Rupert Runs For DaylightBy
Like a well-trained athlete, News Corp. Chairman Rupert Murdoch knows it helps to be lucky, too. Take his Fox Inc.'s month-old TV broadcast of professional football--secured at the dangerously high price of $1.6 billion for four years and all but guaranteed to produce losses well past Super Bowl Sunday. That was before the collective minds that control Major League Baseball decided on a protracted strike just as America's pigskin heroes were taking to the field.
Now a month into the current season, Fox is starting to look like the Green Bay Packers of old. Ratings for the first two weekends were up by 13% over a similar period last year, when the games were broadcast by CBS Inc. And true to Fox's tradition, ratings were especially strong for those under age 34. Better yet, with the Sept. 14 decision by baseball owners to cancel the rest of the season, Fox won't be competing with pennant races, playoffs, or the World Series.
SUNDAY VACUUM. "No one in San Francisco is flipping any coins between watching the '49ers or Matt Williams," says media buyer Paul Schulman, president of Paul Schulman Co. Advertising agencies once predicted Fox would fall 5% to 7% behind CBS last year--or roughly 600,000 viewers--says Ralph Heim, manager of media placement at Coors Brewing Co. But that was before baseball scoreboards in Chicago, Los Angeles, and New York went dark. "Now, there's a vacuum for the sports fan on a Sunday afternoon," says Heim, a heavy advertiser on Fox.
Early numbers for NBC Inc., which carries the American Football Conference games, also are up. But even before Bud Selig and the other baseball moguls fumbled away their share of TV riches to football, Fox had launched a massive promotional blitz on its own network shows to lure channel switchers. Football star-turned-commentator Howie Long showed up on Beverly Hills 90210, while The Simpsons gathered around to watch the Sunday NFL game on Fox. (Homer Simpson on football: "It takes the unpleasant aftertaste of church out of your mouth.")
In all, Fox spent more than $30 million to launch football--including billboards and movie trailers featuring announcer John Madden. It also didn't hurt that Fox has had interesting games so far, including the first matchup of superstar quarterback Joe Montana and his Kansas City Chiefs with his former San Francisco '49er teammates. Coming up: a major cross-promotion with McDonald's Corp. featuring 400 free Super Bowl tickets.
Still, at the outset, Fox had hoped simply to match CBS's ratings from last year. Even at that, Murdoch said, he saw losses of at least $100 million the first year. Now, his executives say that estimate will likely be slashed. The network is already peddling the 25% of spots it had held back as compensation to advertisers if it failed to meet its viewership guarantees. Those 30-second spots may sell for as much as 35% above the average $110,000 Fox charged earlier in the season, says Jon Nesvig, president of Fox's sales unit. Playoff spots could fetch $200,000 or more.
Fox is also wrangling to get some of the $130 million in ad sales that had been sold for the now-canceled playoffs and World Series by the Baseball Network, a consortium of ABC, NBC, and Major League Baseball. Among the sponsors were General Motors, Texaco, MCI Communications, and Avis.
STRONG LURE. Football's better-than-expected numbers, coupled with a suddenly tighter market for TV ads, prompted Fox to increase to $300 million its initial $250 million projection for ad sales, according to one source familiar with the network. And those numbers don't count the estimated $75 million in additional advertising sales that Fox will generate this year from upgrading its station lineup. With pro football as a powerful lure, Fox has replaced lower-powered UHF stations with VHF stations in such football hotbeds
as Cleveland and Kansas City, and it will soon upgrade from its Dallas station's UHF as well. That will help Fox increase its coverage to 98% of the country from 92%.
Of course, a lot can still happen to keep Fox from television's end zone. What if Dallas' golden-boy quarterback, Troy Aikman, breaks a leg, or the New York Giants suddenly fold? And check out the fourth weekend of the season, when popular teams such as the Cowboys, New York Giants, and Philadelphia Eagles all have the day off. That leaves Fox to cover such weak sisters as New Orleans, Tampa Bay, and Atlanta. Bad games don't make healthy ratings. But for now at least, the ball is sailing Murdoch's way.