Q&A: The National Football League (New Media Division) - August 2003  

In the first article in a new series of questions and answers with heads of the new media/interactive divisions of major US sports properties, Rachael Church, editor of Sport and Technology, spoke to Chris Russo, senior vice president of new media and publishing at the National Football League (NFL). Russo's background includes five years in marketing at public broadcaster NBC and five years at a film and TV production company.

What are your roles and responsibilities at the NFL?

I supervise the NFL's efforts in new media and new technology by finding new ways to reach fans through a range of new products and applications from the internet, interactive TV, wireless and some traditional media such as publishing. I am the general manager of all the functional areas within new media.

Does your background in production and programming help with your role at the NFL?

Yes, because a lot of what we do with our services for fans is driven by good programming and content - which certainly the NFL has a wealth of - and good marketing. It's about making fans aware of what you have to offer and getting them to use the services. The programming and marketing elements are really what drives our business. Of course the content that we have is so unique that it really is a great proposition.

Is the new media strategy for all the NFL teams handled centrally or separately by individual teams?

It's a little bit of a combination. On the web side we have the NFL Internet Network that involves the league managing NFL.com and the strategic relationships that cut across of all the team internet sites. We have a deal with AOL, SportsLine and Viacom that is in a sense incorporated into all of the team sites. However, the teams create their own websites in terms of the editorial and look and feel and they do their own local ad sales. Therefore there's a good amount of flexibility and autonomy for teams and that makes their editorial product better, yet we aggregate for the purpose of strategic relationships and it's a good mix.

Do you give teams guidelines on what they can and cannot have on their sites?

There are guidelines with respect to business issues and some limited guidelines with respect to editorial issues. But the editorial is largely driven by the teams. There are certain navigation bars that are standard and pieces of content that have to be in certain places. The theory was that teams are in the best position to cover their franchises in their communities on the ground there as opposed to trying to do that from one office from an editorial standpoint.

Are there any conflicts between NFL main sponsors being on the main website and local sponsors appearing on the team sites?

They are allowed to sell their own ads although there are certain league-level sponsors who share league and club marks, but there are very few of those. More and more the clubs are securing their own sponsors and there are some big league ones too but both co-exist. Their local sponsor revenues are quite significant in general. The web has been a component of that although it hasn't necessarily been a driving piece of that because the clubs are typically selling packages with local television signage and other event exposure.

Do the teams get to keep the revenue from their own advertising and sponsorship deals?

Yes, when clubs sell local assets, they keep those revenues. But the bulk of revenues generated through the internet network are shared revenues. So that strategic alliance we have with AOL, SportsLine and Viacom - all of those rights fee revenues are shared equally.

What's the biggest revenue earner on NFL.com?

We have a number of revenue streams, one is rights fees through the five-year deal with AOL, SportsLine and Viacom and that is a significant piece and those partners are providing those rights fees in consideration for a share of ad sale revenues and e-commerce revenues. So we have rights fees, e-commerce and ad sales as being the revenue drivers. We are also now beginning to introduce the notion of subscription services on the site.

Are you introducing subscription services because you feel a little left behind by what some of the other leagues have been introducing?

No, we've done extremely well in terms of monetising our site and the relationship that we've created with AOL/SportsLine/Viacom was predicated on driving significant numbers of fans to the web and building traffic and usage to build the ad sales and the e-commerce model. That has worked for us and our partners. Having said that, we've now evolved to a point where, as we develop more advanced applications and invest more resources in building unique content, it's important to monetise that and have that be part of subscription packages as opposed to simply be given away for free. The bulk of the content will still be free on NFL.com but there are special services that are going to require subscription fees and that will help us cover costs. There will be fantasy football-related services and audio/video-related services as those are the services that have the most appeal within the context of the subscription model right now. It's difficult to get fans to pay for standard news for example.

What about allowing fans to download entire matches like they can on MLB.com?

First of all our broader business model is a little different. The relationships we have with the networks with respect to our live games and video game product means it doesn't make sense to have the games available in video form on the internet, whether live or delayed. It wouldn't be prudent or good business for us. The web and what we do online is a great complement to the live game product but in my view, the television set is still the best place to watch the games. All our games are on television and for those who want to see even more, they can subscribe to our Sunday Ticket package of games. The web is a great promotional 24/7 vehicle but for us it's not a great conduit for live video distribution at least not in the US. That has not hurt us in terms of our traffic and usage which is multiple times that of the other sports leagues. That is partly the power of the NFL but it also reflects the quality of the website and that fans are enjoying the experience.

Do you have any plans on the interactive TV side of things?

Some of our plans aren't public yet but as part of our relationship with DirecTV there are certain elements of interactive TV. We've also experimented with our traditional network partners on two screen interactive TV applications such as ABC Enhanced TV that involved polling and other types of applications. So yes, we have experimented in the interactive TV world and there's certainly a bright future out there. It's unclear however whether that's a year away or 10 years away.

And what about wireless?

We've experimented with wireless content distribution of statistics, news and draft updates and fantasy football information. We've had a variety of partners in this. AT&T was a partner around Super Bowl last year - they were a half time sponsor and we did some games and polls with them. In other instances we haven't had a specific wireless distributor, instead we've made the content available to all of the services so we're still in the early stages of exploration in the area. Certainly we've seen the growth of that application in Europe in terms of content and communication beyond just telephony and we are exploring ways to further that here.

Do you have any special plans for the new season?

The big focus will be some new audio and video products we are planning to launch and we look at the new subscription services we are embarking on as great way to give fans more. There will be enhanced video and audio programming and more customisation of highlight reels. In the fantasy arena we are going to add additional content beyond just fantasy games, really just giving the fans all the tools they need to understand the players, the games and the moves even better. The enhanced content will be a big focus of what we do this year. Last year the big focus was increasing the analysis on the site and spending more time and space and real estate on great analysts giving fans extra insight. Not just reporting who won and lost but really giving fans a perspective of way certain moves had been made and what teams are likely to do in certain circumstances. That analysis was very popular with our fans and we are going to continue to do more of that too.

How much of your overall marketing budget is allocated to new media?

We certainly don't have a big cash budget devoted to new media marketing but we do have exposure in our games through the nature of the contracts with our broadcasters. You will hear mentions of NFL.com on our programming so we have very valuable promotion for what we are doing online but it isn't necessarily a cash outlay.

Finally, which technology in your opinion will have the biggest impact on the NFL in the future?

I think the biggest impact is going to be the ability of all sports providers to find new distribution outlets through video-on-demand and through digital cable. We're beginning to embark on that area with the new NFL Network that we'll be launching in the fall and that really is the biggest initiative in the whole of the new media space for us this year. The new platforms over time are going to give fans more choice and the ability to experience the content that they love. For sports leagues like the NFL, where there's such a passion for the game already, that's going to further deepen our fanbase and create some new business opportunities. Three years ago there were a lot of people who thought that the web was going to be this great distributor of video and it's only been a modest success in that regard. But a computer screen and a 2x2 box of video is not the ultimate experience although the concept is right. It's the ability on-demand to get exactly what you want that is important and its worked extremely well for news and information on the web but it has worked less well for audio and video. When those elements are brought to a television set and fans are going to get to watch the highlights they want when they want, the programmes they want when they want, that's going to be a tremendous experience for fans and a great business opportunity also.

Next month's Q& A will be with Brenda Spoonemore, vice president of interactive services in the National Basketball Associations's Entertainment Division

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