Steve Bornstein’s NFL Gospel

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1:05Congratulations! You made the Varsity, the podcast. My name is John Arand and I am Puck's sports correspondent and the host of this pod. And today, our guest is someone who I've covered for the past 30 years. Steve Bornstein ran ESPN back in the 1990s and oversaw a tremendous amount of growth. Most of it centered around deals that he did with the NFL. Eventually, Paul Tagliabue hired Steve to negotiate these deals on behalf of the league. So we're going to talk a lot about Tagliabue's legacy. Of course, the former NFL commissioner died on Sunday, and Steve knew him very, very well. The thing about Steve Bornstein is he's an absolute legend in the sports business, and I really want to hear his thoughts on the state of sports media as we move forward.

1:52But before we get to Steve, today is Wednesday, November 12th, and here's what I'm watching. And for me, it's all about the Big Ten Conference, which is looking to secure$2.5 billion worth of private financing without the support from two of its biggest schools. You see, USC and Michigan don't support the idea of selling 10 % of a new for-profit entity to UC Investments. That's a fund associated with the University of California pension system. But the conference commissioner, Tony Petitti, and the rest of the Big Ten, they want to move on with this plan, even without the support of USC and Michigan.

2:31And it appears to me that Tony Petitti is trying to strong arm those two schools into accepting this deal. And according to the Yahoo's Ross Dellinger, the Big Ten is planning to vote on this plan within the next two weeks. Now, the plan has each school getting$135 million up front. And reportedly, the schools that don't agree to this deal, like Michigan and USC, they face the possibility of losing out on some of that money, of course, and possibly risk getting kicked out of the conference altogether, which is a particularly toothless threat to me. The Big Ten's current media deal ends in 2030, and there's really no way that any media company is going to pony up as much money for Big Ten rights that don't include USC and Michigan.

3:21The Big Ten clearly needs those two schools. Already, I've heard a ton of complaints about the lack of depth in Big Ten college football. This coming Saturday, NBC carries an Ohio State-UCLA game where the Buckeyes are favored by four touchdowns, and that's on network TV. Just last week, CBS was saddled with showing Indiana's 45-point win against Maryland. There aren't a lot of good games to pick from, and the networks are figuring that out. The truth is that this dispute illuminates just how fractured college sports are. Not just the overall business of college sports, but within the conferences too.

4:03On Michigan, the school isn't withholding its support on moral grounds or due to the higher calling of academics. Rather, Michigan just doesn't want to support what it considers corporate welfare for some of the less marquee schools in the conference. It's more proof that in the NIL era, capitalism is alive and well. Okay, let's get to Steve Bornstein. Steve Bornstein, I mentioned in the intro about you're negotiating with Paul Tagliabue through the 90s. You're going over to work for Paul at the NFL in the early 2000s. Do you recall the first time that you met Paul Tagliabue? Was that memorable?

4:48Well, the first time I met Paul was after he succeeded Pete as the commissioner of the National Football League. The first real business I conducted with Paul Tagliabue would have been our 1994 renewal of ESPN, Sunday night, second half Sunday night. We were able to negotiate that deal early and so avoided the kind of auction dynamics that happened later on in that deal between CBS and Fox. But the main exposure I had to Paul, frankly, was in the subsequent years to that deal prior to 1998 when we renewed Monday night. I was both the president of ESPN and ABC Sports at that time. We were able to renew Monday Night Football for ABC and get a full season of NFL programming on Sunday night for ESPN, which was a cornerstone in our ability to drive rate increases on ESPN.

5:49So that was a seminal deal in my own career, getting the full season of NFL. And Paul was the primary person that we dealt with during that time period. What did he see in the way you negotiated? And what did you see in the way that he negotiated that you both decided to go in business together just a couple of years later? Well, Paul was what is and was the smartest guy that I ever worked for. I don't think people actually give him the credit that he deserves. He was just an intellectually curious person, you know, beyond sports. I mean, he was very well versed in a bunch of different humanities and different interests.

6:33And whatever he was, when he had an opinion about something, he was always well informed. So Paul and I, you know, when I got fired by Disney, the first guy that reached out to me was Paul Tagliabue. So he and I, I think, always had a fair amount of mutual respect for each other. I certainly for him. and I find him to be, as I said, if it wasn't for him and Pat Bowen and Robert Kraft and Roger Goodell, I would have gone to the NFL. It was a pretty unlikely move for me at that point in my career to go to a league when I was a pretty sought-after media executive. But because of him and the others I just mentioned, it was a pretty easy decision and one that I'm pleased I made.

7:19Take me through when they reached out to you. Tell me the story about how they convinced you to come over to the league. Well, it was a combination of things. And Paul and Roger were two of the key, obviously, staff guys that were leading the recruitment. But it was an opportunity to actually have a fair amount of flexibility and freedom to do things that they hadn't normally done. They typically were a licensing business, and I thought that they had an opportunity to actually own and operate assets. They thought that was probably a smart approach, and they gave me great leeway to go do it. So it was, at the end of the day, I had a lot of really compelling opportunities.

8:07and it was the one that made the most sense to me and I have never regretted it. It has been a great career move for me and I think I made a positive contribution to the NFL. I mean, the NFL would have been great without me. I just think they didn't need me to be great. They had all the elements of it, but I think I helped at least expedite some of the stuff they did. Would they have launched their own network without you? Or did that come from you? It wouldn't have been successful. We can all agree on that, Steve. Let me tell you this. They had the idea of launching a network long before they came up with it, before they found me.

