Ogden Mills Phipps: Thoroughbred racing and ESPN have a long history together. As D.G. mentioned, the Breeders' Cup - following in the footsteps of the NFL's Monday Night Football package - will move to a new home at ESPN next year.
On hand today to tell us more about some changes in the world of sports television, about the ESPN brand, and about the network's future plans in the promotion and programming of horse racing, is Mark Shapiro.
Mark joined ESPN as a production assistant in 1993 and has served in a variety of executive capacities with various divisions of the company for the past 12 years. ESPN, ESPN Classic and ESPN Original Entertainment have all thrived and won numerous awards under his guidance. In 2002, he was named executive vice president of programming and production, where he's responsible for the development, acquisition, and scheduling of all programming for the ESPN family of domestic networks and international entities. He currently oversees ABC Sports as well.
Mark graduated from the University of Iowa with degrees in political science and communications.
Although he is not much older than ESPN itself, he is widely considered one of the most prominent and creative executives in the entertainment business today.
In fact, as many of you may have read, it was announced this week that Mark will be leaving ESPN on October 1 to become CEO of Red Zone, LLC, a private investment company focused on a range of entertainment properties.
We are delighted to have you here today.
Mark Shapiro: Thank you, Dinny, for that very kind introduction.
First, I would say to you that it doesn't take a lot to get me here to Saratoga. In 1997, I was a proud part-owner of Deputy Commander, as Chris McCarron took us to a win in the Travers Stakes. And then in 2003, I was a proud part owner of Deputy Commander's offspring, Ten Most Wanted, that took us to our second win in the Travers Stakes. So it doesn't take a lot to get me here, but I am nevertheless honored to speak to you today.
At ABC Sports and ESPN, we are proud to offer the most comprehensive and extensive coverage of Thoroughbred racing in the entire sports industry. And there's a reason why we went out and acquired and were desirous of the Belmont Stakes with Steven [Duncker] and his team. And there's a reason why we were desirous of the Breeders' Cup and obtaining a partnership with D.G. [Van Clief] and his team. And there's a reason why we produce and air over 140 hours of horseracing coverage on ESPN and ABC Sports.
And the reason is that horseracing - Thoroughbred racing - is growing. Imagine that - growing. And D.G. just touched on that.
In the 1920s - the roaring '20s, the Golden Age of Sports - the trifecta of sports - boxing, baseball and horseracing - yet horseracing is growing. How is that?
Well, as D.G. mentioned with that slide, according to the latest ESPN poll, year-over-year fan interest is up five percent, the most of any sport. In fact, fan interest is up five straight years. Horseracing is now in the top 10; it's climbed its way into the top 10 of all sports with regard to fan interest.
So you're already contemporary and you're growing, yet you have a history that's second to none - second to none: 1863 here just in Saratoga and I think in 1864 you had the first Travers Stakes. So you have the equity, you have the history base and now you're growing. Young people are catching on. That's a great story. That's a powerful combination, a powerful recipe for success.
Here's the reason I believe the sport of Thoroughbred racing wanted ESPN and ABC Sports.
When asked to name their favorite network for watching sports, that same ESPN-Chilton poll we mentioned earlier, more people said ABC Sports and ESPN than any other network. In fact, 60 percent of the sports viewing done in this country - 60 percent - is either on ABC or ESPN. Ninety-seven million people a week - 97 million - come into contact or connect with the ESPN brand.
Now they might be reading the magazine. They might be watching television. They might be listening on radio. They might be surfing the web. They might be eating a hamburger at one of our ESPN Zone restaurants. But that's power - 97 million people touching ESPN. Influence the information that's bestowed upon people. Tell them something is important and they catch it. They believe it.
The good news is 26 million more sports fans are watching, are participating, in sports than they were five years ago. There are 26 million more sports fans today than there were five years ago. But let's remember, fans' habits are changing. That's where the lesson lies for all of us moving forward. And we must - you as an industry, you must - keep up.
Players in our industry need to have multiple assets to be in the game. In this sea of choice, brands - brand strength - counts greatly. The competition is fierce. There are over 40 national networks that air in some way, shape, or form, sports every single day. There are 30 regional networks airing and televising sports every single day. Leagues now have their own channels. Our partners actually have become our competitors, you might say. Digital, wireless, radio, HD, broadband, Spanish language networks - competition everywhere you look.
Forty million homes have PCs and televisions in the same room. There are 180 million cell phone users in North America alone. And it's no surprise that sports news and information are among the top five non-voice applications. So people are going to their cell phones to watch video or get information.
Fifty five percent of these men multi-task. They're using their PCs and their television at the same time.
Video games. It's not just young people playing anymore. Everyone's playing video games. In fact, the sweet spot - the demographic for video games - happens to be the 30-to-45 age range. That's who's playing video games.
Music. It's all emerging. It's all combining. It's all becoming one, if you will.
And, of course, gaming has taken off. Look at poker. One of the secret successes - even though they don't like to talk about it in the NFL - is gaming, and all the betting that's done on Sunday and Monday nights. Don't run from gaming. You have it. Don't be embarrassed by it. It's in your palm. You control it. That's a good story for you. Look at the poker phenomenon.
