Logo for the 2009 NCAA ‘Final Four’ basketball championship, played in Detroit, Michigan.
A front-page story in the Washington Post that ran a few days before the April 2009 “final four” championship NCAA basketball games, focused on the big money that would be flowing into Detroit’s local economy because of the tournament. And indeed, organizers of the event estimated that between $30 million and $40 million would come to the host city. More than 100,000 people were expected to come to Detroit for the event, described by the Post as “the most lavish celebration in college sports.” On April 4, 2009, the first two games were played at Detroit’s Ford Field stadium, and for the first time in tournament history, an NCAA attendance record was set, with some 72,000 fans attending.
The Post story — headlined: “Desperate For a Rebound, Detroit Turns to Basketball” — contrasted the good times for the NCAA with the hard times in Detroit and Michigan, epitomized by the current declining economic fortunes of Detroit’s automakers. NCAA basketball is just one part of what appears to be a rapidly growing “entertainment economy.” But perhaps there is also a broader message to spotlight here: the rise of the “media and entertainment” sectors of America’s economy in recent years versus the declining manufacturing sector.
Manufacturing, obviously, is vital for sustaining any national economy, and Americans would like to see nothing better than a solid manufacturing come-back in the Midwest and elsewhere in the months ahead. Still, in recent decades, the sports, media, and entertainment portions of the American economy have been exploding in value and growth. NCAA basketball is just one part of that — part of what some have called in recent years, “the entertainment economy.” Whether this “new economy” is as desirable as the old industrial variety is another question, certainly, but it is occurring nonetheless.
Sports in general have become a rising and significant part of the U.S. media/entertainment sector. In 1960, for example, there were 42 professional sports franchises, mostly in the northeastern U.S. By 2000,there were more than 110 franchises, and they were spread over more regions of the country. The media, meanwhile, have loomed powerfully over this growth. Since 1980s the annual number of hours of sports programming aired by major broadcast networks and cable systems has more than doubled, rising to 10,000 hours in 2000. The increasing economic value of sports broadcast and cable rights have attracted media and entertainment companies as sports franchise investors, as well as wealthy individuals. And “big event” playoff games and the like, draw lots of attention from would-be host cities.
Ford Field in Detroit played host to more than 72,000 fans for the Final Four NCAA basketball games of early April 2009.
“The Super Bowl, Olympic Games, all star games, and league play-offs for the four major professional sports leagues, and the [NCAA basketball] tournament, qualify as sports mega-events in the United States,” observe analysts Robert A Baade and Victor A Matheson. “Convinced that these sports events produce substantial incremental economic activity, cities compete as vigorously to host them as do the athletes who participate in the events…”
In April 2009, CNN.com reported a story headlined: “Hawaii Looks to Sports for Economic Boost,” explaining how the NFL Pro Bowl game — featuring all-star professional football players in an end-of-season contest — has been an important contributor to the state’s economy for more than 20 years. The game had been played in Honolulu at Aloha Stadium every year since 1980, and it sold out every time. Honolulu Mayor Mufi Hannemann explained that the tens of thousands of people who came to that game every year spent “at least $30 million” across the state. Honolulu lost the game to Florida recently, but Mayor Hannemann is optimistic about getting it back in 2011 and 2012. Hannemann also co-chairs the U.S. Conference of Mayors’ Olympic Task Force, which is hoping to bring the Olympics to Chicago in 2016. Hawaii could benefit from that as well, becoming a stopping off point for visiting fans and participating teams on their way to Chicago. Sports, it seems, is an important part of Hawaii’s economic planning.
1979 NCAA championship players Magic Johnson of Michigan State, left, and Larry Bird of Indiana, right.
NCAA basketball, a part of the larger sports universe, has become its own big business. But this has happened in a relatively short space of time, with broadcast and cable television serving as a powerful handmaidens. NBC telecast the championship NCAA game over its network for the first time in 1969, continuing to do so through the 1970s. There was no cable television then.
By 1979, however, there came Bill Rasmussen, founder of ESPN, an “all sports” cable TV network. Rasmussen had rounded up broadcasting rights for tape-delayed NCAA basketball games as part of what he was then building. There was little TV coverage then of the games leading up to the NCAA finals. It also happened about that time that fan interest in college basketball was ignited by two young rival players named Magic Johnson and Larry Bird who battled each other in the NCAA finals.
CBS' ad revenues.
In March 1979 when Bird and Johnson played in the championship game, more than 35 percent of the TV sets turned on were tuned to that game. That type of TV audience share is not possible in today’s market, but it did show the way to the gold mine in NCAA basketball broadcasting. ESPN, meanwhile, was soon broadcasting 14 of 32 first-round games, and often showed the most competitive games, gaining national appeal. The NCAA tournament was boosted considerably by ESPN’s tournament coverage.
In 1979, the NCAA tournament had a 40-team field. It was expanded twice over the next six years, to 48 teams in 1980 and 64 teams in 1985. The TV rights fees were $5.2 million in 1979. They doubled in 1980. By 1982, when CBS outbid NBC for the tournament, the price went to $48 million. In 1985, they doubled again to $96 million. By 1994 CBS paid $1.73 billion for NCAA games through the year 2002. The current package through the year 2011 cost CBS $6.2 billion. But CBS appears to be getting some of that back in ad revenues, both from conventional broadcast and the internet (see graphic).
