issued this TV announcement.
They will have access to a broadcast. There are several different means that would enable that. I won't go into the details of it right now, but there will be an ESPN option that would be available to them, and as you mentioned, all of our full produced, full length live broadcasts will be available also on americalemans.com. So, there is--there are more details and questions to be answered as the issues arise, as you've pointed out. And I'm sorry, but I--if you could repeat your second question.
Mr. Scott Atherton: Absolutely. American Le Mans Radio will continue. There is some discussion right now of whether or not it would be a standalone broadcast or be the audio portion of what would be the ESPN3 broadcast, ESPN3.com. But, sufficed to say, American Le Mans Radio will be back. And we are also expecting to continue with that format on Sirius XM, as well.
Q: I have a few questions. The first one is Speed TV is approximately in 65 million households and Versus in about 60 million households. Can you guys give me a number of how many households ESPN2 reaches? And also, the second part of that first question is how do you plan to activate, follow people that go to ESPN3.com to watch the races?
Mr. Scott Atherton: I'll answer that and Scott Thor can correct me. I believe the current household delivery of ESPN2 is 99.7 million households. And that's only behind the terrestrial broadcasters, which reach 114.5 million. Did I get those numbers right, Mr. Thor?
Mr. Scott Thor: That sounds correct - 115.9 is ABC, 115.9, and you were--and ESPN2 is 99.7 Another interesting fact - ESPN3.com will have telecasts of potential to reach 65 million households.
Q: Which max--which according to my figures is the same number that SPEED reaches now currently via TV.
Mr. Scott Thor: Correct, that's probably about right.
Mr. Scott Atherton: Yeah, your second question, Rick, about follow--you know, how are we gonna activate and drive people, that's a great question. And I will tell you that another aspect of our overall marketing plan was to reengage with an agency of record this year.
We are in the middle of a very comprehensive strategic plan that will have a multifaceted approach, because what we don't want to do is focus solely on one aspect of this multi option platform. And, yes, it will be important to educate people that the American Le Mans Series presented by Tequila Patr¢n is now found in the ESPN ABC family of networks. And all of those races will be available live in full length on ESPN3.com, and then there'll be the other options of ABC and ESPN2.
So, we know we've got a challenge on our hands that we must communicate to both our core audience, that group that reads every word we print and watches every lap of every race, but we also know that if we're truly gonna realize the benefits of this new arrangement, we've got to cast a much wider net and bring those general eyeballs into our fold the way that we've described earlier in this call.
So, we don't have specifics. I mean, we could talk about everything from, you know, having Auto Week and Road and Track, you know, bag a schedule in their February issues that would have the details of all of our broadcasts, and that might be, you know, a basic, basic example of something we'll do. But, I can guarantee it'll be a comprehensive approach to that to make sure we realize the true benefit of all of these opportunities we've got before us.
Q: Scott, along those same lines, who's responsible for fostering the other entrees into the ESPN properties as far as Sports Center or ESPN, the magazine, or ESPN News, etc.? Who's gonna be the liaison between the series and ESPN to get more exposure?
Mr. Scott Atherton: Well, I don't think we could have a better ally in our court than Charlie Besser and Scott Thor. As Charlie mentioned, and I think he undersold it a little bit, Intersport is the largest independent supplier of content to ESPN period full stop. So, the relationships that they have are unmatched and second to none.
There's another aspect of it, though, that is even going to be, I believe, as effective. And I'll give you one example. When we sat down with General Motors and we shared with them our plans at the time, because it was unconfirmed, but we shared with them what our vision was for our future television, their Global Marketing Officer lit up and said, "If you guys can pull this off, we will be your strongest partner because the relationship that we have with ABC, ESPN and Disney is second to none, and we will leverage this to its full potential. This is the best news we could have expected to hear from you. And as soon as it's official, let us know so we can go to bat for you."