All these spaces, the bottom line is: you have to be there. You have to be in these spaces. And you have to align yourself with partners that are in these spaces. You have to be culturally relevant.
Today it's about brand building. In that sea of choice that I talked about, you must be a beacon. We face challenges together: challenges in the handle, challenges on ratings, challenges on attendance. We can't embrace, we can't emerge, we can't set ourselves apart unless we work together. That's a familiar theme I heard today. Everybody talking about the factions and the self interests. Well you know what? It can't be self interest. It has to be about self sacrifice. That's what this industry has to realize.
You don't have revenue sharing like most of the leagues. You don't have revenue sharing like the NFL. And of course, the NFL owners, they all have their own interests and they're all arguing and fighting and tearing each other apart for this or that but at the end of the day, they revenue share. So they're forced to work together. You don't have that. You have to do it on your own.
We can't appear divided in this industry. We have to make the schedule easier to understand. Yes, everyone knows the Triple Crown and, yes, everyone knows the Road to the World Thoroughbred Championships - the Breeders' Cup. Everybody knows that. But sports fans are used to something simple - regular season, playoffs, championship.
We have to make the schedule easier. We have to build stars for the greater good. That's the most important thing you can do moving forward. All everyone cares about - all the fans care about, all the families care about, all the consumers care about - is the human element, the human story.
Bottom line - horses come and go. Sure we love them and we're close to them, but maybe too close. It's the human element that we need to market more. It's the trainers. It's the owners. It's the jockeys. It's the husbands and wives of the owners, trainers and jockeys. It's not Afleet Alex the horse, as much as we want it to be. It's Alex. It's Penny Chenery. Those are the images we remember beyond the horses. They have a longer life span is you will. We need to get behind those personalities.
Think Danica Patrick. You want to talk about a sport that was dying, that's the IRL - and I can say this because Tony George is a good friend of mine and Indy Racing is a sport that just signed a new deal on ESPN. And we're banging our heads thinking about how can we get it back to where it was because NASCAR took the void. NASCAR ceded that space. How can we get it back?
Low and behold, Danica Patrick came along. We didn't advertise. We didn't market around her. It was done for us. The newspapers starting writing: A woman is fourth in the pole qualifying; A woman is going to race in the Indy 500; A woman could win the Indy 500.
She was on every sports page. She was in every newspaper. Every media outlet was picking her up - the Internet, the local television channels. Ratings were up 60 percent for the Indy 500 - 60 percent. And since then, every race beyond that, ratings are up 40 percent.
When you catch lightning in a bottle, you've got to figure out how to multiply, how to make millions and millions of bottles. How can you market? How can you get beyond it? How can you pique the consumer interest? How can you pique their curiosity and how can you keep them? That's the most important thing.
Smarty Jones - you're going to have him but then he might go away. But what about the people around Smarty Jones? That's what we have to embrace in horseracing. We need a rooting interest and we must work together - and that goes for NBC Sports, ESPN and ABC as well. It doesn't matter that the properties are divided. We have to work together. We have to meet together. We have to be one because it's in our collective interest to take horseracing to unprecedented levels.
Think about it. Eighty-five percent of the handle these days is off-track. That is so scary. Eighty-five percent of the handle is off-track, meaning your not touching 85% of your core base. They're not coming out for that communal experience. They're not coming out for that American tradition of going to the track. They're away. They're disconnected. We have to reach harder to get to them.
The OTB in New York, specifically - I walked into a couple of them this past week just to get a feel, just to observe if you will. Think about it. They're separately owned and managed. There are no operating efficiencies. There are no marketing synergies. They're competitive. In a way, they're dysfunctional. There's no harmony. That's scary because that's where your consumer - that's where your audience - is going instead of the track.
We need to cut through. We need the light fans. We need the lapsed fans. We need the social fans. We need the inactive fans. We need to get past the core fans in order to build your brand and extend your business.
We need currency, and it can be done. It was done with Danica Patrick. It was done with Michael Jordan. Think of what the NBA is today. Think of what it was prior to Michael Jordan. They got a star. They got a human interest story. They got somebody they could build around and they blew it up. And everybody - white, black, Hispanic, young, old - gender-blind, that's what it became. Race-blind, religion-blind - everybody went after this phenomenal compelling product. Everybody wanted to witness it. That's what's happening with Danica.
The U.S. Open Series is the same exact thing. Tennis was a dying sport. We carried the Australian Open - we carried about 60 hours of tennis a year on ESPN. We decided, we think there can be growth. We're going to get behind it. We're going to use all of our marketing platforms - broadband as D.G. mentioned, magazine, the Internet, our television networks, radio, ABC Sports, our restaurants, ESPN The Zone, our phones which are coming out, ESPN Mobile - we're going to use every platform we have - ESPN Deportes a new Spanish language network - ESPN HD, we're going to give you a better experience than you've ever had when you watch tennis. We're going to really get behind it.
