Professional Leagues Are Drawing Up Game Plans as They Vie for Attention of Fans Visiting Sites on the Internet

Since the National Football League began moving its brand online, Commissioner Paul Tagliabue has invited some big-name players into his huddle. Early in October, for example, the league signed Yahoo to stream live game audiocasts and added EBay as its preferred online auction partner.

But, just as football coaches constantly tweak their rosters, there are no guarantees that the NFL won’t cut, trade or shift its partners as the league hones a long-term online strategy.

“The medium is changing very rapidly,” said Chris Russo, the league’s New York-based senior vice president for new media. “And we’re now in position to explore and execute the next phase of our Internet strategy.”

Executives at sports-oriented Web sites are scrambling to form online relationships with powerful allies, trying to keep pace with rapidly evolving technology, and juggling content and commerce to find the right blend that will lead to profitability.

Sports leagues also face stiff competition from outsiders. In August, only one of the top five sports Web sites--NFL.com--was a league site, according to Media Metrix. The others--ESPN, Sportsline.com, CNNSI.com and Sandbox.com--essentially compete with the leagues for fans’ time and money.

“Sports fans only have a finite amount of time in which to choose what sports to watch,” said Eric Scheirer, a media and entertainment analyst with Forrester Research. “So, just as the NFL’s Patriots and Jets compete, and the NBA’s Lakers and Knicks compete, there’s also competition between sports sites.”

Despite all the talk of broadband, convergence and wireless devices, few league executives claim to know how the ultimate online experience will look.

“I don’t think anybody knows the answer to that one yet,” Tagliabue said. “We’ve done live games [online] in Singapore and Amsterdam, but those have been more of an experiment. And, at present, we’ve got broadcast contracts in place through 2005. So I don’t think we’ll see mass use of broadband in that time frame.”

League executives might lack a clear view of the goal line, but they know the danger of remaining on the sidelines. Fans already are forming allegiances to Web sites deemed friendly, authentic and entertaining. Jupiter Communications predicts online spending by sports fans for tickets, sporting goods and apparel will hit $3 billion by 2003.

“Right now, [NFL.com] is not a profit center, and there aren’t too many companies making money yet in this space,” said Tagliabue, who traveled to California this month to complete the Yahoo and EBay deals. “What we’re really trying to do is find out what fans want and develop the technology needed to make those applications work.”

Leagues are learning from experience what clicks with fans. The NFL in August added a fantasy-league option that already has drawn more than 300,000 members. “Fantasy leagues are an especially sticky application,” Russo said. “And when you have fans playing the game, they’re also accessing news and statistics. It’s one of the most successful initiatives we’ve had this year.”

“Four years ago, some of the leagues were fighting against fantasy leagues,” said Chuck Mitchell, senior vice president of business development for Mass Hysteria, a San Diego-based company that develops interactive packages for the NBA and other clients. “But now they realize it as a premium opportunity for monetizing their assets.”

Online traffic at sports sites remains paltry by broadcast and cable television standards, as do online revenue streams and profits. About 2.6 million Americans surfed NBCOlympics.com during the Games, but an estimated 3.9 billion viewers worldwide watched television coverage of the Olympics.

Despite the relatively small number of online fans, leagues and organizations know it makes economic sense to put sports content--including games, star players, branded merchandise and statistics--online.

The issues in play were underscored when the Sydney Games’ organizers decided to showcase Olympic action on official Web sites rather than licensing it to other sites for a fee. The strategy did drive traffic to official Olympic sites, but evidence suggests that a broader distribution policy would have sparked wider fan interest online.

“One of the fundamental questions leagues have to process is if they’re going to be retailers, wholesalers or some hybrid,” said Geoff Reiss, senior vice president of programming for ESPN Internet Group. “When it comes to TV, sports has largely been a wholesaler--and networks like Fox and NBC have been the retailers. Online, leagues are slowly determining what role they want to play in the [content] food chain.”

Leagues are trying to solve a complex equation. Baseball, for example, plays 162 games before heading into a lengthy postseason schedule. In contrast, NFL teams play once a week and the short postseason schedule culminates in a winner-take-all Super Bowl. Sports marketers say leagues must craft online strategies that accommodate those differences.

Leagues also have different operating philosophies that shape how team Web sites interact with the league’s online presence. Baseball has long been a decentralized sport that gives franchise owners considerable power. NFL owners--with the exception of independent-minded Dallas Cowboys owner Jerry Jones--typically march in step.

Leagues don’t operate in vacuums. As online operations take shape, owners must deal with demands from players, corporate sponsors, broadcast partners and others with a financial interest.

Sports leagues also are realizing that such competitors as ESPN--which helped the NFL, NBA and NASCAR open their Web sites in the 1990s--might also be allies. The NBA recently took over production of its Web site, but continues to swap content with ESPN’s broadcast and Internet arms.

“We all want to figure out the most productive and effective ways to work together to maximize the value of online assets,” said Doug Allen, president of the NFL Players Assn.’s business and licensing arm. “It’s clear that the Internet crosses lots of dividing lines and we need to work together to figure out how to exploit it.”

Such complex alliances are a far cry from the early online days in the sporting world. “Go back to 1996 and NASCAR.com was, in effect, an extension of our PR department,” acknowledged NASCAR spokesman John Griffin. “We’ve been stunned by the transformation over the years.”

NASCAR made news this month by signing Turner Sports as the exclusive producer of its online operations. The site will continue to highlight feature material prepared by NASCAR--along with a treasure trove of memorabilia.

But NASCAR also plans to address a commonly perceived fault--that league-operated sites ignore potentially bad news and gossip--by turning over substantial control of the Web site’s news operation to Turner.

Industry observers set the combined value of NASCAR’s online deals with Turner Sports and AOL at $100 million. The figure includes hard-to-quantify marketing benefits, but the figure provides a benchmark for upcoming deals--including the NFL, whose contract with ESPN expires after next April’s player draft.

A few years ago, “little or no money exchanged hands, or it was a barter deal with services being traded,” Scheirer said. “What’s happening now is that the stage is being set for some years down the line when real negotiations over [the value of] Internet rights are held.”

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Sideline Competition

Sports fans--including fantasy league players--are hungry for information about their favorite franchises and players that traditional media don’t offer. Fans are visiting officially sanctioned league sites, but, as the lsit of top 10 sites in August shows, they’re also forming allegiances to independent sites.

Top 10 Sports Web Sites

Number of visitors in August, in millions

ESPN: 6.27

SportsLine.com: 5.36

NFL.com: 2.62

CNNSI.com: 2.49

Sandbox.com: 1.72

NASCAR.com: 1.40

MajorLeagueBaseball.com: 1.39

SportingNews.com: 1.13

FoxSports.com: 1.10

Fansonly.com: 1.07

Source: Media Metrix