So, I think it's gonna be, you know, multiple sources that are leveraging on our behalf with ourselves at the top of that list, Intersport right next to us, and then our other stakeholders who have an equal interest in seeing the true benefit of this new alliance, you know, be fully exploited.
Q: And then, I have one last quick question. The Sebring Race and the Petit Le Mans Race, the two ILMC rounds, do those two races--how are the TV rights dealing with the ACO as far as overseas broadcast, etc.--does that impact you guys at all? Is that something to be worked out still? You know, fill me in on those two events.
Mr. Scott Atherton: Yeah, I don't know that impact is the right word, but it does involve a separate agreement because they are--they the ACO--and for those of you that are not familiar on the call, the ACO is the organizing entity of the 24 hours of Le Mans, and that's who we have a licensing agreement with for the American Le Mans Series presented by Tequila Patr¢n.
Two events – Sebring and Petit Le Mans – are part of the Intercontinental Le Mans Cup, and therefore have a separate treatment in terms of their international television rights. Right now, that is very much a work in progress. We haven't hit any stumbling blocks that are creating issues for us. It's early days yet.
The ACO is actually coming to town next week to meet face-to-face to cover a broad selection of issues, one of which is international TV for those two races. So, watch that space.
Q: Yeah, hi, guys. Charlie, just as an aside, I have a computer--in fact, I have a lot of computers. And I am one of the people who has a cellular modem for my internet connection and I can't get ESPN3. And apparently, there's no plans to make that available. So, there are people that have computers that can't get this.
But, the question I've got is Intersport will be producing this in my understanding, and do you have any talent yet, do you have any on air plans for who'll be hosting and broadcasting?
Mr. Scott Atherton: John Evenson is the Vice President of Broadcasts and Television for us. So, John, if you wanted to respond to that question, please.
Mr. John Evenson: Yes. We've been working on production planning. That'll be a very collaborate effort. The American Le Mans Series will produce the races with a tremendous amount of support, consultation, coordination, input from our friends and partners at Intersport. We've worked on this a great deal in recent weeks as the deal was--as the distribution deal was coming to a conclusion. And I've been working with Scott and his team, Scott Thor.
We're working on all kinds of logistics, which we don't need to go into in this call, from staffing to equipment to in car cameras to everything else. And there'll be more information on that coming out as we move through January. But, I would call it a cooperative effort between the American Le Mans Series and Intersport.
Q: Okay. So, no on air talent you can announce at this point?
Mr. John Evenson: I can't at this point. We've had some conversations with a number of talent. We are trying to form a team that could do all nine of the races to have some [continuity] all the way through. It's an interesting situation because we're producing multiple programs. We're producing fully produced with graphics, everything, streams. We're producing collapsed programming that could air that same day or the next day. There's different ways to attack that. We've had a couple of calls involving Intersport and ESPN Productions as to how it would be best to attack that. So, I can't answer you right now. You'll be seeing announcements about that very, very shortly.
Q: Okay. And how does--how do commercials work on ESPN3 since I can't get it? Are--do you have conventional commercials or do you have streams across the bottom? How do you handle sponsors with that broadcast?
Mr. John Evenson: Scott Thor may want to answer this, but if I'm wrong, Scott, please correct me. ESPN3.com follows the same commercial format as ESPN2. So, whether or not we'll utilize all of that commercial inventory or take all those commercial breaks, ESPN2--I mean, ESPN3.com prefers to have fewer commercial interruptions. I think where we'll end up is more action and probably less commercial interruptions. But, I can't give you the statistics on that quite yet.
Q: Okay. The other question I've got is you guys have mentioned several times you have better access now to ESPN's other platforms like ESPN, the magazine, and ESPN.com. Is that--it almost sounds like, you know, part of the negotiation was that you'll get more editorial coverage. And is that true, or am I just misreading that?
