Wednesday, 12th March 2008

HEADLINE NEWS

Blue Equity to Merge its Sports and Entertainment Divisions

American private equity firm Blue Equity LLC is to merge its sports and entertainment properties to form a new company, Blue Entertainment Sports Television (BEST). Chairman and managing director, Jonathan Blue, said: "We wanted to make sure that we had the right people with the right critical mass, and once we had that we could announce our new identity".

Blue Equity launched a sports and entertainment division in 2006 by acquiring the business of basketball agent Bill Strickland. The company has since made eight additional acquisitions, including sports events company Team Championship International, FX Sports' former tennis, media, events and television divisions and the businesses of Joel Segal, a top NFL player agent, and Kenneth Crear, manager to musical artists including Janet Jackson. BEST is one of the largest athlete representation firms in sports, with a client list approaching 200. Sportbusiness.com, 11th Mar 2008


INFO BOX

TV Adspend to Hit $123 Billion This Year

Global net TV ad revenues are set to rise 5.8 percent this year to reach $123 billion, according to a new report, led in part by the Olympic Games. The net figures reflect only what was received by the channels and networks, excluding agency commissions, production costs and discounts. The report from Informa Telecoms & Media, Global Net TV Advertising Forecasts, notes that the projections for this year are up on the 3.5-percent increase in net TV adspend posted in 2007.

Pay-TV advertising will bring in $18 billion, the report states, 15 percent of total net TV advertising in 2008. By 2012, net TV ad spend is expected to increase to $148 billion. Pay-TV advertising will grow at a faster rate, reaching $25 billion in 2012, or 17 percent of the total TV ad pie. North America remains the biggest market, with $46.3 billion in net TV ad revenues, followed by Western Europe with $32.15 billion. Asia Pacific is the third-largest TV ad market with $27.7 billion, followed by Latin America ($9.6 billion) and Eastern Europe and the Middle East ($7 billion).

North America’s influence over pay TV advertising is even greater than for the total TV market. It took 62 percent of the total in 2007. This proportion will decline to 53 percent by 2012. The U.K. is the second-largest pay TV advertising market, contributing $2.2 billion in 2007. Western Europe’s total was $4.4 billion. Net pay-TV expenditures in Asia Pacific will hit $1.9 billion, $558 million in Latin America and $331 million in Eastern Europe and the Middle East. Worldscreen, 11th Mar 2008


SPORTS SHORTS

* Thailand-based Fiber To The Home Co (FTTH), claims it will be able to offer the full "triple play" of telecommunications and media services for just 950 baht ($30) per month. Last week the company signed an agreement with the Metropolitan Electricity Authority to lease the utility's fibre-optic network. Kobsak Chinawongwatana, FTTH's chief executive, said the company had now opened full commercial services for its ultra-broadband internet, telephone and internet television services. Under the contract, the MEA has granted a non-exclusive right to use its nationwide fibre-optic network as well as build further connections as needed. telecomasia.net, 12th Mar 2008

* Chunghwa Telecom, Taiwan's largest telecommunications carrier, plans to step up investment in Southeast Asia and expects to spend NT$120 billion ($3.9 billion) in the next five years on capital spending projects, a Reuters report said. The Reuters report said as growth in Taiwan's home market slows and as the island's mobile penetration becomes saturated, the company is hoping further overseas investments would bring the company more profitable projects in fast-growing Southeast Asia. The report said Singapore's SingTel, Southeast Asia's largest phone company, has spent S$18 billion ($13 billion) in recent years buying operators in high-growth Asian nations, and in the bigger Australian market. telecomasia.net, 12th Mar 2008

* Hong Kong Free-to-air network ATV has finally got some good news on the programming front, clawing back ratings share from following its new programming efforts. CSM ratings data for the week ending 9 March shows ATV Home's viewership has increased after they launched four primetime and a late night shows this month. While TVB Jade's share rating from January to March has dropped slightly, ATV's new line up has received positive reaction from local audience, up by 3%. However, TVB Jade, with 68.5% share, still beats ATV Home by 54%. A CSM spokesperson said low primetime rating on both local TV networks was affected by the Chinese New Year, during which the shows were not so popular to viewers. ATV's late night infotainment show, AV Office, which is about examining the cultures of Japanese Adult Video, received close to 12% share for its Monday launch. Marketing-interactive.com, 12th Mar 2008

