NMT feels credit crunch; closes Dallas office, cuts staff in preparation for sale
By Ken Kerschbaumer
The sports production community is beginning to feel the pinch of the credit crisis as National Mobile Television, one of the nation’s largest remote production vendors with a fleet of more than 20 trucks, took drastic steps to improve its chances of being sold or recapitalized. “We aren’t closing the doors and walking away,” says Frank Coll, NMT SVP of operations.
NMT closed its office in Dallas, retired its fleet of analog trucks, reduced headcount from 225 to 205 employees and shifted CEO Mark Howorth’s role away from day-to-day operations and towards helping market the company for sale or recapitalization. The company has also delayed the building of HD14 until a long-term contract is obtained.
“We understand that these changes will have an impact on our entire company and will also resonate through the industry, but they are necessary for our continued success,” the NMT executive management team said in a memo to employees. “We feel these changes will create a stronger company that will allow us to move forward and become one of the premiere and most profitable companies in the industry.”
Coll, who will handle NMT operations and scheduling, says customers like CBS Sports, Comcast Sportsnet Bay Area, SNY, and MSG can expect the same professional manner and commitment they have experienced in the past as NMT goes through a sales or recapitalization process that could last up to 90 days. “The transition will be seamless to them,” says Coll.
With respect to the analog fleet Coll says they were billing about five events a month. “The utilization rates were too low and they weren’t earning their keep,” he says. “There just isn’t a huge market for analog trucks.”
The company’s difficulties reflect an economic and business climate that has made it increasingly difficult for remote production companies to find sustainable margins. The transition to HD has only increased that challenge, according to numerous executives in the remote production community, as the trucks become more expensive and, potentially, money pits. And the demand to undertake multi-million dollar upgrades to those same vehicles within two or three years of hitting the road to keep existing clients on board makes the situation more difficult.
“It takes up to $8 million to build an HD truck for national network level events and you can hopefully get 80% of that financed,” he says. “But the credit industry is no longer giving money on speculation. You need a five-year contract and have to show that it will be booked for 150 events a year to get financing.”
That, he adds, is why construction on HD14 is on hold. The truck has a commitment from ESPN for college football and some other events but after NMT shopped it to other clients for use during the rest of the year nothing materialized.
It also means NMT will no longer run a truck all around the country for spot business. “We’ll do spot events where it makes sense,” says Coll.
Rick Abbott, ESPN vice president, remote operations, says ESPN is hopeful HD14 will still materialize. “Any time a vendor has a problem it hurts the entire industry,” he says. “And while everyone is competing like crazy when one of our brethren takes a hit it’s important to help out. We’ll do what we can to help our friends at NMT.”
Ryan Hatch, NMT general manager of Gulf Coast Operations, will now head up NMT sales efforts with Dave Cooper remaining on board on a contractual basis. Cooper will be tasked with selling excess equipment inventory and the analog mobile units.