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Media column: WQAM bids for Dolphins radio rights; Heat nears radio deal; Challenges, difficulties for ESPN on eve of big weekend

 

MEDIA COLUMN

 

The Dolphins are shopping their radio rights, and WQAM-560 has emerged as a serious challenger to WINZ-940/ WBGG-105.9 FM, whose six-year deal is expiring, according to industry sources.

Meanwhile, 790 The Ticket also has been asked to bid on Dolphins rights and hasn’t ruled it out but instead has been focusing on retaining Heat radio rights. The station and the team are closing in on an agreement to extend their deal beyond this season.

The Dolphins sent several local stations a proposal making clear it’s seeking a substantial rights fee. As perspective, the Steelers receive nearly $6 million per season for their radio rights, and Pittsburgh is a smaller market than Miami-Fort Lauderdale.

The Dolphins also would like for the games to continue airing on both AM and FM.

Under terms of the expiring contract, iheart Media (which owns WINZ and WBGG) allows the Dolphins to keep a large chunk of the ad revenue and not only carries games but also airs a three-hour weekday afternoon Dolphins talk show, which has considerable promotional value for the team. (Two hours are simulcast on Fox Sports Florida.)

WQAM previously relinquished rights because the station was losing a bundle, according to a former station executive. But WQAM has changed ownership since then, from Beasley to CBS, and CBS has serious interest in landing rights.

Incidentally, the Dolphins choose their radio announcers, with input from the station. So while Joe Rose would remain in place whether games stay on iHeart or move to CBS, it's unclear what would happen to Jimmy Cefalo and Bob Griese.

Though Nielsen doesn’t release radio ratings, one local executive said Dolphins rights provide bigger ratings value for iHeart’s FM carrier than its AM carrier.

WQAM and The Ticket declined to comment.

### On the TV side, Dolphins games averaged a 15.8 rating in Dade and Broward counties this season, down from the 16.9 last season, and worst among NFL markets with only one team.

ESPN'S CHALLENGES

This will be a beat-our-chest next few days for ESPN, which carries two of the most significant events that it owns --- an NFL playoff game on Saturday and the College Football championship on Monday.

But whereas ESPN remains Disney’s most profitable company, the self-appointed Worldwide Leader in Sports faces new challenges that have begun to alter the way it does business.

Two factors are in play that have contributed to a surprising level of recent cost-cutting at ESPN:

### Huge escalation in rights fees. ESPN pays $1.9 billion annually for NFL games --- much higher than any other NFL package --- and a big jump over the $1.1 billion in its previous deal.

Other ESPN annual rights fees also have skyrocketed: The network pays $1.4 billion annually for the NBA, up from $575 million previously, and $700 million for MLB rights, up from $296 million. The College Football Playoff costs $608 million annually, well above the $124 million under the old BCS system.

### ESPN has lost nearly seven million households in the past two years, and 8.5 million over the past five, largely the result of more Americans canceling their cable or satellite service.

ESPN simultaneously has suffered the steepest loss in viewers among top cable networks, according to Bloomberg, with overall ratings and live editions of SportsCenter both down 10 percent. Though ESPN was cable’s most watched network in prime time last year, it ranked only seventh in overall viewership.

The soaring rights fees led to October’s layoff of 300 employees (four percent of ESPN’s staff), the shedding of a few high-end salaries (Bill Simmons, Keith Olbermann), the elimination of Grantland, the popular sports/pop culture website that Simmons headed up before his departure, and the decision to relinquish rights to NASCAR, U.S. and British Open golf and upcoming World Cups.

So in light of all the financial consequences, is the NFL worth it to ESPN?

Probably so, not only because of the marquee and promotional value and the ad revenue, but also because it has allowed the network to jack the price it charges cable companies and satellite providers. ESPN reportedly charges $6.64 per subscriber, by far the most of any basic cable network.

The NFL deal also includes the draft, the Pro Bowl, NFL highlight rights that benefit 30 different ESPN programs, Spanish-language rights for ESPN Deportes and several other perks.

But here’s the issue that should irk ESPN more than it lets on publicly:  NBC is paying half of what ESPN pays for the NFL ($950 million), yet continues to get a vastly more attractive schedule, plus a flexible schedule element that ESPN is not afforded.

NBC gets two playoff games, ESPN only one. With the NFL deciding to schedule both AFC wild-card games on Saturday and both NFC games on Sunday this year, NBC was given the more attractive game this weekend (Minnesota-Seattle at 1 p.m. Sunday), with ESPN carrying Kansas City-Houston at 4:30 p.m. Saturday.

The NFL is fully aware that 1 p.m. Sunday games traditionally draw more viewers than 4:30 p.m. Saturday games, so NBC’s game assignment wasn’t a coincidence.

Meanwhile, with ESPN losing so many viewers in the past two years, the network and league have decided to simulcast Saturday’s playoff game on ABC.

Sports Business Journal’s John Ourand noted some believe “ESPN had the leverage to cut a better [NFL] deal and question whether another media company was within $500 million of ESPN’s offer.” 

What’s more, Ourand quoted a former employee as saying “it’s been a total mismanagement of rights fees, starting with the NFL renewal. We overpaid significantly when it did not need to be that way, and it set the template to overpay for MLB and the NBA.”

But the launch of NBC Sports Network in 2012 and Fox Sports 1 in 2013 undoubtedly led to higher rights fees and ESPN consequently needing to overpay.

Meanwhile, ESPN should be outraged by the College Football Playoff refusing its request to move the two national semifinal games from New Year’s Eve to Saturday, Jan. 2. The two semifinal games drew 15.6 and 18.2 million viewers, compared with more than 28 million for each of last year’s semifinals on Jan. 1.

Seven of the next 10 semifinals will be on New Year’s Eve, and the College Football Playoff said it has no plans to change that, despite the ratings plunge. Next season’s New Year’s Eve semifinals will be on a Saturday, which ESPN believes should help matters.

ESPN’S CFP PLANS

For Monday’s Clemson-Alabama championship, ESPN again will carry the game on 14 (14!) platforms.

There’s the traditional broadcast on ESPN (with Chris Fowler and Kirk Herbstreit), the Film Room presentation on ESPN2 (with UF coach Jim McElwain, South Carolina's Will Muschamp and others) and an ESPN Classic cablecast without announcers but featuring stadium sound from 100 microphones.

There’s also the often-mockable ESPNEWS broadcast of celebs and ESPN personalities watching the game; Michelle Beadle, Jay Bilas, Teddy Atlas and Marcellus Wiley be among those featured this year.

And something new: A “Homers” telecast on ESPNU, featuring Joe Tessitore accompanied by two commentators essentially cheerleading for their teams: former Clemson quarterback Taj Boyd and ex-Alabama center Barrett Jones.

### ESPN assigned former Marlins announcer Dave O'Brien and Dick Vitale to Saturday's UM-FSU basketball game at 5 p.m. on ESPN2, from BankUnited Center.

### Twitter: @flasportzbuzz

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