BASEBALL NETWORK FAILS TO WOW ADVERTISERS

The Baseball Network was supposed to be an innovative sales and marketing venture that would restore Major League Baseball's value to network TV advertisers. But as it wraps up its rookie year, this ABC-NBC-MLB joint venture looks like it's playing in the minors. With a pitch long on hubris and nostalgia, but short on material facts and substantive figures as to how baseball can deliver more value for advertisers, the venture has demonstrated an amateurish understanding of what marketers really want from a sports marketing and media buy. The Baseball Network's primary pitch, a slick, emotion-charged presentation tape, offers the sport as an icon as American as apple pie. Advertisers and media buyers say they have been moved by the presentation and hope the Baseball Network produces its prime-time coverage with as much vigor. But what they really want are rating points and promotions to drive traffic or move the sales needle. Baseball Network President-CEO Ken Schanzer, on the other hand, claimed he has "written significant business and every single piece of business is at our rate card." But he can't announce those deals until the clients return from the Winter Olympics. So far, the Baseball Network has signed up two sponsors-Texaco and Russell Athletic. Although the baseball season opens in April, Baseball Network broadcasts don't begin until July. The main problem with the venture's pitch, say media buyers, is it purports to be an integrated media and marketing package but has little promotional value. That's a big problem for baseball. The Baseball Network has been offering the integrated packages at $5 million to $6 million each, but key media buyers value them at just $2 million to $3 million. One top agency media buyer values the package at about $3.5 million, a figure that would gross the Baseball Network $210 million annually for the 60 units per game available. "They keep saying they are offering an all-inclusive package, but that we don't know how to put a value on what they are offering promotionally," said Mary Ann Cycyota, VP-media director and head of sports buying at Leo Burnett USA, Chicago. "But it isn't that people don't know how to value what they are offering ... as much as it is that there is nothing to put a value on." She estimates the package to be worth around $2.5 million, dropping TBN's gross to only about $150 million a year. That is just half of TBN's $300 million sales goal and far short of the minimum amount needed to ensure its future. Team owners can cancel the six-year venture after two years if it hasn't grossed about $330 million by then. The package offers no stadium or simulated on-air signage, no licensing rights, no ties with players or teams. It includes the use of the Major League Baseball logo and a media schedule of one 30-second spot in each of TBN's network prime-time telecasts beginning with the July 12 All-Star game, followed by 12 regular season games of the week, five of the new regional play-off games, and seven games each in the League Championship Series and the World Series. If TBN doesn't hit its mark, team owners presumably would view the marketplace for a traditional TV rights deal with more favor. When the unusual joint venture was conceived, CBS had just finished bleeding red ink on its $1.06 billion, four-year baseball deal and ABC and NBC were reluctant to assume such risks. By 1996, the playing field will be different. By then CBS will have experienced two entire seasons without a professional sport and Fox will have finished two seasons of National Football League football and could be looking to expand its pro sports coverage. Also, Paramount Television and Warner Bros. will have rolled out their prime-time networks. Under the terms of the deal, the baseball venture assumes all costs associated with producing and marketing the telecasts. Baseball initially takes an 88% cut of the revenues, with ABC and NBC each getting 6%. The league's share gradually decreases to 80% while ABC's and NBC's cuts jump to 10% in the final year. "Our market is coming together," insists Mr. Schanzer. "We have already sold significant amounts of inventory and we are right on target." Meanwhile, the clock is running. If TBN doesn't wrap up most of its deals in the next two months, it will lose leverage. By then, the rest of the TV marketplace will be into the network development season and headed into the upfront buying season. "Once that happens, nobody will be talking about baseball until the upfront wraps up in July," said a major agency media buyer. Baseball will also soon be competing with Fox's untested NFL package. "We're anticipating a long, hot summer," said Burnett's Ms. Cycyota.

BASEBALL NETWORK FAILS TO WOW ADVERTISERS

Featured Stories