- The Washington Times - Sunday, March 7, 2004

Being right is often a lonely situation.

Such has been the case for Dick Ebersol, chairman of NBC Sports. After turning the peacock network into a pre-eminent sports destination — punctuated by broadcasting the Super Bowl, World Series, NBA Finals and Summer Olympics in a nine-month span in 1995-96 — Ebersol shocked the TV industry by letting the NFL’s AFC package go to CBS and then passing on a new NBA contract after a wildly successful 13-year run.

Ebersol cited the highly inflated cost of rights fees as his rationale in both situations, a somewhat curious position for an executive who later committed $2.2billion to extend NBC’s choke hold on the summer and winter Olympics through 2012

Numerous pundits believed Ebersol’s lofty stature would quickly erode, as would NBC overall. But two years after saying goodbye to the NBA, not only is Ebersol and NBC in fine shape, his mantra of refusing to use big-time sports as a financial loss leader is quickly gaining disciples across the rest of the industry.

ABC and ESPN are putting a squeeze on the NHL, according to industry insiders, refusing to improve on a $120million a year national TV deal that already is a mere fraction of the other major team sports. Fox, which wrote down nearly $1billion in sports-related losses two years ago, is openly chafing against another large fee increase when its NFL deal expires after the 2005 season. CBS and Fox joined Ebersol in saying no to the NBA, and ABC will air 18 regular-season games this season, making pro basketball essentially a cable TV sport.

Ebersol likely will not be regarded as important to TV sports as his esteemed mentor, the late Roone Arledge, who completely transformed the business with prime-time scheduling, technical prowess and top-flight storytelling to the industry. But Ebersol, whose own resume is nothing to ignore, clearly has helped usher in some long-needed fiscal prudence.

“The days of big money from [over-the-air] networks are over. The model is absolutely changing,” Ebersol said. “The guaranteed money just can’t keep coming. The era of the drunken sailor is about over. But this is still a terrific place to be for a business that makes sense.”

Historians will be quick to note that such talk has been shouted from the rooftops since the early 1980s. Network executives told anyone who would listen that rights fees would not and could not keep rising, only to turn right around and write ever bigger checks. Such a situation peaked in 1998, when four networks committed $17.8billion to the NFL.

But since the go-go 1990s, deep fiscal losses like Fox’s rapidly have become the norm in network TV sports, and anxious shareholders and executives no longer are tolerating such results. Patience is even further crippled as the power of big-time sports as a promotional tool for other network programming comes under increased scrutiny and doubt.

“We are a General Electric company, and GE has a trust with its shareholders that we’re not going to do something stupid,” Ebersol said.

Plenty of people would quickly categorize the disastrous XFL as “something stupid.” But Ebersol continues to sing the praises of Vince McMahon, pro wrestling impresario and XFL founder, as one of his favorite business partners. And Fox Sports president Ed Goren is quick to echo Ebersol’s economic sentiments.

“We’re not crying wolf,” Goren said. “We are the poster child for TV sports write downs. I don’t see how [rights fees] can go much higher. There’s nothing wrong with the product of sports TV itself. The ratings are still generally very good. But the economics just stink.”

The economics, however, do not stink for the 2004 Summer Olympics in Athens, the latest installment of Ebersol’s first love. Ebersol will captain a massive operation that will air 1,300 hours of coverage from Athens over seven channels, both Olympic records. More than 80 percent of advertising time already is sold, and the reduced time difference between the U.S. and Greece compared to the 2000 Olympics in Sydney all but guarantees a solid uptick in ratings.

Meanwhile, Ebersol is longing for a chance to bring the NFL back to NBC — but only at a reasonable price.

“We’re always interested in the NFL,” he said. “It’s obviously the No.1 vehicle out there in terms of team sports. But it has to be a business where we’re allowed to survive. Let’s put it this way: I’ll be very happy if I ever get a phone call from the NFL saying that they’d love a break-even deal. Do I expect to get the telephone call? I’ll be sleeping.”

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