Some positive can come out of new IndyCar TV deal

Mark Cipolloni

To most people, the new IRL TV deal is a complete and utter disaster because it takes the IRL off of the #1 channel for sports fans and places it on a channel that only the most dedicated IndyCar fans will bother to watch. If TV ratings drop because of the deal, the concern is that sponsors will flee, engine manufacturers won't sign on and the league as a whole will lose more money than the $12 million they saved by switching to VERSUS for 13 of 18 races. However, let's try to put a more positive spin on things.

While ABC and ESPN will still be there for 5 of the races, Versus will bring a 200% increase in programming coverage (nearly 100 hours each season), and ABC promises to cross promote the races that will be broadcast on VERSUS.

VERSUS, focuses its efforts on fewer sports, thus enabling it to provide much greater depth in programming and promotion. On ESPN IndyCar is just a small fish in a very big pond that includes a lot of NASCAR programming and few available hours to broadcast ancillary shows.

VERSUS, like ABC, will broadcast all IndyCar Series races in High"Definition, as they added a dedicated HD channel in October.

The NHL has experienced reasonable results through their affiliation with VERSUS. Overall, VERSUS’ NHL coverage for the 2007/2008 season showed ratings growth up 50% for both regular season and playoffs (up from a dismal 0.2 to a still dismal 0.3, but still a move in the right direction), the conference finals were up 71%, and the Stanley Cup Finals were up 138%. In fact, Game 2 of the Penguins/Red Wings drew 2.5 million viewers with a rating of 1.9 and Game 4 of the Penguins/Rangers game actually defeated the competing Pistons/76ers Game 6 on TNT in the coveted 18"34 and 18"49 demographics.

The 2008 Tour de France on VERSUS was seen by 32.8 million viewers, more than any other year, including Lance Armstrong’s final win in 2005, and viewership among men 18"34 during the live broadcasts grew more than 80%. Additionally, experienced 6.5 million video downloads related to the Tour de France.

In 2008 VERSUS will carry 23 college football games from the PAC"10, Big 12, and Ivy League
conferences, which will make more people aware of VERSUS.

If you subscribe to DIRECTV and Dish Network, VERSUS is available to all subscribers in the country.

The key for the IRL is whether VERSUS can buy another one or two more major sports properties. If that were to happen VERSUS will begin to become more of a household name and a go-to channel like ESPN is now.

International Coverage

There is a concern that VERSUS will not give the IRL the same international distribution that ESPN International does. With the new deal VERSUS retains the rights for international coverage regarding their telecasts, while ABC/ESPN will hold the rights for their telecasts. I am told that VERSUS can choose to subcontract the international distribution to ESPN International, or they may choose another path.

A possible benefit to teams and sponsors

When the IndyCar Series evaluated network opportunities (with the assistance of Wasserman Media Group), a major factor in the decision to pursue a partnership with VERSUS, was the positive impact that it would have on key stakeholders of the IndyCar Series, namely the teams and sponsors. These benefits include:

• A minimum increase in on"air presence by more than 200%. VERSUS will provide a three"hour window on race day, a one"hour show the day prior to the race (races telecast on VERSUS) as well as re"airing the races during the week (including those on ABC). As part of the three"hour race day programming, VERSUS is planning pre" and post"race shows, and other ancillary programming.

Programming hours are key to sponsors. Even if the ratings did not increase in 2009, the overall viewership of IndyCar programming (and subsequently coverage of the teams, sponsors, etc.), is set to grow significantly due to the extra hours of coverage, but they may be the same eyeballs watching all the shows so we cannot be fooled by that rhetoric. Taking into account the above mentioned on"air increase, the cumulative number of viewers and households will most certainly be higher than a “rating of the week," which they currently receive from a single race broadcast.

The additional programming hours also provide benefit, as the they can be used to highlight sponsors and teams through specific storylines.

• The IndyCar Series as well as the Firestone Indy Lights will be on a network that focuses on promoting fewer sports, but in much greater depth. Marc Fein, VERSUS Executive VP/Programming, Production & Business Operations stated, “ESPN’s blessing and curse is all the sports properties it has. The position of our network is to go after properties we can own. We want to surround and embrace it (IndyCar). We’re going to promote it a lot more than it has been promoted."

• VERSUS is also set to provide promotional support on a level that is similar to what they currently provide the NHL. As the previous section noted, this has been very successful in growing their league’s viewership. This promotional support guarantees that IndyCar is a “top tier" product for VERSUS (instead of a forgotten stepchild on ESPN) and will be supported as such from a marketing standpoint. This will not only increase awareness of the IndyCar Series, thus driving up viewership, but it will bring an opportunity for greater focus on the teams and the sponsors associated with IndyCar as well.

• The league, and ultimately teams and sponsors, benefit from the consistency and certainty the VERSUS contract brings as it positions the league for growth. In a Washington Times article, David Carter, principal of the Sports Business Group, a Los Angeles"based consulting firm states, “You can’t grow the sport without stability. If you have stability on a network, I think you position yourself to tell a story that can translate into growth over time."

That's the best positive spin I can put on this deal given its early days. It remains to be seen if VERSUS can deliver what it promises, or whether, by signing a long 10 year deal, the IRL has ensured that the IndyCar series will fade away into oblivion for the next decade.

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