The Curling Network? Don't count on it

NEW YORK Thu Dec 2, 2010 8:47pm EST

Philippe Dauman, president and CEO of Viacom, speaks at the Reuters Global Media Summit in New York December 2, 2010. REUTERS/Brendan McDermid

Philippe Dauman, president and CEO of Viacom, speaks at the Reuters Global Media Summit in New York December 2, 2010.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - After a stretch that has seen the creation of TV networks dedicated to the NFL, Major League Baseball, NBA and NHL, it is easy to wonder what's next.

A gymnastics channel? A cycling channel? How about a TV network devoted to curling, the sport of brooms and rocks most often seen during the Winter Olympics?

"It's hard to see that there's room for too many more (sports) networks," said Philippe Dauman, chief executive of Viacom Inc. "Pretty much everything that's out there today is covered."

Indeed, Dauman and other top executives speaking this week at the Reuters Global Media Summit warned that after a period of huge expansion the field of sports TV channels is in serious danger of becoming overcrowded.

The explosive growth in dedicated sports networks, as well as the ubiquity of sports on Walt Disney's ESPN and regional channels owned by News Corp's Fox and others, could extend to the U.S. Olympic Committee and World Wrestling Entertainment.

Both are eyeing creating their own networks down the road -- and for good reason. Leagues and sports properties see the potential that comes with strengthening a rabid fan base across the country while raking in the advertising dollars.

However, with rising sports programing costs sparking a chorus of complaints, count News Corp Chief Operating Officer Chase Carey among those skeptical that more sports networks can be sustained.

"People are carrying that a dimension too far," he said at the Reuters summit. "Everybody falls in love with it.

"You've had decades where it's been a quantity game and everybody's adding," he added. "You're actually now heading to a quality game and as you have more choice you really want to figure out how do you have quality channels as opposed to a strewn level of niche channels."

Viacom's Dauman said his MTV and Spike networks will schedule more sports-related shows, but launching a dedicated network is not in the cards.

"When people complain about the increase in programing costs, we have to recognize that a very large part of that is related to sports," Dauman added.

Disney's TV chief, Anne Sweeney, would prefer the leagues and teams ask themselves whether they can do a better job building their brands than her company's ESPN sports network.

"A key consideration is can I do for my fans what ESPN has traditionally done for their fans," she said.

Even Tony Petitti, chief of MLB Network, which had the most successful launch in cable TV history last year at 50 million U.S. homes, thinks any sport should first work to ensure broad distribution.

"It's a chicken-or-egg thing," he said. "It's hard to put meaningful content on a place that doesn't have a lot of distribution.

"To be real, in terms of advertising and homes and being measured (by Nielsen), 40 million is a threshold," Petitti added.

To ensure broad distribution, baseball gave a one-third equity stake in its network to several distributors. That is a model WWE is leaning toward using when it hopes to launch in mid-2012 or early 2013, chief operating officer Donna Goldsmith said.

MLB Network is now available in 56 million U.S. homes and hopes to reach 70 million before the 2011 season begins next spring. However, Petitti said giving away more equity to accomplish that is not likely.

One way it will further boost distribution is by adding exclusive content, including games, something it hopes to do when it signs new broadcast agreements after the 2013 season, he said. The National Football League took that path.

However, it's hard for leagues to ignore the rising broadcast rights being paid for games, Time Warner CEO Jeffrey Bewkes said.

"The value interest in sports keeps going up ... if you look at the ratings, the affiliate support, the advertising support, the revenue," he said.

"There seems to be a high economic support level for both national leagues and regional or local sports, so I don't know where it ends."

(Reporting by Ben Klayman; Editing by Paul Thomasch and Tim Dobbyn)

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