After a three-year layoff during which the traditional trappings of Upfront Week were scrapped in favor of a series of remote and somewhat airless sales pitches, the TV networks and their agency and advertising partners next month will reconvene in the flesh for a little free booze and a whole lot of talk about whatever the hell KPIs are. But before everyone dives back into the whirl of New York’s mid-May media ritual, ESPN would like to have just an hour of your time to help bring you up to speed on what’s shaking in Bristol.
To that end, ESPN this afternoon is convening its third annual Sports Summit, a program designed to give marketers an inside-baseball look at everything from the network’s latest rights acquisitions to its ongoing cultivation of the direct-to-consumer space. The virtual event will provide a status update on ESPN’s core TV offerings while providing an overview of the company’s efforts to engage with a new generation of fans via social-media platforms that didn’t exist when Joe Burrow was in high school.
Among the highlights of today’s show is a commissioners’ roundtable featuring league bosses Gary Bettman (NHL), Rob Manfred (MLB), Adam Silver (NBA) and Kevin Warren (Big Ten Conference). As moderated by Hannah Storm, each commish will contribute to the session from the comfort of his own office. Come for the firepower, stay to commit to memory any prediction Silver happens to make during the course of the chat. Ten months after the NBA capo told a similarly-constructed panel that legalized gambling was all but inevitable, the U.S. Supreme Court struck down the federal law that prohibited sports betting. (If at any point in today’s sit-down Silver gives rodeo a vote of confidence, drop what you’re doing and go buy a bull.)
Also on the agenda is a conversation between WNBA commissioner Cathy Engelbert, Disney sports sales exec Deidra Maddock and ESPN hoops analyst Chiney Ogwumike on the power of women’s sports, and a football panel featuring in-house talents Laura Rutledge, Dan Orlovsky and Marcus Spears. Other discussions will touch on the intersection of social media and big-time sports—and no, Patrick Mahomes’ irksome brother will not be weighing in on that topic—and the power of storytelling.
Kicking off this afternoon’s event is ESPN chairman Jimmy Pitaro, who will be talking about the parallel circuitry that powers the flagship cable channel and ESPN+, which at last count had locked in 23.1 million subscribers. While ESPN’s linear TV business continues to be the envy of the cable bundle, throwing off as it does some $9.1 billion in annual distribution revenue, the direct-to-consumer model represents the future of sports media. So central is ESPN+ to Pitaro’s vision that the service has stealthily informed the company’s recent $40 billion rights spree, inasmuch as all of its media deals are being written to accommodate the inevitable shift to DTC.
“We are constantly focusing on expanding our audience, and one of our core priorities includes reaching younger fans wherever they are,” Pitaro told Sportico in a recent phone interview. “We are moving content over as the customer shifts to direct-to-consumer platforms … and as part of that ongoing migration, we’re structuring our deals in a way that allows us to be more flexible in terms of where our games are available.”
At the same time, Pitaro is vigilant about honoring the commitments ESPN has with the legacy distributors that still account for the vast majority of the network’s overall impressions. “The traditional television business has been very good, incredibly good, for us, and we’re going to continue to invest in that traditional ecosystem,” Pitaro said. “As you know, live sports accounted for 94 of the top 100 broadcasts last year, and they generate a ton of cash flow for us. And that cash flow is what allows us to make the investments in rights acquisitions and tech and talent … and everything else that makes us who we are.”
For all the Chicken Little-ing about the imminent demise of the cable bundle, the legacy model seems to be holding up its end of the bargain. ESPN just put up its best first quarter of audience deliveries in five years, as total-day ratings jumped 32% versus the year-ago period while primetime viewership improved by 40%. That the network was able to grow its ratings during a period in which overall TV usage was down by more than 10% is testament not only to its live sports schedule—Q1 coincides with the NFL postseason and the College Football Playoff series—but also to ESPN’s roster of studio shows, each of which delivered double-digit gains in the period.
