Those Guys Have All the Fun - James Andrew Miller [41]
And so it came to pass, on September 1, 1980, that ESPN began broadcasting 24/7, finally making good on Rasmussen’s pledge. Simmons remained unhappy about having to fill up acres of additional airtime. As was so often the case, money was more than incidental to his gloom. More hours would mean more programming and higher labor costs.
For his part, Evey was achingly aware of all the Getty dollars going, going, gone with the wind—$1.5 million a month, after deducting minuscule revenues, just to keep the lights burning and the satellite dishes turned on, and this was in addition to the $35 million Getty had already invested. “Revenues” were ad dollars, but even at a modest selling price of $1,000 per thirty seconds, half of ESPN’s available ad time went unsold. (While ESPN was charging advertisers pennies, the established broadcast networks were getting $50,000 for the same thirty seconds of ad time on sports shows, and $300,000 for events like the Super Bowl.)
Chet Simmons turned to his friend Mike Traeger for life-support money, and Traeger turned to an old friend and benefactor of ESPN’s, Anheuser-Busch, the ever-booming Bud brewer who’d been ESPN’s first real big-time sponsor. Together, Simmons and Traeger skillfully negotiated a $25 million deal over five years that granted, among other things, brand-name exclusivity to Anheuser-Busch, making it the only beer bottler whose commercials would be seen on the network for the duration of the contract. Michael J. Roarty, Anheuser-Busch’s marketing VP, proclaimed, “This is the largest sponsorship commitment in the history of America’s budding cable television industry.” In a cable universe now seventeen million viewers strong, ESPN’s audience, Simmons said, had gone from a piddling 1.5 million subscribers to more than 6 million in just over a year.
Simmons ballyhooed as “awesome” a cable advertiser’s ability to target its “key audience” via ESPN, as exemplified by the Anheuser-Busch deal—“especially,” he said, “if you realize how sports can reach beer drinkers.” Roarty added, “This new multiyear package is different; we know what ESPN can do—deliver the people we need to reach.”
Evey was thrilled. ”It’s an endorsement, really, a complete endorsement,” he proclaimed. ESPN, now a flag-bearer for the whole cable industry, capitalized on the good news. Simmons noted that ESPN would sell between $6 million and $7 million in advertising during the year. While not nearly enough to cover the network’s costs, it was an impressive figure considering that all of cable television had sold only $7 million in ads the year before.
Among other companies purchasing ads on ESPN: Hertz, Pontiac, Subaru, Mobil, Sears, and Magnavox. Not surprisingly, Getty Oil had bought time too—and so, in this election year, had Ronald Reagan’s campaign, even though ESPN would be running tape of an old Michigan-Indiana football game on Election Night, when most other networks would be feverishly reporting results.
BOB GUTKOWSKI:
The Busch deal absolutely saved ESPN. It was a lifesaver. But even that deal became a problem after a while. As ESPN started to gain traction, the exclusivity was too restrictive. If ESPN was really going to become a viable entity, it had to have other beer companies. Eventually they had to change it.
According to ESPN’s original business plan—to use the term “plan” rather loosely—the all-sports network was expected to break even in its second year of operation, and to be pleasantly profitable, with around five million satisfied subscribers, by its third or fourth year. Getty’s cumulative investment in the business—to get it to the break-even point—was supposed to top out at $25 million, but Evey and his crew had gone through $25 million in just their first seven months of operation. No longer comfortable trusting the Rasmussen