* China Business Network owned by the Shanghai Media Group will launch on PCCW's now TV in Hong Kong starting from April. A PCCW spokesperson said it was too early to announce advertising opportunities with the channel is still in development phase. The addition of CBN is part of now TV's strategy to reach Chinese investors around the world. Now TV carries more than 150 channels of local, regional and international programming. This channel, one of mainland China's sources of financial news, has 12-hour live programming each day. Marketing-interactive.com, 7th Mar 2008

* PCCW has reported solid gains in its media and interactive businesses, with subscribers to its now TV service up 16% in 2007. PCCW said the number of subscribers to now TV were currently at 882,000, making it Hong Kong's largest pay-TV operator. The company also reported a 70% jump in revenue in from its TV and content business, hitting HK$1.7 billion. Marketing-interactive.com, 10th Mar 2008

* Australia’s cricket team today pulled out of a planned tour of Pakistan because of security fears, soon after twin bomb blasts killed at least 21 people in Lahore, where Australia were due to play a match. Officials of Cricket Australia and the Pakistan Cricket Board, the national governing bodies for the sport, are due to meet in Dubai next weekend to discuss possible dates for a deferment of the tour, which was due to begin on March 29. However, James Sutherland, CA’s chief executive, said that it would not take place this year and could be postponed to 2009 or 2010. Sportcal.com, 11th Mar 2008

* The €3 billion agreement between the German Football League (DFL) and Leo Kirch's KF 15 group to market the TV rights for Bundesliga matches could come under pressure after a move by cartel authorities. Germany's cartel office has written to all 36 first and second division clubs as part of an on-going TV rights for the Bundesliga. According to Kicker sports magazine, the cartel office's questions mean that the DFL will be unable to keep to its timetable for the rights deal. Kirch's group has pledged to pay €500 million per season from 2009-10 for the rights, €60 million more than the league currently receives. The DFL said it would make a statement on Thursday. Sportbusiness.com, 11th Mar 2008

* Broadcast rights for Polish soccer’s top-tier Ekstraklasa could increase in value six times over after the country jointly hosts the 2012 European Championships, according to the president of one leading Polish club. Leszek Miklas, the president of Legia Warsaw, said that a recent 125-million-zlotys ($54.1 million) -a-year deal with Canal Plus Poland, the pay-television operator, and Telekomunikacja Polska, the telecommunications group, could be significantly bettered after 2012, increasing in value to up to 750 million zlotys per season. The new deal, announced in January, comes into effect next season and expires in 2011. Poland is co-hosting Euro 2012 with Ukraine. Sportcal.com, 11th Mar 2008

* Liverpool FC co-owner, Tom Hicks, ended negotiations with Dubai International Capital over acquiring a 49 per cent stake in the club. In a statement on the Liverpool website, Hicks said: "I have decided to terminate further discussions with DIC. I and my colleagues will continue to explore a number of other options with regard to the ownership of the club". Hick's co-owner, George Gillett, is understood to have agreed in principle to sell 49 per cent of his 50 per cent stake to DIC, and the other 1 per cent to Hicks to give him a controlling interest. Hicks and Gillett bought Liverpool for £219 million a year ago. Sportbusiness.com, 11th Mar 2008

* UEFA has reported that a total of 17,644 candidates had registered their interest to volunteer at Euro 2008 by the time the seven-month application process came to a close at the end of February. People from 150 different countries came forward for the process, which will see a final 5,000 volunteers help out at the eight venues in the two Euro 2008 host countries of Austria and Switzerland. The most popular of the 14 volunteer sectors proved to be guest services, media and welcome services. Euro 2008 SA has already invited 8,000 candidates to interviews, which began back in September. "We could really sense the excitement about the tournament in the interviews," said Christian Mutschler, Euro 2008 SA tournament director for Switzerland. All candidates will find out by mid-April whether or not they have made it onto the team for the finals. Football Insider, 11th Mar 2008


MORE NEWS

Elsewhere/ New Media: Eurosport launches in High Definition

Eurosport is set to launch a simulcast channel in HD to cover all major sporting events for which it holds the rights in 2008, starting with the French Open at Roland Garros.The Eurosport group said it has invested in high definition as a key priority for 2008, in a year of major sporting events on the channel which include Roland Garros, the UEFA Euro 2008, Tour de France, Beijing 2008 Olympic Games, and the US Open.