The televised play of the Final Four NCAA basketball tournament, of course, is only part of the NCAA tournament’s overall economic effect. And basketball is only one of many NCAA sports with championship events, with various college conferences and leagues participating as well. Advertisers from Nike to Chevrolet have been attaching themselves to NCAA sports, and in some cases, individual players, for some time now. On March 10, 2009, for example, Nike announced it would outfit the players of five NCAA teams for tournament play — Duke, Gonzaga, Memphis, Michigan State, and the University of Oregon. Nike would equip the players head-to-toe with a ‘360’ treatment, providing “base-layer apparel, unique uniforms, and customized footwear”. Pontiac, Coca-Cola, AT&T meanwhile, were among prominent Final Four advertisers.
One of a myriad of NCAA video games available for a number of college sports.
The NCAA itself is a major business, sharing its revenue with the leagues and schools in some sports. One only need visit the NCAA.com website to get an idea of the business side of college sports these days and how college sports have become a powerful force in the national economy. As USA Today has recently reported, individual univer- sities are also striking their own sports deals. The University of Maryland now plays football at the Chevy Chase Bank Field at Byrd Stadium as part of its 25-year, $20 million naming-rights deal with the bank. The money also helped finance new luxury suites and other upgrades at the Maryland football stadium. The University of Kansas basketball team recently dropped former sponsor Nike and went with Adidas in a new apparel contract. An eight-year, $26.67 million deal with the athletic company, among other things, places the Adidas three-stripe logo on UK’s basketball jerseys. The University of Texas is exploring its own TV network to fill a statewide cable channel and various internet outlets to broadcast University of Texas football, basketball, and other sports. In fact, since early 2007, at least 37 schools have guaranteed themselves a combined $1.7 billion in fees by bundling and selling multimedia rights.
The Bigger Picture
College sports, of course, are only a sliver of the great American sports pie, and the U.S., only one part of the larger global sports scene. But adding up only the “sports parts” of the media/ entertainment/advertiser juggernaut that is now found globally — Media & entertainment now contribute well north of $500 billion annually to the global economy, and some analysts expect that an even more powerful sports/entertainment component will emerge in the decades ahead. whether World Cup Soccer, Indian cricket, Olympic events, tournament golf and tennis, NASCAR racing and more — plus the prospect of NFL, NBA and Major League Baseball expansion abroad in the future, and one can get an idea of the shift that is occurring in national and global economies. And sports, of course, are only one part of the bigger media/ entertainment engine. There is Hollywood and Bolly- wood, the music industry, television and radio, Broadway and the West End, the internet, video games, hand-held entertainment, related software/hardware, and much more. These are all economic powers within the media/entertainment equation. They now contri- bute well north of $500 billion annually to the global economy, and some analysts expect that an even more powerful sports/media/entertainment component will emerge in the decades ahead, current economic difficulties notwithstanding. NCAA basketball, and its elevation in recent decades to mega-sport event status, illustrates how modern societies are incorporating media, sports, and entertainment elements as increasingly important economic contributors.
Harold L. Vogel, Entertainment Industry Economics: A Guide for Financial Analysis, Boston: Cambridge University Press, 2004.
Michael Wilbon, “30 Years Ago, Madness Tipped Off,” Washington Post, Thursday, March 26, 2009, p. E-1.
Robert A Baade and Victor A Matheson, “An Economic Slam Dunk or March Madness? Assessing the Economic Impact of the NCAA Basetball Tournament,” in John Fizel and Rodney D. Fort, Eds, Economics of College Sports, Westport, CT: Praeger Publishers, 2004, pp. 111-134.
John Fizel and Rodney D. Fort, Eds, Economics of College Sports, Westport, CT: Praeger Publishers, 2004.
Business Wire, “Nike Outfits NCAA Basketball Teams for Battle with Innovative Uniform System,” March 10, 2009.
In 1921, they called it “the largest audience in history,” the 300,000 or so people estimated to have heard one of the first radio broadcasts of a special event — the outdoor heavyweight championship boxing match between American Jack Dempsey and French challenger, Georges Carpentier. Dempsey was reigning world champ at the time, and Carpentier was a European boxing champion and decorated French Army veteran. The fight’s promoter had billed the event as the “Battle of the Century.”
July 2, 1921. Jack Dempsey and Georges Carpentier get ready to square off in championship fight before 80,000 fans. The fight ushered in a 'golden age' of sport in the 1920s, and with radio, the beginnings of sport as mass-audience, big-business entertainment.
A hastily assembled outdoor arena was built on a farm in Jersey City, New Jersey, not far from New York City. More than 80,000 fans came to see the fight in person on July 2, 1921, producing boxing’s first million-dollar gate. Dempsey won in four-round knockout in a scheduled 12-round fight. But the big news for many was the radio broadcast of the fight. It was the first ever broadcast to a “mass audience,” with the blow-by-blow call of the fight from ringside relayed over the new “radiophone,” reaching hundreds of thousands in the northeast U.S. Wireless Age magazine, reporting on the event a few weeks later, described the fight’s call over radio by “a voice that sounded loud and clear throughout the Middle Atlantic states.” It was “history in the making,” said the magazine.
