Like most American kids that grew up in the 80's I watched the Indy 500 every year and became interested in motorsports thanks to that race, but I didn't really get hooked until I started watching Formula 1 racing in the late 90's. My favorite era were those years with the great Mika Hakkinen/Michael Schumacher battles. (I was a Mika Hakkinen fan) So my fondness for Formula 1 waned once Mika retired and Schumacher started winning everything, even at the expense of his teammate Rubens Barrichello. My interest in F1 has only been lukewarm since.

Then I turned to Champ Car racing here in the US for my motorsports fix. However that was quickly extinguished once Champ Car and Indy Car merged and we were stuck with Tony George and his many foibles. (It was entertaining to watch the Hulman/George drama I'll admit.) My interest has been less than lukewarm with Indy Car lately, even without Tony George at the helm.

Over time however, the excitement I once had for motorsports has slowly gone. Maybe it has to do with my age, I don't know. But I think I will pour my efforts into my Trooper and my interests in the outdoors to add excitement to my life.

Thanks for checking out my blog, I hope you enjoy it. I will still post racing news when I find something interesting or noteworthy.

Sunday, May 1, 2011

CEO Bull has the "Vision"

(by Obi wan 5-1-11)

I believe they have eight more years (until 2018) on the Vs contract.

No doubt he is talking about the I497.5 contract with ABC, which is up in 2012. The Gomers are hoping against hope for a bidding war between major networks but it is unlikely to materialize (IMO).

Here’s why: Circa 2008 ABC/ESPN was paying the Pagoda $10 million for the broadcast rights to the I497.5 and the rest of the ICS schedule of 18 races. However, almost all the races but Indy were losing money hand over fist with ratings less than a third of an average NASCAR Cup race (if they were lucky; Motegi, for instance, repeatedly scored the rare double-goose egg (0.0). From what I heard the Idiot Grandson was having to increasingly sweeten the pot for ABC/ESPN by picking up production costs and guaranteeing a certain amount of advertising (which the Pagoda could then try to sell themselves). Finally, even that didn’t make the broadcasts profitable and ESPN decided to take a pass on the races (13) that they were showing on ESPN2; they offered a little less than $4 million for the broadcast rights to Indy and five races of their choice. That left the IG holding the bag on 13 races with no network remotely interested in paying him to broadcast them.

When Vs, for reasons known only to them, actually offered money (about $60 million over 10 years; but probably with performance clauses) for ESPN’s unwanted races; and the IG must have thought that he died and went to heaven. Between the two broadcasters, the Pagoda was able to almost financially stay in the same place with almost $10 million in combined deals. They couldn’t brag about going up but at least they didn’t have to lie (too much) about going down.

However, as was suspected at the time, it was a deal made with the Devil: the Family got the same amount of money they were accustomed to but in return their boutique motor sport disappeared off the face of the Earth (pretty much). There is no way that NBC/Vs are going to increase their investment in the IICS without a demonstrable increase in its ratings and just the reverse is happening. With PVH/IZOD and Vs pouring more marketing and promotion behind the league than at almost any other period in its history, it seems to be actually driving the customers away. More and more people are getting a first look at the IICS and they don’t like what they see.

The Gomers, being Gomers, have convinced themselves that the fact that NBC/Vs just paid $2 billion for the rights to broadcast the NHL means they are about to get the same kind of deal (completely ignoring the fact that their contract still has 8 years to run). Even if it didn’t, the NHL is doing what was expected of the IICS -- steadily increasing its ratings – whereas Indycar’s get worse with almost every race.

Even if the IICS didn’t have abysmal ratings the NHL deal would likely have worked against it. For example, Rupert Murdoch’s News Corporation owns the SPEED Channel; they bought it when it was the Speedvision Channel and showed a diverse schedule of motor sports from Le Mans to the Reno air races as well as special interest shows of interest to a wide variety of auto/motorcycle enthusiasts. Then Murdoch/NC/FOX paid an ungodly sum of money for the rights to broadcast about a third of NASCAR’s Cup races and it was decided that every division in the company had to do what it could to make the investment profitable. Overnight, Speedvision became the SPEED Channel; which is the de facto NASCAR Channel 24/7/365. Almost all other motor sports were pushed out by the need to capitalize the networks’ huge investment. I see no reason why NBC/Vs sizeable investment in hockey won’t have the same negative effect on other sports on Vs (especially those that aren’t pulling their weight).

Additionally, the Hulman-Georges have finally been hoisted on their own petard. For decades they kept the Indy broadcast contract to themselves and thereby weakened the value of the broadcast rights to the rest of the sport/series. No major network is going to invest big in a motor sport whose premier and defining race is the property of a rival broadcaster. The primary reason that CART ended up on ABC/ESPN is because no other major broadcaster was going to put money into promoting the series when ABC would end up reaping the rewards with the 500. At the same time, ABC/ESPN knew they were in the cat bird seat with their separate I497.5 contract, so they never paid CART what it was worth (if its broadcast package had been monolithic like NASCAR’s).

Now the broadcasters that the Rodeo Clown are hoping will go into a feeding frenzy over the Indy contract (plus five regular IICS races) are facing the identical situation with the “unified” IICS: meaning a divided broadcast package.

To make matters more dismal for the league, the last I497.5 had the worst ratings and attendance since the race was first broadcast live in the early eighties; so unless there is a dramatic improvement, ABC is unlikely to be bullish about the next Indy contract and NBC is unlikely to enter into a bidding war to buy ABC’s trouble. As for any other major network … forgetaboutit; TWO other networks own pieces of the IICS – why risk big bucks for a part of the whole.

As if that wasn’t enough to make major network CEO’s head for the hills; try the fact that bedrock IICS sponsor Firestone is for sure gone (along with its advertising) in 2013 and word on the street is that the 0.2 IICS ratings on Vs have PVH/Vs looking for a way out at the end of the year (or sooner).

All in all, the Rodeo Clown would probably have better luck with the visions he could get from peyote or shrooms than the second-hand ones from the Idiot Grandson and his Mommy.


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