Mr. Charlie Besser: This is Charlie Besser. On access--ESPN does not, as you might imagine, negotiate access to editorial coverage. I mean, they make their editorial decisions based on the interests that they feel our audience has for the subject matter. The fact that we are more intimately involved with them, the fact that they are gonna have a greater exposure to what it is we're doing we think will create a natural extension to interest the editors and the writers at ESPN.com as well as ESPN, the magazine.
But, no, we--I'd be--it'd be unfair to say that ESPN editorial was sitting at the negotiating table and was participating. But we also know how the world works and the world works in the fashion that, as the more exposure they get to it and the more understanding they have and the excitement and the interest and the cool factor of this series, I think it becomes--it just naturally builds upon itself.
Q: I'll put the questions to two people, actually to Seth and Patrick both. To both of you gentlemen, with our audience now reaching the potential of 115 million, you obviously have a much greater excitement, a greater responsibility and an opportunity to showcase your race team, and maybe even more importantly, your sponsors to a whole lot of people.
Part of that challenge--I'm looking at the schedule here, and you're racing in Baltimore on the 11th of September, and yet on the 16th, only five days later, you've got qualifying at Mazda Raceway. Assuming that you've got a cross country track, and at very best, if there's no damage to the cars, that's a major, major chore.
So, number one, are you considering putting extra crew on this year because of this commitment to television and all of these people or even perhaps extra cars, even that car on the West Coast, to make sure that you will always have a two car entry? And to expand a little bit on that, does the continuity of your racing now, because you guys are--you're like a football team in the NFL where you've got this group, a core group that have been with you a long time, know how to work on the cars, know how to prepare them, and that's an added strength.
Mr. Bob Dickinson: Seth, before you answer that question, I will point out that the telecast for Baltimore is an ABC telecast September 11th, but the race is actually Saturday, September 3rd. So, that may impact a little bit of how you answer Bill's question, Seth.
Mr. Seth Neiman: So, yeah, this is Seth. Bill, I think your question is something like how does the wider audience affect how we prepare this team and focus on the delivery of our portion of it. And to be honest, it doesn't enter in any material way.
In terms of tight spots in the schedule, you know, for years, we've faced racing at Le Mans and then qualifying Lime Rock nine days later, and we managed to sort that out. So, I'm not too concerned about that.
The bigger challenge, I think, will be as our sponsors understand how to take advantage, particularly of the internet and delayed content usage elements of this, you know, we're gonna have to grow with them. Anybody who spends a lot of time talking about the evolution of media and who is responsible for spending dollars around it is aware of the complexity that you face in making sure that you understand how to deploy those dollars effectively while still being experimental.
So, we expect to get, you know, turned up in that a little bit. But, that's where our sponsors and where we'd like to be.
Mr. Bob Dickinson: Next question for this group?
Q: I have two questions real quick. First of all, I guess to Scott, does this--is what I'm hearing you say, is this the end of over the air live broadcasts for Sebring? Is that what I'm hearing?
Mr. Scott Atherton: If you're referring to SPEED's coverage as being over the air, then the answer would be yes. We are no longer affiliated with SPEED. And the live broadcast of the 12 Hours of Sebring will occur on ESPN3. The following day, there will be a 90-minute show on ABC, and then later that week, there will be an encore airing of that same broadcast on ESPN2.
Q: And how has this announcement been received by the ALMS fans? I mean, you've got an ALMS Fan webpage. What's their reaction to this event?
Mr. Scott Atherton: You know, it would be safe to say mixed. For people that are absolute followers of every lap and people that pride themselves on, you know, I stayed up and watched the 24 Hours of Le Mans all the way through the night, they have obviously given us a comment that, you know, they're not happy about this.
I think there's also been some confusion that people don't realize what opportunities they will have either available to them now or soon will have in terms of being able to watch that ESPN3 broadcast on their 56-inch flat screen in their living room as opposed to their laptop. And I'm the first one to acknowledge that that doesn't apply to the entire population.