“Hero” vs. “Slacker”
There was also a good deal of hype associated with this fight, as there would be for any major event of this kind. The promoter of the fight, Tex Rickard, cast its principal contestants as “hero” vs. “villain.” The “hero” in this case was not the American Jack Dempsey, but the Frenchman, Carpentier, the light-heavyweight champ who had distinguished himself as a pilot in World War I. Dempsey, on the other hand, was cast as the “villain” as he had been labeled a “slacker” for avoiding the military draft — even though he had been found not guilty of the offense in 1920. Promoter Rickard offered Carpentier $200,000 for the fight and $300,000 to Dempsey — considerable sums for the time — as well an equal share of 25 percent of the film profits. Rickard saw the radio broadcast of the fight as a positive for his future business, and he did what he could to accommodate the new technology at the site. He believed that radio might be a way to advance prizefighting in the post-World War I popular culture. Rickard allowed for a makeshift wooden room for the radio broadcast to be constructed under the stands. Telephone lines and a temporary radio transmitter, sponsored by the Radio Corporation of America (RCA), were installed at the Delaware, Lackawanna and Western Railway terminal in Hoboken, New Jersey.
David Sarnoff, of the early RCA Company, was among those who saw that the Dempsey-Carpentier fight would help advance radio. (1922 photo).
Radio beyond the reach of a few people had barely begun in the early 1920s. Fledgling operations had started in 1916 in both New York city and Pittsburgh, Pennsylvania. In Pittsburgh, a Westinghouse employee named Frank Conrad began sending out recorded music played from a phonograph over a radio transmitter set up in his garage. By 1920, Conrad’s employer, Westinghouse, noticed that the broadcasts had increased the sales of radio equipment, which Westinghouse was then manufacturing. The company had Conrad move his transmitter to the Westinghouse factory roof. Westinghouse then applied for a government license and started the pioneer station KDKA, which in early November 1920, began radio programming with the Harding-Cox Presidential election returns. Those broadcasts, however, were only reaching a few thousand hobbyists.
In New York City, too, local radio broadcasts had begun in the fall of 1916 over Lee DeForest’s experimental “Highbridge” station. David Sarnoff, a manger at the American Marconi telegraph company, who lived in New York had heard the early Highbridge broadcasts. Sarnoff wrote a brief memo to the Marconi’s president in 1916-17 about a business possibility for developing a “radio music box” to sell to amateur radio enthusiasts. But nothing came of Sarnoff’s idea at the time. Marconi was then in the heat of WWI. A few years later, however, in January 1920, the Radio Corporation of America (RCA) was established when General Electric acquired American Marconi and Sarnoff, with it. RCA had formed in 1919 after the U.S. Government relinquished control of the wireless industry following World War I.
Poster advertising the fight at the New York Theater in New York city. Such advertising ran for several days in advance of the bout. This theater would be one of many locations in New York and elsewhere that would fill with listeners on fight day.
“Radio Box For Entertainment”
David Sarnoff, meanwhile, wrote another, more detailed memo on the prospects for radio business and sales to the general public — a 28-page memo titled Sales of Radio Music Box for Entertainment Purposes. “I have in mind a plan of development which would make radio a ‘household utility’ in the same sense as the piano or phonograph,” Sarnoff began. “The idea is to bring music into the house by wireless,” by which he meant radio. Sarnoff saw a large potential market, which he then put at about 7 percent of the total families,” yielding a gross return of about $75 million annually in 1920s dollars. Both estimates would soon prove to be very conservative. “Aside from the profit to be derived from this proposition,” he wrote, “the possibilities for advertising for the company [RCA] are tremendous…” The company’s name “would ultimately be brought into the household,” he said, and radio thereby would receive “national and universal attention.” Indeed it would, and did. But it was the broadcast of the Dempsey-Carpentier fight that would help spark the early public curiosity in the radio and also help the rise of RCA and the radio business. RCA, in fact, made its broadcast debut with the July 2, 1921 championship fight.
On the Boardwalk in Asbury Park, NJ, a ‘rolling chair’ offers passers-by a listen to the fight by wireless radio telephone.
Sarnoff also appears to have played an important role in the radio broadcast of the Dempsey-Carpentier fight, although some say the extent of his role has been exaggerated. Still, it does appear that Sarnoff helped make the broadcast possible: he provided money for expenses, a high-powered GE transmitter, and the use of the Lackawanna Railroad terminal antenna in Hoboken, New Jersey. There are also varying accounts as to who initially came up with the idea to do a wide-area radio broadcast of the fight, with some attributing the idea to Sarnoff, and some to others. Julius Hopp, manager of the Madison Square Garden concerts at the time, had observed amateur radio men in more limited venues and was impressed with their descriptions by voice. Some credit Hopp with the idea. In any case, in April 1921, it appears the idea of broadcasting the Dempsey-Carpentier fight was offered to promoter Tex Rickard and his partner, both of whom liked the idea. There had also been one previous fight broadcast on radio in the Pittsburgh area in April 1921, heard only by a limited number of listeners and radio hobbyists in that location. The broadcast that planners had in mind for the Dempsey-Carpentier fight, however, was for a much broader region.
