Sports Industry Waits to See Impact of Financial Turmoil on Future Builds, Move to HD
By Carl Lindemann
Anxiety over what some are calling a “Financial 9/11” has swept through businesses everywhere and in every sector of the economy. What does this mean for the sports mobile production industry? First the good news: sports TV is a proven performer in both good times and bad.
“In bad times, people watch more TV. That’s a proven fact going back to the dawn of TV,” says Lou Borrelli, CEO of NEP Broadcasting. “If you accept that premise and extend it to broadcast sports, we could be in a much worse position. Still, I don’t think we’ll get off scot-free.”
He sees possible wide-ranging effects from the financial turbulence ahead, with unexpected consequences. What happens when broadcasters’ ad revenues take a hit? What about PGA events sponsored by many of the financial-services and insurance companies at the center of the crisis?
The full ramifications are unclear, but one aspect is all too apparent. The core issue for the continued growth of HD in mobile production is credit: how available is it, and how much will it cost?
“We are all caught with a massive, insatiable need for capital,” says Frank Coll, National Mobile Television, SVP, Operations. “We need to increase HD capacity to meet demand, and that takes enormous capital, capital that is drying up. You’ve got a marketplace wanting more and more HD, and we can’t deliver it if we have no capital to create increased capacity.”
Lack of credit for HD builds, for example, could force mid-market clients eager for HD to accept 16:9 SD upconverts to fill the shortfall. Extending the life” and value” of the SD truck fleet could prove to be a light in the darkness.
However, the possibility that SD production will undergo resurgence across the board seems as unlikely as a complete credit collapse. More likely is that some will advance with new HD units, while others will be held back. Getting a green light from a bank in the current climate” which is subject to change on an hourly basis” means meeting more-stringent standards and connecting with the right lending institutions.
“You need to have a good track record, contracts in hand [from clients], and be working with solid banks that have a strong balance sheet and no exposure to subprime lending,” says Game Creek Video president Pat Sullivan.
He sees that last factor as hit or miss. Some banks he has done business with are thriving while others can’t consider investing in even a burgeoning business.
For smaller outfits, the need to have client contracts for a significant number of events in hand may be problematic. “The big guys get contracts,” explains Sure Shot Transmission President Denny Kunce. “I have relationships with clients that say we’ll use it if you build it.”
So far, that has been enough to allow a great deal of HD production capacity to get financed on spec. But those days are likely over. How will this shape the ongoing transition to HD? For now, questions outnumber answers, and uncertainty is all that is certain.