How I got Schooled By Ted Leonsis ( Why the NHL ain’t dead, even though the Ratings Suck!)

Robert Seidman ©June 7, 2007

Many people ask me about my confrontational style and approach and while I primarily attribute this to genetics, it’s an approach I embrace very much because it’s quite often the best way for me to learn.

We live in a wonderful world where Robert Seidman – an out of work blogger – can actually “confront” a guy like Ted Leonsis (a man with a net worth after taxes of over $100 million, who owns an NHL franchise and part of an NBA franchise).

Fortunately, Ted doesn’t have any problem with the confrontation and so for me, the out of work blogger, there is a great opportunity to think and learn. And learn I did. Because I was wrong and Ted was right.

Yesterday at about 2:45pm PDT when I was watching ESPN’s PTI and listening to Kornheiser absolutely rail on the NHL about its abysmal ratings (“if Bettman looks at these ratings and says. ‘we’re fine, everything’s good, the league’s healthy…he’s whistling past the graveyard!” If you had asked me yesterday at 2:46pm if I’d ever get around to disagreeing with Kornheiser, I’d have said, “No way, Mr. Tony is my boy!” Mr. Tony is my boy, but he’s wrong just like I was.

There is absolutely NO correlation between the VALUE of the NHL franchises (which are going up) and the national ratings for the Stanley Cup (which are going down). I am convinced of this now in the way that I am convinced that at some point this morning Apple stock (AAPL) was at around $126.50 even though not a single iPhone has yet been sold. Still, the value at that moment was the value, and does not correlate in any way to the # of iPhones sold.

While I do not believe the NHL will be in better shape 2 years from now if the national ratings for the Stanley Cup are where they are now (or worse), I do believe that “right now” the ratings are not actually indicative either of franchise values or the health of the league, and that right now things are actually much better for the NHL than they were a few years ago. More on this later...

Leverage Shifts to the Advertisers

...and Nielsen will try to make both the advertisers AND the networks happy. They will not succeed. Why? Because it's obvious: the Networks had the upper hand and now they don't.

Check out this story from Advertising Age, in the face of the actual viewership data for the commercials themselves, what did the Networks focus on? Getting every sliver of a dollar for the DVR audience that might still watch the advertisements. This seems to imply that the networks didn't like the actual data at all and are searching for a way to stick with the old model.
I don't see them (the networks) getting away with that for long, if at all and I see this as a sign that Mark Cuban was more right than he knew. The leverage isn't moving in favor of the advertisers, I think it must have already moved. The advertisers have the upper hand now.

I note that Nielsen has shared still ZERO data with the general public on the ad ratings themselves (Nielsen too only focused on DVR viewership in their press release, which seems to indicate Nielsen sides with the Networks...Nielsen shouldn't have a side here).

All this noise without any data in the public...strikes me that the commercial ratings themselves may be worse than anyone wants to talk about. The DVR thing is merely a distraction until we see the real data for the commercials themselves. I can't help but feeling if it was "OH MY, PEOPLE LOVE COMMERCIALS! LOVE THEM!" we would have seen some data already. We didn't. That's bad news for the networks and good news for the advertisers.

Nielsen to Begin Ratings for Ads

Later this month Nielsen plans to release viewership data for advertising spots. Advertisers are concerned and not just that people are using DVRs and fast-forwarding through commercials, but that they are getting up during the ads and not watching them. We've always done that of course, but the concern is we're doing it a lot more lately.

The article references tactics that advertisers are toying with to win back viewers to ads.

I have a simple plan: somehow turn every commercial into some kind of lottery. The prizes don't need to be that big if you're keeping millions of extra eyeballs tuned in. The problem is that you'd have to be creative in integrating the lottery into the ads, otherwise nobody is paying any attention to the product being advertised.

I've been watching a lot more TV than normal this year. I've even done something I almost never do: watch live broadcast TV for things other than sports. I watched the last few episodes of Heroes live, without any timeshifting on the big screen, in high definition. Everything looked great and even many of the commercials were in HD.

But the commercial breaks are simply too long.

During this year's finale of Grey's Anatomy, in addition to the actual show not being that good, the commercial breaks were unterminably long. So long that even though I was watching the recording of it off my DVR and was pressing down the 30 second skip button, I was having to press it more times than I'd ever had to in my life

There were commercial breaks that were nearly 5 minutes in length. In 5 minutes, I can get up, use the bathroom, wash my hands, get a drink of water, go send a couple of e-mails...

I understand the point with a successful show is to capture as much ad revenue as you can in the finale, but to that end, it was already an extended finale (it ran 1 hour in 20 minutes in real time, with commercials) extending spots themselves was just encouraging people to tune out.

Ultimately with the Nielsen data on ad viewership what I'd love to see is how many people watched the first ad of the break and at least part of the last ad, compared to the ads in the middle.

I think those advertising in the middle probably saw a significant drop off of viewers, while the last spot before the show came back on probably did very well. What I'd like to see from the Nielsen data is what the dropoffs are, by each spot running in the break. There's probably a bigger delta between the viewership of the middle spots and the last spot than there is between the pricing of those two spots.

Or I'm just plain wrong, but we'll know soon enough when the study is released.

Sad about Cubes Being Sad

It doesn't take much to make me sad, really. And seeing Marc Cuban's blog entry regarding Donald Trump made me sad.

I'd like to think he is just distracting himself over how the Mavs ended the season and isn't envious that Trump's show ran for several seasons while Cuban's own reality-based TV show had only a very brief run.

I'd like to think that if I had what Cuban had I wouldn't even ponder Mr. Trump or his hair other than to laugh it off. I was also disappointed that Cubes restricted access to comments on that message.

Cubes is a smart guy and he has access to the ratings and so the one thing he knows is even though "The Apprentice" languished in the overall ratings this past season, it still scored consistently well in the coveted 18-49 with household income above $100,000 demographic.

There is no reason to feel sorry for the Donald. He'll be just fine.

Why isn't NASCAR on FOX?

Let me say straight away: I'm not in NASCAR nation. I like DRIVING REALLY FAST. Watching other people drive really fast doesn't do much for me.

But we're in a world that does not need much of an excuse to DRINK BEER! Capitalism LOVES anything that gets people excited about having an excuse to drink. NASCAR seems to accomplish this in spades. My friend Bill G. (the OTHER Bill G.) says that NASCAR trumps all other sports besides the NFL. Better than baseball, better than the NBA, and certainly better than the NHL.

My question is this: why doesn't FOX milk NASCAR for all the beer consumption it possibly can? I ask this because this past Saturday there was some kind of NASCAR event running on the SPEED channel. With a gun pointed at my skull, I couldn't tell you what channel the SPEED channel is. But still, it pulled over 3 rating and at it's peak had well over 3 million homes tuned in according to this story.

That crushed ANYTHING on Fox that night, according to these ratings so you figure if the things was on FOX it would have likely done much better than the 3 on speed plus the 1.x rating on FOX.

Why wasn't it on Fox?