Major carriage deals for the simulcast service in high definition have already been signed in Scandinavia and certain parts of Southern Europe. Further rollout across European markets is expected to evolve rapidly with more contracts to be announced over the coming weeks.

Laurent-Eric Le Lay, Chairman, Eurosport Group, said: "Sport, especially live, is spectacular in high definition; it transforms the viewing experience for sports fans. As leading sports TV channel in Europe and specialists in the live broadcast of big international sporting events, it's a natural move for Eurosport to enrich its TV offer with high definition. Eurosport will offer as much native HD content as possible and will offer more step-by-step. Together with Eurosport 2, Eurosportnews, and our online network of Eurosport web sites, Eurosport in high definition truly enhances our multimedia offer.” Sportbusiness.com, Sportcal.com, 11th Mar 2008

Elsewhere/ Rights: Ufa Sports Agency Set for Dramatic Revival

The Ufa Sports agency is set for a dramatic revival through former owner the RTL Group, after the European broadcasting giant acquired distribution rights for the Albanian soccer team’s 2010 World Cup qualifiers and said that it was interested in becoming more involved in sports marketing. Ufa Sports, one of three agencies that merged to form Sportfive, the international sports marketing agency, will begin business once again as soon as April 1 this year, accordiing to Sponsors.de, the German sports business website.

The RTL Group is said to have acquired the ‘second-party’ broadcast distribution rights for Albania’s forthcoming 2010 World Cup qualifiers last month, allowing it to sell the rights in the territory of the 'away' team. After agreeing the deal, the RTL Group told Sponsors.de that it was ‘to become more active in the future in the sports marketing area.’

Albania’s 2010 World Cup qualifying group features Portugal, Sweden, Denmark, Hungary and Malta, none of which represent Europe’s bigger television markets. It is therefore thought likely that more acquisitions would follow before Ufa Sports could be relaunched. Ufa Sports was formed in 1988 and was at one time responsible for the television and marketing rights of more than 50 national soccer associations and 300 soccer clubs, including Germany’s Hertha Berlin, Hamburg and Borussia Dortmund, in addition to Turkish club Galatasaray, Spartak Moscow of Russia and Brazil’s Vasco da Gama.

Ufa Sports was subsumed into Sportfive in 2002 after merging with the French agencies Groupe Jean-Claude Darmon and Sport Plus. Sportfive was acquired by Lagardère, the French media giant, in 2006, which took over its ownership from Advent International, the private equity group. Sportcal.com, 11th Mar 2008

Elsewhere/ Rights: Skating Chief: We've Got NBC Deal for 2009 World Championships

Ottavio Cinquanta, the president of the International Skating Union, has said that the federation has agreed a deal ‘in principle’ with US national network NBC to air the 2009 Figure Skating World Championships in Los Angeles. NBC will replace cable sports broadcaster ESPN, whose four-year deal with the ISU expires after next week’s world championships in Gothenburg, Sweden. Cinquanta would not reveal the financial details of the deal, but admitted that the short-term arrangement would only cover the world championships.

He told Sportcal.com: ‘There was no interest from NBC in acquiring the rights to any other championships, although it already has the rights to the 2010 winter Olympics through its arrangement with the IOC.’ The ISU is faced with a declining interest in the sport in the USA. ESPN’s deal was worth only $5 million a year, compared with the previous deal with national network ABC, which ended in 2004, which was worth $22 million a year.

Cinquanta said last year that he was prepared to give away for free US television rights for the 2009 World Figure Skating in order to ensure domestic television coverage. Cinquanta recognised the declining interest in the sport in what he said was ‘one of the most important countries for figure skating.’ He added: ‘We are proud that the championships will be shown in the USA, one of the most important countries in the sport movement.’ He said that, with the world championships in Los Angeles next year and the winter Olympics in Vancouver in 2010, figure skating and speed skating would receive a ‘huge boost’ in North America.