But, as has already been pointed out earlier in this call, there's 65 million households that get SPEED Channel, and there's currently today 65 million households that get ESPN3. The difference is ESPN3 is growing exponentially.
And whether you pick up Sports Illustrated or USA Today or the Wall Street Journal, they're all screaming headlines about how the television environment that we all operate in is changing at an unprecedented pace. And the normal terrestrial broadcast environment that we've all known for the past 50 years is about to be turned on its head.
And while we may take some arrows early on because we are the first mover to take our motor sports platform outside of a traditional standard terrestrial cable television environment, which obviously, we've already said we have firmly intact, but we have added this other element of a live web TV component, just like was the case when we introduced ethanol fuel, we were the only ones out there, and we've become an easy target. Now, virtually every form of the sport has incorporated green technology and sustainable fuels and renewable fuels and it all sounds like it's brand new.
I'm gonna tell you right now that within the next 18 months, two years, many other forms of not only motorsport but all forms of sport will be embracing the same platform choices that we've announced this week.
Q: What I'd like to know is, when you get your agency online with you that you were talking about earlier, is there gonna be some, I'd almost say, viral relationship to go out to the various websites that represent the enthusiasts, whether it be in my case the feedback on Corvette.com, Corvette Forums, Digital Corvette, SCCA in Southern California all have looked at this as a tragedy almost if you follow their threads, and it's anything but.
Is there going to be some active way of hitting--since you're going out into the social media and you're going out into the internet, is there some way to start working with those major forums--I'm sure the same thing for Porsche, Audi--so that they get the right story? I mean, obviously, the media will do it and they'll read magazines, but it would seem faster and more personal to go out into the various forums and have some kind of working relationship.
Mr. Charlie Besser: This Charlie Besser, and I'll--I think you were directing the question to me, and there's others--there are others here that can answer it better. But, I will tell you that we will be directly distributing content, whether it be in the form of text, whether it be in the form of video, to important sites where the ALMS fan base lives.
Part of being effective in the digital world is being able to, you know, fish where the fish are. And so, there will be plenty of opportunities to take advantage of those what we view as distribution opportunities by taking the information directly to the fan base. So, Scott Thor, you may have more.
Mr. Scott Thor: I think that answered the question if that's in fact what it was related to.
Q: I just want some clarification on the numbers. We're talking SPEED has 65 million, and I assume that means available if someone wants to punch the numbers on their remote. And you're saying, I guess 65 million availability with ESPN3. I'm trying to find--figure out exactly what that means. And do you have a number that's been the largest audience that ESPN3 has served, I guess people that have logged on and looked at one particular event? What's the largest broadcast they've had in terms of reach?
Mr. Scott Thor: I could answer a couple of those, and then we'd probably need to get you the largest audience number. But, basically, when you look at that 65 million homes, that represents currently 90 percent of US households that have broadband. So, that's a pretty significant number to the point where they're saying the usage is even outpacing the distribution growth.
So, 65 million households, which represents availability in about 90 percent of US broadband households. So, I know there's been a couple of questions about people that don't get it, you know, but those numbers virtually represent, you know, people that are--people in the minority that aren't getting it just yet.
So, I know with the FIFA World Cup and with Wimbledon this summer, they had some pretty significant numbers. I could--I don't have those in front of me but could probably get to share with the group what the largest viewing audience has been thus far.
Mr. Bob Dickinson: Okay. I am going--we have been on the call now for 75 minutes, and I am going to thank everybody who has participated, particularly our speakers today. As Scott Atherton alluded to, we will be preparing some FAQs in concert with Intersport and ESPN that may dive you in deeper into some of the subjects that were raised today.
So, I'm gonna say thank you and stay tuned because there are exciting times ahead for the American Le Mans Series presented by Tequila Patr¢n on ESPN and ABC. So, thank you very much for being with us today, and we will certainly be reaching out as the weeks and months go forward. Thanks so much.
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