Boxer Jack Dempsey, being introduced to new “radiophone” technology, appears on cover of “The Wireless Age” magazine, July 1921.
An early July edition of Wireless Age magazine described the plan for how the broadcast would work:
…The radio station at Hoboken will be connected by direct wire to the ringside at Jersey City, and as the fight progresses, each blow struck and each incident, round by round, will be described by voice, and the spoken words will go hurtling through the air to be instantaneously received in the theaters, halls and auditoriums scattered over cities within an area of more than 125,000 square miles.
Through the courtesy of Tex Rickard, promoter of the big fight, voice-broadcasting of the event is to be the means of materially aiding the work of the American Committee for Devastated France [i.e., following World War I] and also the Navy Club of the United States. These organizations will share equally in the contributions secured by large gatherings in theaters, halls and other places. The amateur radio operators of the country are to be the connecting link between the voice in the air and these audiences. … Any amateur who is skilled in reception is eligible, whether or not he is a member of any organization.
This photo provides a partial view of the huge crowd surrounding the outdoor boxing ring at the Dempsey-Carpentier fight in Jersey City, NJ, July 2, 1921.
On fight day, a notable cast of local and national dignitaries attended the actual event in person. Among politicians and celebrities who joined the 80,000-to-90,000 fans who came to watch the fight were: industrialists John D. Rockefeller, Jr. William H. Vanderbilt, George H. Gould, Joseph W. Harriman, Vincent Astor, and Henry Ford; entertainers Al Jolson and George M. Cohan; literary figures H.L. Mencken, Damon Runyon, Arthur Brisbane, and Ring Lardner; the three children of Theodore Roosevelt — Kermit Roosevelt, Theodore Roosevelt, Jr. and Alice Roosevelt Longworth; prominent Long Island residents, such as Ralph Pulitzer, Harry Payne Whitney and J.P. Grace; Jersey City Mayor Frank Hague; and New Jersey Governor Edward I. Edwards. At the gate, meanwhile, the fans who poured in payed a then-record $1,626,580. It was the first time that a million-dollar amount had been exceeded for a boxing event.
Interest in the fight was keen, as this photo illustrates, showing a crowd of more than 10,000 outside the New York Times building in Times Square awaiting updates.
In addition to those assembled at the fight location in New Jersey, tens of thousands gathered in various public venues — bars, restau- rants, theaters and halls where ham operators or radio hook-ups had been made. Among such locations, for example were: Loew’s New York roof top at Broadway & 45th St. where some 1,200 were assembled; Colonial Hall in Bridgeport, Connecticut where an audience of 500 enjoyed the returns courtesy of the Bridgeport Radio Club; some 570 listened to the fight at The Playhouse in Wilmington, Delaware — and at hundreds of other such places. In Times Square, New York a huge throng of some 10,000 people gathered outside the New York Times Building to hear marquee-posted updates of the fight that were relayed to the crowd.
New York Times photo showing Dempsey standing after a Carpentier knock down.
By fight time, the anticipation and build-up for this fight was sky high. In addition to Rickard’s promotion, famous writers such as George Bernard Shaw chimed in. Shaw claimed that Carpentier was “the greatest boxer in the world” and suggested that the odds should be placed 50-to-1 against Dempsey. But the match turned out to be less of a contest than many assumed it would be, as Dempsey dominated — but not a first. Carpentier got off to a fast start and hit Dempsey hard in the first round, and again with two hard shots to the head in the 2nd round, stunning the champ. One reporter at ringside, however, noted a furious comeback by Dempsey with a flurry of punches, still in round 2. Carpentier broke his thumb when he hit Dempsey in the 2nd. In the next round, the bigger, stronger Dempsey began to get the best of Carpentier, punishing him on the ropes. In round 4, the Frenchman was knocked down once, and then again for the ten-count. Dempsey won. But in an interesting gesture of kindness no doubt rarely seen in a boxing ring, Dempsey moved to help his opponent to his feet and to his corner at the fight’s end.
The fight’s results made front-page news across the country, along with the equally big news of the fight’s 1.6 million-dollar gate (see headline below photo).
The results of the fight were big news all across the country in the next day’s newspapers — including the fight’s astounding $1.6 million gate. Some historians, in fact, see the fight as a key landmark for the Golden Age of sport that boomed during the 1920s; a Golden Age that also brought expanded media coverage and business promoters like Tex Rickard into the arena, setting sports media on the path to big-business entertainment. As for radio, other sports broadcasts followed. By August 5th, 1921, the first broadcast of a baseball game was made over Westinghouse station KDKA — a game between the Pittsburgh Pirates and the Philadelphia Phillies from Forbes Field in Pittsburgh. Demand for home radio equipment soared that winter. By the spring of 1922, David Sarnoff’s prediction of popular demand for broadcasting was coming true, and over the next eighteen months, he and RCA gained in stature and influence. RCA soon went into cross-licensing arrangements with AT&T and Westinghouse, which helped propel the company into a leadership role in both the broadcasting and recording industries.