As part of the NBC deal, the cable rights for the championships will be held by Oxygen Media, the female-orientated cable television company which NBC acquired last year for a reported $295 million. The ISU signed a two-year broadcasting deal with CBC, the Canadian public service broadcaster, earlier this year which covers the world figure skating championships in 2008 and 2009. The deal also includes the 2009 Four Continents figure skating championships, which will serve as a test event for the Vancouver winter Olympics.

Other high-profile events on CBC will include a 2008 short-track speedskating World Cup event and the 2009 ISU world long-track speedskating championships. The television deals are of crucial importance to the ISU, said Cinquanta, who does not believe that online coverage will boost the exposure of the federation’s three sports, figure skating, short track speedskating and speedskating.

He said: ‘We have been at the cutting edge of technology, having developed the technology for showing replays, which is now used in tennis, back in 1995. ‘But our priorities rest with our partners, the television companies. Internet still needs to prove its worth in terms of exposure. ‘Television has been a partner for 30 or 40 years, why should I ignore companies such as NBC, ABC, CTV and the EBU? If they say they no longer want to work with us, it is a different story. The internet is not yet in a position to be on the same level as television.’

Judging Cinquanta was keen to underline the success of recent developments in the ISU’s disciplines, in particular the introduction of a new judging system in figure skating over the past few seasons, following a corruption scandal at the 2002 winter Olympic Games. He said: ‘We are very satisfied with the new judging system after the case of Salt Lake City. It has been so successful that it has been taken as a model in other sports, including gymnastics and boxing.’ He added that skaters in Asia had especially benefited, as it became more clear what was required to obtain the judges’ top marks.

The ISU’s next congress takes place in June, but Cinquanta played down the possibility of any more major rule changes, saying: ‘It is time to consolidate […] we have done 10 years of innovations.’ Minor changes could, however, be made to the format of ice dancing, a form of figure skating. One change that will not take place is the introduction of an athletes’ commission in the federation, despite strong pressure from national member organisations. Cinquanta said: ‘Our experience so far regarding athlete involvement has not been the very best.

‘We have invited skaters to join the ISU council in the past, but our experience has so far not be good. This does not mean that we have forgotten about them - we have given them the opportunity but they have not taken it.’ While many sports are trying to develop their potential in Asia, the ISU is encouraging the short-track skating movement in Europe. He said he expected a revival of figure skating in Great Britain and Germany, and for the level to improve in the Netherlands. He added: ‘We have 10 different countries in our three different disciplines that can make it onto the podium.’ Sportcal.com, 11th Mar 2008

Elsewhere/ Rights: Joerg's Plan for Euro Championships in Odd Years Is 'Unrealistic'

Marc Joerg, head of sport at the European Broadcasting Union, yesterday welcomed a controversial plan for athletics’ European Championships to switch from a four-year to a biennial schedule, but only on condition that it switches to odd-numbered years. Under Joerg’s plan, space would be made in the calendar for the switch by the sport’s world championships reverting to even-numbered years and a quadrennial schedule, departing from its present biennial, odd-numbered years schedule.

For example, Joerg said, if the new schedule were to be introduced next year, it could take the following form:

2009: European Championships
2010: World Championships
2011: European Championships
2012: Olympic Games.

However, the plan was today dismissed as ‘unrealistic’ by Hansjorg Wirz, the president of the European Athletic Association, which runs the European Championships. Wirz pointed out that a biennial European Championships would not be regarded as compensation for the world championships reverting to a quadrennial schedule by the IAAF, the sport’s world governing body, which is responsible for the world championships. Wirz told Sportcal.com: ‘The [IAAF] congress will never accept it. We discussed that for a long time and Mark knows it is not realistic.’ Joerg himself acknowledged that such a move would be ‘potentially very difficult.’

The proposal formed part of a presentation acknowledged as deliberately provocative by Joerg, which he gave to a forum in Valencia entitled Revitalising One Day Athletics. The presentation was entitled: ‘If the EBU could have a wish... how would one day athletics meetings look?’ The forum, organised by Patrick Magyar, the experienced sports marketing executive who heads Zurich’s annual Weltklasse IAAF Golden League athletics meeting, was attended by athletics meetings organisers, and athletes’ managers and agents and was intended to help to address a perceived decline in the popularity of athletics in Europe in recent years.

