In media and sports, brands are more important than talent
(David Paul Morris/Bloomberg via Getty Images)
By: Brian Mulligan, CEO, Brooknol Advisors December 12, 2014
from TheFieldsofGreen.com USA Today
It’s the development of brands that creates value in sports, and in most every other business, for that matter. Brands develop trust with consumers, an advantage over competition and leverage and power in negotiation with programmers, employees, leagues and vendors, among others. Thus, allowing a greater share of the bottom line profits to flow to the brand.
ESPN’s Bill Simmons, AKA “The Sports Guy,” who has ran a afoul of ESPN management on several occasions, is said to be furious over his latest suspension. Simmons, among other things, is the creator and executive producer of the entertaining and insightful 30 for 30 long-form documentary series. In addition, he is a TV commentator for ESPN. For his trouble he is paid $5 million a year, but his contract is up soon.
I look for leading indicators to predict the future. I think I see it in the suspensions and fewer and fewer Simmons executive produced 30 for 30 documentaries and more of the long-form documentaries moving to E:60, ESPN Films and other ESPN properties. Those actions indicate ESPN is not going to re-sign Simmons.
Neither ESPN nor it parent company, Disney, does anything by accident. Both have thoughtful team player management teams. ESPN is the biggest brand in sports and Disney is arguably the biggest brand in entertainment. Both management teams understand the value and power of brands as well as anyone.
I read a recent article that Simmons leaving ESPN would be like NBC trying to reboot The Rockford Files that starred the late, great James Garner with Dermot Mulroney. That analogy is off. Garner was Rockford. Just like Oprah Winfrey is The Oprah Winfrey Show and Howard Stern is The Howard Stern Show. The brand and star are the same and hence the star has enormous freedom, power and takes the bulk of the profits.
The better analogy is the lead of Law and Order George Dzundza leaving after just one year because he felt it was too much of an ensemble cast. The show went on for a record-tying 20 seasons. Perhaps an even better analogy is David Caruso’s decision a little more than a year into NYPD Blues to leave the show because he thought he was the star and should be paid more. The show went on for a very successful 10 more years without him.
In both cases the show was the brand and made up of a talented ensemble cast. Much like ESPN is the brand and has a talented ensemble cast of on-air talent, SportCenter, breaking sports news, sports commentary, marketing, technical leadership, programs, games, documentaries, below the line talent and, last but not least, management.
The spin will be that Simmons walked away from ESPN, and the media and public will love that spin. Regardless of spin, the behavior of ESPN implies that it has already made the decision to let Simmons go. ESPN and Disney are the brands built up over many years and are about profits and not press releases. Simmons will be free to pursue his own path and extend his own brand and find out if he is Dzundza/Caruso or Oprah/Stern. Either way he will be starting with $5 million less a year.
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Brian Mulligan is currently the CEO of Brooknol Advisors, a Media, Entertainment and Sports Advisory Company. Mr. Mulligan has held CEO, Chairman, COO or CFO position of virtually every media/entertainment vertical for majors over a 30 year career, from Co-Chairman of Universal Pictures, CEO of Universal Television, Chairman of FOX Broadcasting and Cable, EVP/CFO of a Fortune 50 Company, SVP of MCA INC, EVP of Strategic Planning and Corporate Development Universal, Senior Executive Advisor Boston Consulting, Vice Chairman of Media/Telecom of a Money Center Bank, and worked extensively in/with private equity. Instrumental in over $175 billion of media and entertainment transactions.
