The results of backing Tonty's horse

[Napoleon]

Howard Katz, the president of ABC sports and guy who strongly backed the IRL has resigned. Frankly I am surprised he did not get the axe more then a year ago based on stories that have appeared in the press about the pathetic performance of ABC, in particular the sports department, as reported in the financial press.

http://www.mediaweek.com/mediaweek/headlines/article_display.jsp?vnu_content_id=1829391

Duh, that is TONY'S horse.

[sundaydriver]

There's a rumor going aroung that ABC is going to dump all sports programming. Don't have any idea if it's true but that would be a interesing move if they did.

[Napoleon]

Originally posted by sundaydriver
There's a rumor going aroung that ABC is going to dump all sports programming. Don't have any idea if it's true but that would be a interesing move if they did.

The only place I have seen that rumor is on the CART/IRL racing boards. I suspect its like the "TG's sister is suing him" or "TG is suing the Milwaukee mile" post we have seen in the past, 100% fiction.

Having said that though every article I have read on the subject in mainstream, respected, responsible publications (which amount to something like 10 or more over the last 18 to 36 months) has made it perfectly obvious that the "old" sports business model is a money looser. ABC is the prime example of this, although FOX is in a bit of the same boat. In fact privately I felt at prior to ABC re signing the IRL to a contract that ABC was going to dump them because it was clear that contracts of that type were of questionable value and signing one would have been "sailing into the wind" on the part of ABC. They proved me wrong.

Why do you think NBC is showing Arena Football, in which NBC now has an ownership stake and which is contractually obligated for something like 100 years to stick with NBC without raising their rates dramatically. Most college basketball games are now shown on network TV under the same arrangement CART gets on CBS. I don't have the list of events that now must use the CART/CBS model at my fingertips but it is substantial, and includes some surprisingly strong sports properties.

Litterally NBC and CBS are handing ABC its lunch and in large part it is because of attrocious buisness decisions that were made at ABC Sports. I am actually stunned that Katz lasted as long as he did.

And trust me, this isn't a CART fan just snickering at something bad happening to a partner of the IRLs but something you would get from the pages of Barrons, the Wall Street Journal, New York Times or other publications that have reputable journalistic traditions.

So although I think the rumor that ABC is dumping sports has no basis in any source that can be tied to anyone in the know, but is simply an internet creation, I think the writing is on the wall that at some point ABC must change the way they program sports, whether by following the NBC model or getting out all together, or face a revolt from its investors and Wall Street.

[sundaydriver]

Nap, I agree that the rumor is most likely pure fiction but as you have pointed out, ABC cannot continue to operate as it has in the past.

With the way things are going economically, I would not be surprised to see more deals like CART's and CBS/SpeedTV.

What do you think the chances are of ABC pulling the plug on the Indy 499?

[Napoleon]

Originally posted by sundaydriver
What do you think the chances are of ABC pulling the plug on the Indy 499?

During the current contract, less then zero, unless they have a buy out clause and by doing an analysis similar to the following

projected revenues from current contract less projected cost of current contract < projected revenues from replacement programing less cost of replacement programing less buy out of IRL contract (or alternative amount they would have to pay if ABC breachs contract).

The above is a little bit of an oversimplification since the first part of it really should take into account what wiggle room ABC has in what it has to show and on what network. Theoretically if they have the right, but not the obligation, to show any IRL race, so long as they continue to make whatever payment they have agreed to make, then in reality it maybe in ABC's best financial interest to not show any other IRL race, or use it as filler at 2am, except the IRL500 and use the time they free up for more productive uses. Quite frankly even in that situation I can't imagine that they don't run the IRL 500 on ABC.

As a PS note how this year ABC dialed back the number of hours they give to the IRL. I suspect they ran numbers in a formula similar to the above and realized that it was not in their interest to run all the hours of programing they have paid for on their stable of channels.