We teamed up with Arlen Kantarian at the U.S. Open and he said, "In order to make my U.S. Open bigger, I have to create a regular season. That's my goal."
So he went out and he talked to the 10 tournaments in between Wimbledon and the U.S. Open - most of those tournaments take place in the U.S. and Canada - and he said, "Look, you have 10 tournaments. I'm not going to change anything. I'm just going to create an umbrella brand. I'm going to call it the U.S. Open Series and I'm going to market it like that. And if you on site call it the U.S. Open Series, we can build some attention for it."
So the events didn't change. They were 10 events that were already taking place in places like Cincinnati and Washington, D.C. But he came up with an umbrella brand and he changed the color of the courts to get some buzz. And he came up with a points system and a money system that people could understand so that the players themselves were playing for something. If they win the U.S. Open Series, they get an extra bonus if they win the U.S. Open itself. So he was building momentum. He was building suspense. He was building a following and ratings are up 30 percent two years in a row. They were up 30 percent last year and now they're up 30 percent over last year. And all he really did was do it with bells and whistles, smoke and mirrors. Nothing has changed. It's the same event. But he's got an umbrella brand for it. That's a vision!
Dinny mentioned that I'll be leaving ESPN and ABC Sports on October 1 to go work with Dan Snyder in his private investment firm that's going to be buying a collection of entertainment assets. But, of course, the headline asset is Six Flags, which is a collection of 30 theme parks across the country. There's one in Canada and one in Mexico, but 28 of the parks are in America and we're looking to have an operating stake in Six Flags because we see it as a dying brand. We see it as something that can be re-branded, re-born if you will.
People said to me, a lot of people last night at the dinner at the Hall of Fame, said, "Why Six Flags? Why are you going there? Why do you want that? What a dream job you have, why are you leaving?"
And I think there are a lot of parallels between Six Flags and ESPN and also horseracing - Thoroughbred racing - and what you're trying to do. And that's the fact that we're all in the emotional transportation business. Think about that. We're all in the emotional transportation business. We want people to come out to the tracks and experience entertainment, experience a diversion, experience a getaway, experience a family-doing if you will with your son or your daughter, a bonding opportunity to get away from the travails and the tribulations and the hurdles of everyday life.
We want to take a breath. We want to enjoy. There's nothing better than getting out to the track and the fresh air and something so pure as a horse and watching him race around the track and cheer - or sad. There's some kind of emotional response that's elicited every time you go the track.
You might be crying because you just lost everything in your pocket. You might be winning because all of a sudden your pockets are full. You might be cheering because your wife or your husband told you that's the horse to go with because I just like the number or I like the name of the jockey or I like the color on the back or I like the way the horse looks - that horse looks strong. But you get together. It's the best. And you break it down into its core it's a communal experience at its best. It's a family experience at its best.
So as I leave ESPN where our goal - our mission - is to increase ratings. That was our goal. It's the same business. We're trying to increase attendance if we're so lucky to operate Six Flags, which is what you're trying to do. You're in the ratings business too. It's just called attendance.
You want to surround yourself with the right strategic partners that can project a strong - an extraordinarily strong - positive image on you, and D.G. illustrated many of the ones you've gone after.
I remember reading this article in Forbes a few years ago about Michael Jordan, and his agent said, "You're in the brand transformation business."
Jordan said, "Brand transformation. What are you talking about?"
You want to surround yourself with brands that signify and can be defined as a slice of Americana because if you surround yourself with the right brands, they'll project a good image on you. And you have many of those partners.
Jordan went out and his first deal: McDonalds. What's more American than McDonalds? His second deal: Chevrolet - American cars, Chevrolet, American tough. Those partnerships, those strategic alliances that can help you enhance your brand, is the business you need to be in.
The customer experience, building value - that's what we do at ESPN every single day - we want to build value for our affiliates; we want to build value for our fans; we want to build value for our advertisers. That's the business you're in as well.
It all comes down to brand building. You want to have a strong brand because if you have a strong brand you can be anywhere. Who would've ever thought ESPN would be launching a phone? ESPN would be launching a magazine? ESPN would be launching restaurants? ESPN would be launching new networks? ESPN would have original programming with movies and scripted dramas? If you have a strong brand you can stretch that brand out. You just have to figure out what you want to be.
At ESPN, we want to be the worldwide leader in sports. That's what we want to be. If we're so lucky to operate Six Flags, the brand mission would be clean, safe fun. That's the brand message - clean, safe fun.
When I look at Thoroughbred racing, I say, "What brand message is best for them to say?" And it's just organic. It's right there before your eyes. It's at your fingertips. You can feel it. You can touch it. You can smell it. It's a day at the races. That's what it is. Break it down to its core, it's a day at the races.
The good news is you have both. You have what I've outlined for ESPN and what I've outlined for Six Flags. You have both. You have a compelling product. You have a great sport. And you have a family experience. Both.
So if you get behind that - if you think Go Baby Go - you want to go with your compelling product and scream as loud as you can and show people your compelling product. You want to go with family. You want to go with Americana. If you go with all that, you will win.
Thank you. I appreciate you having me here today.