In his leadoff conversation with SportsCenter host Sage Steele, Pitaro will talk up ESPN’s big TV numbers while highlighting the impact from such recent acquisitions as the NHL and growing franchises like the NCAA Division I Women’s Basketball Tournament. (Sunday night’s UConn-South Carolina final averaged an 18-year high 4.85 million viewers across the ESPN-branded channels.) He’s also likely to make mention of the fact that Disney’s portfolio serves up one-third of all sports impressions in the key adults 18-49 demo, which is the kind of thing advertisers like to hear on the eve of the summer upfront bazaar.
Bookending today’s presentation is Disney ad sales president Rita Ferro, who controls 50% of the nation’s college football inventory and is gearing up to sell an all-new Monday Night Football package headlined by former Fox stalwarts Joe Buck and Troy Aikman. In a Zoom interview, Ferro said she’ll be keeping her powder dry for Disney’s May 17 upfront show at Basketball City in Chelsea, a venue that unseated the longtime base of operations that was Lincoln Center. (In a recent note to clients, Ferro promised to deliver “an incomparable experience … unlike anything you’ve ever seen from Disney.”)
While Ferro won’t be doing a hard sell this afternoon, she’ll wrap the proceedings with a look ahead at the NBA postseason, the NHL Stanley Cup playoffs and the juggernaut that is ESPN/ABC’s fall sports schedule. In addition to the powered-up MNF booth, advertisers may look forward to indulging in a more customized ManningCast experience.
“Peyton and Eli were a last-minute addition in 2021, but now we’re looking at various ways to sell the show that will be incremental in terms of the overall experience, and that is shaping how we’re thinking about bringing it to market,” Ferro said. “While traditional football advertisers are all about the game, the format and content of the simulcast presents a number of unique opportunities for our sponsors.” We are, perhaps, not alone in thinking that a product integration that leverages the wryly goofy Manning Bros. vibe would send products flying off the shelves, so long as Eli keeps the double-birds under wraps.
Along with the mother lode of endemic business that pays the freight for football, basketball, baseball and hockey, a good deal of new money is surging into the sports market. And while Disney took a more cautious approach to last fall’s sportsbook jamboree, Ferro believes this will be the first upfront in which gambling dollars begin to displace some of the more traditional category spend. Cryptocurrency exchanges are also expected to be active in the upfront, which by its very nature is the proving ground of blue-chip automakers, insurance companies, wireless providers and fast-food brands.
In light of the enhanced demand around the scatter market, Ferro says upfront demand will likely outpace last season’s historically robust bazaar. While multiyear deals ensure that the most valued clients won’t get caught short in the upfront, the prospect of having to pay a 35% premium for last-minute NFL investments all but guarantees a run on advance inventory.
“The market is tight, so there isn’t necessarily a lot of room for new clients to push a whole bunch of their marketing dollars into sports,” Ferro said. “The beauty of sports is that you need to see them in the moment, and the impact that has on engagement is hard to overstate. So in the upfront, very often we’re going to see more money wanting to come in than we can accommodate.”
As ESPN looks to begin ramping up its share of sports-betting ad spend, the rapid expansion of the newly legitimized sector is expected to continue to boost local TV ratings within the markets that have taken the plunge. When New York legalized mobile wagering in January, agency execs almost immediately registered that a concomitant jump in sports-TV deliveries had begun taking place within key Empire State markets like New York City, Buffalo and Syracuse.
After today’s virtual presentation, Ferro will go back to fine-tuning the script for what will be Disney’s first meat-space upfront show since the Before Times of 2019. Pitaro, for his part, is already thinking about the next rights acquisition, although he’s happy to take a crack at delivering a little sales banter. “The big point we want to make here is to reiterate the massive audience we can offer advertisers, while highlighting everything that’s special about our various platforms,” Pitaro said. “If you’re a marketer looking for broad reach across various demos, we’re a one-stop shop.”
(This story has corrected the spelling of Big Ten commissioner Kevin Warren’s name in the third paragraph.)