It was a spectacular early morning in the desert when CBS executive Neal Pilson first expounded the Gospel According To Pilson. He spoke at a press conference at the Arizona Biltmore in Phoenix. Across from him was a wall of windows that looked out onto sun-dappled lawns. But his speech that morning, June 8, 1984, was anything but serene. What he told the assembled group of TV journalists was that the industry is in some difficulty and that he was about to propose a brave—and seemingly gloomy—new world.
And exactly what was the problem? Well, low ratings, for one. Take pro football. Down in 1983 and down again in 1984. During the regular '84 season, ABC was off 6%, CBS 16% and NBC 4% from 1983, which wasn't considered a good year. But pro football is only the tip of the iceberg. Over the past three years, since the banner season of '81, a kind of dry rot has set in for all major sports except pro basketball.
The trends over five years are unmistakable. Boxing is down 49% on the networks. College hoops are off 21%, bowling 27%, tennis 26%, and college football 17%. Baseball is off 20%, but that decrease could easily have been larger. The summer game actually went up 10% last year, but the rise was attributable to NBC's Game of the Week, which, for the first time, was without TV baseball competition on the local level.
The great march downward in the ratings has also affected the blue-chip events. From 1979 to '84, only the Super Bowl remained stable. The World Series, the NCAA basketball final, the four major New Year's Day bowls, the Indy 500, the Masters, the Derby, Wimbledon—every last one of them was down.
As a result, Pilson told major league sports last spring, the party will soon be over. No longer, he said, will the networks keep paying ever-increasing fees for sporting events. Oh, there may be moderate increases in the future. And the networks surely won't desert sports entirely. But teams should not sign blockbuster labor deals, stadium contracts or player salaries and expect the networks to keep paying the freight.
Pilson, executive vice-president of the CBS Broadcast Group and until last December the man in charge of CBS Sports, has been harping on this theme of late. For the leagues, players, owners, agents, conferences and universities, it's bad news ahead. For the fans, it's a mixed blessing. If the money spiral levels off, we'll read less about multimillion-dollar contracts, player strikes and lawsuits. But with less revenue, some of our leagues and teams may well go bottom up.
Before handing over sports to Peter Lund on Dec. 11, Pilson, 44, was the least senior of the three network sports chiefs and the one least wedded to the past. It's interesting that Pilson was the first to spell out how the double-edged problem of depressed ratings and ad revenues will inevitably be passed along to the leagues. NBC Sports president Arthur Watson was the first exec to complain about the overexposure of sports. "What has happened is really quite simple," he said. "Supply has quickly outstripped demand." Even Fred Pierce, president of ABC, chimed in, saying Olympic rights fees for Seoul in 1988 could go lower than once expected.
But it was Pilson who rang the fire bell. Why? "Oh, he's trying to get a cheap deal during the next NFL negotiations. He wants to keep the NFL for as little as he can," says Gene Upshaw, executive director of the NFL Players Association. "If I were in his position, I'd be saying the same things." In all candor, though, Pilson's pronouncements are not entirely crass. At stake here is the very heart of the sports-TV marriage.
Pilson's concern over rights fees probably began in the spring of '82. It was then that the three networks signed a five-year, $2 billion contract with the NFL—a 245% annual increase over the previous four-year deal. Subsequently, NBC and ABC anted up $1.1 billion over six years for major league baseball (an $810 million increase over the previous four-year contract). ABC bought the 1988 Winter Olympics for $309 million. Meanwhile, the so-called TV "beer wars" between Miller and Budweiser ended, and the ratings began their tumble.
To Pilson, the baseball and Olympic deals didn't make sense. Why pay so much more, Pilson asks, when there's no guarantee the audience will be greater? Higher fees mean higher rate cards, and sponsors already have been resisting. In 1984, for example, they were able to buy NFL ads at roughly two-thirds the price the network originally wanted.