Ringside broadcaster calling the fight’s blow-by-blow action, then sent out across northeast U.S. from Hoboken, NJ.
By 1922, there were 30 radio stations in America, and things picked up considerably after that. By late January 1923, programming from New York’s WEAF station was being carried simultaneously over a second station WNAC in Boston, giving rise to the concept of the “network” or “chain broadcasting.”
Less than a month later, on February 2nd, a transcontinental network broadcast link was formed between WEAF in New York and KPO, San Francisco, which was the Hale’s Department Store station. Although New York’s WEAF had featured one of radio’s first paid advertisements in August 1922 — by the Queensboro Corporation using a ten-minute pitch to advertise a new real estate development — broadcasting was not yet supported by advertising.
Most of the early stations were owned by radio manufacturers, department stores trying to sell radios, or by newspapers using them to sell newspapers or express their owners’ opinions.
Photo from ringside also showing part of immense crowd. Carpentier is down for the count here. Radio broadcaster is located at the tip of the white arrow. Photo from, ‘Wireless Age’, August 1921.
Still by 1923, the number of stations had grown to 550 and about 3 million people had access to some kind of radio, many using crystal sets with earphones to receive news, bulletins and music. Radio programming soon expanded to the stock market, weather reports, comedy shows, music broadcasts, and more. In the fall of 1923, another sporting event — baseball’s World Series games between the New York Yankees and the New York Giants — helped boost radio again, making a big impression on many listeners, as a former concert singer by the name of Graham McNamee began doing the game’s play-by-play in a colorful and enthusiastic announcing style on New York’s WEAF. McNamee thereafter became one of radio’s first broadcast personalities. In 1926, RCA purchased its first radio station, WEAF in New York it also launched the National Broadcasting Company (NBC), the first radio network in America. Four years later, David Sarnoff had become president of RCA and NBC.
Map showing approximate range of the Dempsey-Carpentier radio broadcast in the eastern U.S., reaching a potential audience of 200,000-to-500,000.
Radio historians mark the July 1921 Dempsey-Carpentier fight as one of the landmark events advancing the “radio era” and big-audience communication. And as would become the pattern for other communications technology in the future — whether the Muhammad Ali vs. Joe Frazier fight by satellite TV in 1975, or subsequent global telecasts of World Cup Soccer, Superbowl games, or the Olympics — big sporting events would often be used to introduce or showcase new technology or expanded capability, reaching not just hundreds of thousands, but hundreds of millions and billions. The 2008 Olympics in Bejing, for example, had an estimated total audience of some 4 billion viewers. Special, multi-venue rock concerts and global charity events can now reach billions as well. And online communications only add to these numbers. Still, it wasn’t that long ago when our communications world was a lot smaller; when “big” was a few hundred thousand, as it was on that day in July 1921 when the human voice beamed out over the northeast United States.
Ticket for the Dempsey-Carpentier fight of July 2, 1921, with promoter Tex Rickard’s name at lower right, main stubb.
Jack Doyle, “Dempsey vs. Carpenteir, July 1921,” PopHistoryDig.com, September 8, 2008.
Sources, Links & Additional Information
1921 poster announcing filmed newsreels of the Jack Dempsey-Georges Carpenteir boxing match.
Cover of the fight program for the July 1921 Jack Dempsey-Georges Carpentier boxing match.
“July 2nd Fight Described by Radiophone – The Great International Sporting Event Will Be Voice-Broadcasted from the Ringside By Radiophone Under the Direction of the National Amateur Wireless Association on the Largest Scale Ever Attempted,” The Wireless Age, July, 1921.
“Voice-Broadcasting the Stirring Progress of the ‘Battle of the Century’ – How The Largest Audience in History Heard the Description of the Dempsey-Carpentier Contest Through Use of the Radiophone,” The Wireless Age, August 1921, pp. 11-21.
The familiar logo of ESPN, the sports cable TV network.
In July 1978, Bill Rasmussen of Bristol, Connecticut, a former sportscaster and recently fired communications man for the New England Whalers ice hockey team, came up with the idea of creating a regional sports TV network. Rasmussen had already been thinking about how to syndicate the Whalers ice hockey games and University of Connecticut basketball on the state’s cable systems. Cable television then was still in its infancy. CNN, MTV, HBO or anything approaching a major cable system had yet to emerge nationally. Rasmussen and his son, Scott, a former sports announcer, met with an RCA salesman inquiring about the cost of channel space on a new communications satellite. In 1978, an all-sports cable network was hardly a “no brainer.” The three TV networks combined then broadcast only about 20 hours of sports a week.They learned that it was cheaper to buy round-the-clock time than individual blocks of several hours. But then, the big question became how to use all that time? On a road trip by car to New Jersey in August 1978, Rasmussesn and his son argued about what to do. That’s when they hit upon the idea of “all sports all the time”– offering continuous sports programming over cable around the clock. This plan was hardly a “no brainer” at the time, especially since even the three major TV networks combined only broadcast about 20 hours of sports a week. Still, a Wall Street Journal article that Rasmussen had read pointed up the groundswell and potential in the new cable TV business, and he suspected that he might be on to something. Yet finding the content, the financing, and the help needed to undertake such a venture would be formidable. The next several months were spent organizing, doing paperwork, and seeking sponsors.
