It's not that the ratings are so terrible. Last year, in fact, ratings improved quite nicely on the networks' NFL and major league baseball telecasts after stumbling for most of the '80s. ABC's Monday Night Football was the top-rated show in its time slot last season, and last month's Super Bowl drew the largest audience of any television program in history—120 million viewers.
Then why has the advertising demand fallen so? For one thing, the nation's TV viewing habits are changing in such a way that advertisers often feel they can reach their target audiences more efficiently by buying commercials on programming other than sports. Until quite recently, for instance, an overwhelming majority of automobiles were purchased by men, and carmakers advertised heavily on sports telecasts. Now car-buying decisions are made increasingly by women, who are more likely to watch Murder, She Wrote or Dan Rather. At the same time, brewing companies like Miller and Anheuser-Busch no longer need sports and only sports to reach beer-drinking men. They are now spending some of their advertising dollars on new alternatives such as MTV.
Another factor is the glut of sports on television. With the proliferation of cable TV and court rulings that have led to decentralization of college sports telecasts, there is wall-to-wall football, and so much basketball on the tube that the games seem to run together. With so many advertising options available, the networks often fail to sell all their commercial spots—or they are forced to sell at prices that are lower than those on their rate cards. The networks foresaw little of this and paid too much for the rights to sports events. Now they have to pay the piper.
One indication of the changing relationship between TV and sports came just before last Christmas when Jim Spence, then senior vice-president of ABC Sports, informed his new bosses at Cap Cities that he could land the NBA's TV rights for the next four years. Spence had all but worked out a deal with NBA commissioner David Stern—subject, of course, to Cap Cities' approval. ABC was prepared to throw in some pre-championship playoff games to be broadcast in prime time—a plum the NBA doesn't have in its current contract with CBS. In addition, ABC would double the current fee to about $44 million a year. Spence argued that with the increasingly popular NBA telecasts on the network schedule, ABC Sports would "turn the corner" and make a profit.
Cap Cities' response told more about the company's conservatism and the new order in sports TV than Spence or any of his colleagues at ABC could have possibly imagined.
"No, no, a thousand times no!" said the network's new owners. And the economics of the prospective deal wasn't all that concerned them. Chairman Thomas Murphy and president Daniel Burke felt that doubling the NBA rights fee would send the wrong message to the NFL, which is due to renegotiate its contract next year. "And furthermore," one Cap Cities exec said, "paying the NBA that much money will mean higher salaries for the players. And higher salaries will contribute to the drug problem in athletics today."
Since then other tremors have hit ABC. One registered a 6.8 on the Nielsen scale, which was ABC's hideously low prime-time rating on the Jan. 1 Sugar Bowl. On Jan. 27, Arledge was relieved of his day-to-day sports duties and left in charge only of the network's news division. Spence, an ABC Sports original and Arledge's second-in-command, was not even interviewed for the sports job and resigned Feb. 3. As president of the sports division, Cap Cities installed ex-sports-caster Swanson, 47, who most recently had headed the ABC-owned stations division. Clearly, Cap Cities will be calling all the shots through him and not in the same language the Arledge disciples at ABC Sports are used to hearing.
Cap Cities' message is that the balance sheet is more important than holding on to prestigious yet money-losing sports events. Thus, although Arledge made Monday Night Football an American institution. Cap Cities won't hesitate to sack it if it can fill Monday nights with more profitable programming.
Says Swanson, "We have to try to come to grips with what people who control these sporting events expect in return for our right to televise them. There are some difficult days ahead, some tough negotiations ahead."
Asked if ABC might abandon the NFL altogether in '87, once an unthinkable notion, Swanson adds, "That's something we're going to have to take a close look at."