Truck Vendors Remain in High Gear: CEO Roundtable, Part I

Thanks to sky-high ratings and a series of lucrative new rights deals, the sports-production industry has seen a surge in both revenue and overall growth over the past year. Even with labor problems hitting both the NFL and the NBA in 2011, demand for HD mobile units by national networks and regional sports networks (RSNs) around the country continues to rise. As a result, several mobile vendors have rolled out new HD trucks this year, nearly all booked solid, and plenty more are planned for 2012.

Although the excitement surrounding 3D sports production has subsided, new HD avenues like Web and mobile streaming and mid- to low-level college sports offer potentially valuable new revenue sources for mobile-production providers.

“I think the industry is definitely in a good place,” says Game Creek Video President/owner Pat Sullivan. “For reasons that honestly escape me, the ratings have been amazing in almost every sector. When ratings are high, our customers can charge advertisers more, which allows them to aggressively invest in rights. They obviously need [mobile vendors] to take advantage of those rights, and that is where we can benefit.”

Nonetheless, challenges remain for an industry that is often at the mercy of conservative financiers, spastic fuel prices, and the troubling labor issues of professional sports leagues like the NBA and NFL.

“The future of our business looks extremely bright — until you factor in a pro-sports strike or lockout,” says Mobile Television Group GM/co-owner Phil Garvin. “That’s just the nature of the business. So part of our job is to anticipate them. A loss of dates [due to a lockout] is a horrendous blow, but we’ve planned for it.”

Bigger Rights Deals Means More HD
Regardless of the NFL’s and NBA’s labor struggles, the demand for live sports television has never been higher, a fact that is most apparent in the recent whirlwind of big-money rights deals between leagues and networks. Networks are investing in sports at a record clip on both the national level — see ESPN’s eight-year, $15.5 billion Monday Night Football pact — and regional level — for example, Time Warner Cable’s 20-year, reportedly $3 billion deal with the Los Angeles Lakers to launch two RSNs.

This increased investment has resulted in increased need for HD resources, especially in the RSN sector, where fans now demand the same HD quality seen in national network telecasts.

“The networks have been doing big HD trucks for a while, but now you also have regional nets doing full HD,” says Alliance Productions GM Craig Farrell. “That regional work is growing, and, as a result, people are building truly regional HD trucks. That is where the biggest growth is in the industry right now.”

Nowhere is this trend more apparent than in college sports, where the market’s crown jewel, football, has caused a tectonic shift in conference alignment, as well as a seemingly endless string of multimillion- and often billion-dollar rights deals and conference-network launches. As a result, football games that previously called for SD trucks now demand HD units, and conferences and schools are often willing to deal with the lowest bidder.

“The biggest trend we are seeing is that the events that were in SD a year ago — mostly college — are now asking for HD trucks,” says Garvin. “The problem with that is, they don’t have the budgets that the high-profile shows do. These clients are asking for HD trucks for SD prices. It is our job to try to accommodate that. If you can’t figure out how to do formerly SD shows in HD for a similar price, then someone else will.”

Mobile-production vendors are also beginning to peel back another layer in the college-sports market, beyond top-tier football, as conference- and school-specific networks like the Big Ten Network, the Longhorn Network, and the Pac-12’s soon-to-be launched conference and regional networks become popular.

“The big networks and conferences have billions of dollars tied up in rights to televise and distribute college sports events,” says Sullivan. “But they are probably only doing 20% of the inventory they have the rights to. So that extra 80% is going to have to be done somehow. It might be done on a low budget with a few students on a streaming show, but I think there are huge opportunities for our business to look at that and see if we can take advantage.

“If you look at the long-term time spans that these conference packages are running,” he continues, “they are clearly going to be all-HD at some point in time soon. It’s incumbent on guys like us to create a platform that is efficient for doing those lower-end events in HD. Otherwise, we risk them taking a different route entirely.”

Checking in on 3D
At CES 2010, the excitement surrounding 3D sports and 3D production could not have been higher, with plans announced for three new networks: ESPN 3D, DIRECTV’s n3D, and Sony/Discovery/IMAX’s 3net. And, although the technology and strategy behind 3D sports production have progressed by leaps and bounds, interest from consumers and broadcasters seems to have waned.

“The buzz of 3D just is not what it was two years ago,” says Farrell. “There are not as many clients asking for 3D because they think 3D is the next big thing. Instead, everyone is on their heels now waiting to see what happens. I don’t think 3D is dead, but I think the big 3D push came a little too early. The truck companies and [the technology vendors] are making money on 3D, but I don’t think the broadcasters or pretty much anyone else is making money on it yet.”

Additional reporting by Brandon Costa