After being turned down by a half a dozen or more potential investors, Rasmussen met Stu Evey an executive vice president at Getty Oil who managed a variety of projects for the oil company. Evey used Getty’s financial experts to analyze the market and evaluate what might result from investing in the new venture. In February 1979, Getty initially agreed to put up $43,000 for an option to buy 85 percent of the new cable sports network. Millions more in Getty dollars would follow.Sports Illustrated called ESPN “one of the strangest creations in the history of mass communications.” Stu Evey would become ESPN’s first chairman and would later write a book about the experience (see below). On September 7, 1979, a Saturday evening at 7 p.m., the “Entertainment Sports Programming Network” launched its first program as a regional sports cable channel. It began with a show called “Sports Center.” A few weeks later RCA awarded Rasmussen the satellite space for 24-hour programming. ESPN was on its way, for good or ill. The first few years entailed a hodge-podge of programming — slow-pitch softball, kick boxing, racquetball, volleyball, karate, Australian Rules football, Irish hurling, tractor pulls, and other arcane sports. Broadcasting through the weekends and a few hours each weekday, the station lost millions of dollars. Sports Illustrated called it “one of the strangest creations in the history of mass communications.” Still, ESPN had the industry’s attention.
Former Getty Oil v.p. Stu Evey's 2004 book on the making of ESPN.
Early on, Rasmussen had also rounded up broadcasting rights for University of Connecticut sports events, and later other National Collegiate Athletic Association (NCAA) games, including tape-delayed college football games and NCAA basketball games. In 1979, fan interest in college basketball had been ignited by two young rival players named Magic Johnson and Larry Bird who battled each other in the 1979 NCAA finals. In 1979, fan interest in college basketball had been ignited by two young rival players named Magic Johnson and Larry Bird.However, there was little TV coverage of the games leading up to the NCAA finals until ESPN stepped in with live and tape-delay coverage. Those games proved a big boost to ESPN’s growing following. Gradually, executives and sportscasters were lured from some of the other networks and a handful of anchors became regulars — among them, Chris Berman, Tom Mees, Bob Ley, and Dick Vitale. Rasmussen, meanwhile, became less involved as the network grew more corporate, staying on the board of directors through 1981 but later cashing out.
In August 1982, ABC television agreed to supply some programming to ESPN in exchange for an option to purchase up to 49 percent of the company. ESPN meanwhile, began more coverage of college football in 1982, and a year later began its first professional sports broadcasting with the games of the fledgling United States Football League (USFL). The USFL coverage lasted three years and also included some programming outside of the U.S. ESPN also made a major business change in 1983 by beginning to charge cable companies — rather than paying them — for carrying its programming. Even though this only resulted in pennies per subscriber per year, it nonetheless marked a turning point toward profitability. Still, ESPN was operating in the red but it was now reaching more than 23 million households.
ABC & Cap Cities
In 1984, ABC shelled out more than 225 million to acquire ESPN.
In January 1984, as a result of its earlier programming deal requiring ABC to purchase at least 10 percent of ESPN, ABC acquired 15 percent of ESPN for $25 million, with the right to purchase more in the future. It also turned out that ESPN’s majority owner, Getty, was itself in play, and was sold to Texaco. ABC then shelled out $202 million to Texaco in April 1984 to buy the remaining shares of ESPN. ABC then sold off a 20 percent piece of ESPN to raise cash, a share later owned by the Hearst Corporation. ABC by this time was itself quite prominent in sports broadcasting, having among other things, Monday Night Football, extensive Olympic coverage, and college football coverage under the leadership of Roone Arledge. With ABC as owner, ESPN continued to grow, adding National Hockey League games in 1985. Then in 1986, another change in ownership occurred when Capital Cities Communication, a large broadcasting group, acquired ABC for $3.5 billion. Still, under Cap Cities, both ABC and ESPN continued their growth in sports broadcasting. In November 1987, ESPN began its Sunday Night Football program featuring NFL games. This marked a major development in cable’s arrival as significant player in sports programming. Two years later, ESPN signed a $400 million deal with Major League Baseball.
In 1990, The Wall Street Journal ranked ESPN # 1 on cable, ahead of CNN & MTV, with 54.8 million subscribers. By the early 1990s, the cable TV revolution was in full flower with CNN, MTV, and other major networks. And in the new industry, ESPN was found among the top players. A Wall Street Journalranking of the major cable operators in 1990 placed ESPN at #1 with 54.8 million subscribers, ahead of #2 CNN with 53.8 million, and #6 MTV with 49.3 million. ESPN was still growing. In March 1992 ESPN’s international division acquired 50 percent of the European Sports Network. At home, ESPN Sports Radio was also launched in 1992 and a second TV channel, ESPN-2, debuted in October 1993 beginning a focus on sports such as soccer, in-line skating, and mountain biking. In early May 1994, ESPN acquired Creative Sports a TV/radio sports marketing, syndication, and production company which was later renamed ESPN Regional Television. In January 1995, ESPN distributed the Super Bowl game to television outlets in more than 100 countries. Then came Disney.