The EAA last year confirmed the European Championships’ switch to a biennial schedule on even years from 2012 despite the concerns of some of the biggest members of the EBU, the umbrella body of European public-service broadcasters, that the move will cause them serious scheduling difficulties. The broadcasters are concerned that a busy summer of sport in Europe in 2012, including both soccer’s Euro 2012 European Championships in Poland and Ukraine and the Olympic Games, leaves little space in their schedules for the new event. The broadcasters also expressed concern that the 2012 event could clash with both the Wimbledon tennis championships and cycling’s Tour de France, pointing out that any EBU member acting as host broadcaster of the new event would have particular problems in handling the competing demands of the other major events of the summer.

Concerns have also been expressed by athletes such as Great Britain’s marathon star Paula Radcliffe, who criticised the move to begin the new schedule in 2012 because it will clash with the Olympic Games. Although the championships will be scheduled to be completed four weeks before the Olympics, Radcliffe believes that most athletes will accord them a low priority and that many of the top names are likely to be missing from the championships.

However, Wirz today responded that ‘other athletes say exactly the contrary,’ arguing that younger athletes who are ‘hungry’ for competition have welcomed the opportunity to use the European Championships as preparation for the games. The decision had been made with the full participation of the EAA’s athletes’ commission, Wirz added. He also argued that the EAA’s proposal has been welcomed by some individual broadcaster members of the EBU.

In his presentation, Joerg argued that in the modern, highly fragmented broadcasting market, athletics is struggling to maintain its relevance. Joerg said: ‘I’m concerned that the trend is in the wrong direction. We [EBU broadcasters] are starting to struggle [to attract audiences] at the level of world and European championships. We have to convince the people with the remote control.’

In Europe, the problems are increased by the fact that in international competitions, European athletes are being overshadowed by those from other continents, especially USA in the sprint events and Africa in middle- and long-distance races. Joerg said: ‘There is little relevance for European audiences if a middle distance race is made up of 10 Africans.’ Therefore, he said, more frequent European Championships ‘make sense’ because, by definition, they involve only European athletes, with whom European audiences can relate. Such events would ‘also help European athletics to become stronger.’

Joerg pointed out that athletics is competing not only with other sports for television airtime, but also with other entertainment programmes. However, he argued that athletics could learn from the success of highly popular modern talent contest formats, such as the X Factor, in which the threat of elimination adds drama to the programmes. Joerg said that it is often unclear to audiences why some athletes are taking part in a competition while others are not, suggesting that the qualification process itself could make good television. He said: ‘Athletes are there but audiences don’t know why. Elimination is dramatic. ‘Qualification is your ‘casting.’ An athlete who has to go through the qualification process has a story to tell.’

With respect to one-day meetings, Joerg claimed that the present competition structure is confusing, arguing that, to attract international television coverage, there should be no more than four or five top-tier European meetings, with the best meeting at the end. The top-tier Golden League is presently made up of six meetings and it is understood that the IAAF has been holding talks about increasing this to as many as 10 a year. Joerg said that the best dates should be allocated to the top meetings, adding: ‘There’s no point in competing amongst yourselves or against other much stronger events. Consider competition from other sports and consider broadcasters’ schedules. ‘Determine the best timing to optimise overall impact and keep [broadcasters’] market share in mind. If you are in prime time and you get only small audiences, that is a problem [for the broadcaster]. Afternoons equal smaller audiences, but a higher market share, while evenings equal bigger audiences but a smaller market share.’

Joerg had opened his presentation by issuing a challenge to the meetings organisers, arguing that: ‘Athletics is seen as very traditional and as not reaching young people. It’s up to you to bring the events to broadcasters which will respond to their requirements. ‘If events drive audiences, broadcasters will respond to you.’ He concluded: ‘I still strongly believe that athletics have an important role to play in European TV. One-day meetings are important: the Olympics are not enough to keep athletics in people’s minds. But you have to do something to stay high in the ranking of sports.’ Sportcal.com, 11th Mar 2008