Disney Takes Over
In August 1995, the Walt Disney Company, one of the world’s largest entertainment corporations, announced it would acquire Cap Cities/ABC for $19 billion. The deal stunned Wall Street and the entertainment industry. But one of the assets Disney was most pleased about getting in the deal was ESPN. At the time, Disnsey’s chairman Michael Eisner called ESPN “a magic name,” comparable to Coca-Cola or Kodak in brand recognition. The all-sports network by then was seen in 66.3 million American households and 95 million around the world. ESPN had already become a booming profit center for ABC. “The channel has been our biggest growth area on a percentage basis over the past five years,” said Robert A. Iger, ABC’s president in August 1995. Disney’s Michael Eisner called ESPN “a magic name,” comparable to Coca-Cola or Kodak in brand recognition. Media analysts were then projecting good days ahead. ESPN and ESPN-2 were slated to generate cash flow of $350 million in 1995 and $400 million in 1996, making it the most profitable of all cable TV services. ESPN was then worth between $4 billion and $5 billion. Everywhere that Disney CEO Michael Eisner went in New York that August touting the deal — from newspaper and radio interviews to Larry King Live — he couldn’t say enough about ESPN. He also saw the possibility of “brand build-out” just as Disney had done with its own products. “We know that when we lay Mickey Mouse or Goofy on top of products, we get pretty creative stuff,” Eisner said. “ESPN has the potential to be that kind of brand. ABC has never had our resources, and we haven’t had ESPN. Put the two together and who knows what we get.” ESPN’s sports fare was also unique in its live coverage aspects, marketable most anywhere in the world.
ABC and Disney executives had already concluded that the most exportable forms of TV entertainment were sports and children’s programming because they have universal appeal and offend no political position. “But the leverage of those two together in what used to be third world countries, or closed countries, is enormous,” explained Eisner in August 1995. The most “exportable” forms of TV entertain- ment, it was thought, were sports and children’s programming because they had universal appeal and offended no political position. “There are 250 million people in the middle-class of India alone…” Disney also liked ESPN’s aggressive marketing of its sports news and information around the world, from Latin America and Europe to Asia and Australia, seeing additional potential for cable and satellite-delivered, locally popular sports like cricket in India or table tennis in China. “We think sports is a good inter-national language,” said Steven Bornstein, ESPN’s president. Disney technology could then transmit a single channel into every corner of the globe, and was looking for more new and distinct programming to telecast and incorporate into its stores and theme parks.
1997: ESPN Classic begins.
Under Disney’s umbrella, ESPN continued to grow in new ways, including acquisitions. In early October 1997, ESPN acquired Classic Sports Network, a 24-hour, all-sports network that had taken form in the Midwest, since renamed ESPN Classic. This channel initially focused on older, “classic” sporting events and sports stars from the past, and developed a loyal following. Meanwhile, for the year 1997, ESPN registered solid growth and was more profitable than NBC. Disney continued helping ESPN extend its brand with ESPN stores and ESPN-themed products. Prior to the Disney acquisition, one of
'ESPN Zone' restaurant & enter-tainment center at 1472 Broadway in New York.
the first ESPN restaurants had already been planned for Disney’s Boardwalk at Walt Disney World in Lake Buena Vista, Florida. Disney would subsequently help ESPN build more “ESPN Zone” restaurants, some with expanded entertainment centers. There are now at least eight of these restaurant and entertainment centers in the U.S. — Anaheim, Atlanta, Baltimore, Chicago, Denver, Las Vegas, New York, and Washington — each complete with gaming rooms, big-screen TVs, and hundreds of smaller TV throughout, broadcasting ESPN fare and other programs.
In 1998, ESPN The Magazine was launched, and has since become a serious competitor to Time, Inc.’s Sports Illustrated with nearly 2 million subscribers. In 2001, the Bass Anglers Sportsman Society was acquired and became the basis for more than two dozen ESPN Bass tournament and fishing shows. In 2002, ESPN and ABC acquired television broadcasting rights for National Basketball Association (NBA) games. But football continued to be a mother lode for ESPN. In 2005, when ESPN paid $1.1 billion for the rights to Monday Night Football, some business analysts thought the network paid a too rich a price. But by the end of 2006 it was clear that ESPN had captured a worthy share of households and cable viewers — averaging in the 10-to 12-million range — and producing the largest household audiences of the year for at least 16 consecutive weeks. But still more contracts were on the way.
European soccer, 2006.
In December 2006, ESPN and ABC landed rights for the European Soccer Championships, most carried on ESPN outlets, along with Spanish language rights for ESPN’s Deportes network and pay TV in Latin America. For the year 2006, Disney reported that ESPN delivered double-digit growth for company, both in revenue and operating profit. Its ratings overall were also up. During 2006, in fact, more people watched ESPN’s four U.S. cable channels than ever before. And Disney fully expected the trend to continue, especially with the addition of ESPN-hosted NASCAR auto-racing, America’s fastest growing spectator sport.
ESPN, The Magazine, Aug 06.
Today, ESPN is a giant global sports broadcasting and marketing behemoth worth billions of dollars. In December 2006, investment bank UBS announced at a New York conference that they had determined ESPN’s value to be $28 billion, accounting for about 40 percent of Disney’s $70.7 billion market capitalization.In 2006, UBS determined ESPN to account for about 40% of Disney’s market cap. In addition to its four U.S. television networks –ESPN, ESPN-2, ESPN Classic & ESP NEWS — it also has 24 ESPN inter-national networks that broadcast in eleven languages. ESPN also operates a dedicated college sports TV channel, various internet websites, video games, CDs and DVDs, holds a number of mobile-media content deals, and more.
A summary of some of ESPN’s more prominent parts and its ever-growing empire follows below:
The flagship network, ESPN, is now seen in 94 million households with programming that inlcudes coverage of more than 65 sports including MLB, NBA, NFL’s Monday Night Football, NASCAR, FIFA World Cup, WNBA, college football, men’s and women’s college basketball, golf, Little League World Series, and the X Games. ESPN Original Entertainment creates branded programming outside of ESPN’s normal fare, and ESPN on Demand offers sports and other exclusive content from ESPN and outside sources.
ESPN-2 is now seen in over 93 million households. Its programming features NASCAR racing, MLB, college football and basketball, golf, tennis, FIFA World Cup, MLS, and more. It also offers “Cold Pizza,” a two-hour morning show that combines sports with pop culture and “lifestyle features.”
ESPN Classic is available in over 63 million homes. Its programming focuses on sports history, and “classic” games, personalities, and stories from the world of sports, such as shows from the ESPN Big Fights Library. Its documentaries and programming have won Emmy and Peabody Awards, such as for its “SportsCentury” show. Its coverage generally relates to all the major professional sports plus college football and basketball.
Begun in November 1996 with 1.5 million subscribers. ESPNEWS is the only 24-hour sports news network and has established itself as a major sports news and information source in more than 60 million homes.
ESPN-U is the 24-hour college sports TV network that specializes in college sports. It was launched in March 2005. ESPN-U has college marketing agreements with universities and colleges in Kansas, Oregon, and South Florida. In August 2006, ESPNU premiered ESPNU.com., a dedicated website that includes live streaming college sports events, podcasts, and other material from ESPN and elsewhere.
ESPN-U has college marketing agreements with universities and colleges in Kansas, Oregon, and South Florida.
ESPN Regional TV
Also known as ERT or ESPN Plus, ESPN Regional Television is one of the largest TV/radio sports marketing, syndication and production companies, producing more than 900 events annually for ESPN networks, ABC, and other national, regional and local outlets. ERT is the nation’s largest syndicator of intercollegiate sports programming, and produces more than 900 college TV programs, including football, basketball, NCAA events, golf and other events. ERT also produces five ESPN-organized football Bowl games, and also the College Football Awards program. In addition, ERT is the production headquarters for ESPN-U.
ESPN Radio and affiliates comprise the nation’s largest sports radio network, providing content to more than 700 stations nationwide, including those in the 100 top markets. It has 350 full-time affiliates including owned stations in New York, Los Angeles, Chicago, Dallas, and Pittsburgh. Its programming is also available to U.S. troops in more than 175 countries through American Forces Networks. Programming includes: NBA and Major League Baseball games, college football playoffs and other coverage. An affiliate web site, ESPNRadio.com is one of the most visited online sports radio sites in the U.S., logging as many as 250,000 online listeners per month, also producing more than 35 original podcasts each week accounting for more than four million downloads per month to portable digital devices.
ESPN’s web site, ESPN.com, launched in April 1995 is the leading sports Web site, averaging 18 million unique users per month, more than any other sports Web site, according to Neilsen Netratings. It produces 350-450 new videos each week, featuring daily highlights, news, interviews, and originally produced exclusive content.ESPN.com is the leading sports web site, averaging 18 million users per month, more than any other sports web site. The site also features up-to-the-minute sports news, statistics, analysis and scores; multiple free and premium fantasy games; free online poker; live event webcasts; live chat with players, ESPN experts, sports personalities; a wide array of sports journalism including that of ESPN The Magazine.
ESPN also provides up-to-the-minute scores, stats, news headlines, video and some exclusive programming to numerous mobile and wireless providers such as Verizon, QUALCOMM and others. It has features agreements with every major U.S. carrier and 35 international carriers. ESPN Mobile TV offers 24/7 streaming video of ESPN news, highlights, live games and events. ESPN’s wireless Internet site is the #1 wireless sports content site, generating nearly nine million unique visitors monthly.
October 9, 2006 issue of 'ESPN The Magazine' -- covers sports mostly, but sometimes a Tom Cruise story or two may also appear.
ESPN Books, started in 2004, is a publishing company operated by ESPN that has published about 20 books so far. ESPN Books also produces ESPN’s yearly sports encyclopedia and operates its own book club.
ESPN The Magazine
Launched in March 1998, ESPN The Magazine has a circulation base of 1.95 million. It covers a variety of sports news and offers in-depth commentary, opinion, and top photography. The magazine also includes occasional stories on celebrities and entertainment. In 2003 and 2006 it won National Magazine awards for general excellence. The magazine’s covers have also been noted by the American Society of Magazine Editors.