8:46I think I helped give them the confidence that we could pull it off. But, yeah, they would have done all this without me, for sure. I want to ask you about Tagliabue's legacy. And not sort of an overall legacy, but his legacy with you. Like when you think of Paul Tagliabue, what do you think of? Well, he was, as I said, incredibly intelligent, incredibly eloquent, and really a humble human being. I mean, he had all the elements of quality and character that you want your, not only do you want to have, that you want your children to have. And Paul was epitome of that. I mean, the biggest disagreement he and I had was I was running ESPN and ABC when 9-11 happened, and I was encouraging him to play the games as quickly as possible and help America heal.

9:41And he pushed back pretty adamantly and aggressively, saying that he needed to take a beat. You know, Pete's biggest regret was playing the games after the Kennedy assassination in 63. And he wasn't going to repeat that same mistake. And he turned out to be right. When you were working, because you know so much about media, and he brought you over to build out the media business and to sell the media rights. How involved did he get into it? Or did he sort of like let you leave you to your own devices, so to speak? I don't want to speak what he did. I can tell you what I did. There wasn't a time where I didn't have an idea or two that he didn't make better.

10:29And that was one of his legacies as well. But he, as I said, he's always been the smartest guy in the room. But he never let anybody kind of feel that he was the smartest guy. So if we had an idea or anyone had an idea, his reaction and thought about it was usually from a perspective, an angle that I hadn't previously thought about it and made it stronger. Do you take and do you have like an ownership stake over the NFL network? Like, as you see it currently, you know, going over to ESPN, is there anything that hits your emotions about, hey, that's what I created. That should still be with the NFL.

11:10Or is that old history and you don't really care? Oh, yeah. Honestly, I don't give it a second thought. I do get very – I am proud of some of the legacy that we have. And I often see it when I'm in an airport traveling and I look up at the television sets up there and go, yeah, ESPN, ESPN2, NFL Network. I had something to do with that stuff. And I get a lot of pride out of that. It's something to do with it. Yeah, I would say so. And that's sort of the moment I take to sort of say, pat myself on the back and say, yeah, okay, maybe I did help a little bit. I mean, it's just the way, you know, look, there's a lot of serendipity in my career.

11:54There's a lot of serendipity in most people's careers. I'm at least at an age and a position where I recognize mine. So, yeah, I think there was probably a number of other people that could have accomplished much of what I did. But I was lucky enough to have that opportunity. And I didn't boggle it too bad. You know, there were a couple of kind of career-making moments in my business world, and I was lucky enough to successfully navigate some of them. Launching the NFL Network was one of them. That was certainly challenging. Launching, you know, ESPN2 in the early 90s was another one. Doing a full season of the NFL was a kind of career-maker-breaker moment for me.

12:40And all those kind of ultimately turned out successfully. successfully. So no, I'm happy, frankly, that ESPN is going to be taking over the NFL network. I think they'll be a good nurturer of that business. I think they understand singular sports businesses. I mean, they've got a lot of experience from Texas with the SEC channel, the ACC channel, and I'm looking forward to seeing what they do. How do you expect it to change? I hope it gets better. I hope they get more resources to do more things. The NFL network is just tough being a singular network in today's media environment. So consolidation is not anything new and it's not anything that isn't going to continue.

13:26But it's almost impossible to be a single channel out there today. And the NFL network is more than just one channel. It's a red zone channel. It's NFL Plus. It's digital assets. So I think the NFL has actually threaded this needle very well with ESPNs, giving them a bunch of the legacy analog assets that need that kind of protection from the mothership and from the benefits of the synergies of the Disney company. But it also kept what's important to the future growth, the digital assets, and how to distribute that and how to serve the next generation of fans. So I think they've solved the problem as usual, really exemplary.

14:10That's wild to me because the NFL, the most powerful programming probably in the world, but certainly in the United States. And even the NFL can't move forward with the singular channel or with the two channels, if you include NFL Red Zone and sort of sold out to ESPN. Is that a logical way to look at that? I think it's certainly logical. I don't think I look at it that way. I look at it as they had these assets and how do you nurture them? How do you make them grow in today's environment? You can't actually do that as an independent. So I think they just recognize the realities of the situation and said, if I really want these businesses to be blossoming, you know, when they say business, I mean, they're basically primarily marketing to developing fans.

14:57fans and how best to do that that's with a bigger partner and and and and and importantly you have to look under the hood here importantly they kept the digital play they're going to be continuing their you know their tick tock and and what's app feeds and that to me is ultimately when you kind of look at media today you got to say how do i set how do i serve those audiences because that's where the next generation exists, and that's where you have to reach them. And so I think they've actually, you know, to the old expression, eat their cake and have it too here. So you worked at ESPN, you ran ESPN, you ran NFL media, having the NFL take a 10 % stake in ESPN tangibly, how does that change the relationship between the two?

15:53Yeah, the answer is who knows? I don't. I happen to believe that relationship is on really solid footing today. I think Jimmy has done a heck of a job. Bob has always been a big fan of the National Football League. So I don't anticipate much difference in their operating ability. I think because, look, this is not rocket science. You know, sports is what's driving all linear media today, okay? And the greater sport, you know, the old Queen Victoria quote, you know, who is second to America's yacht race? There is no second. There is no second to the NFL in programming. And so if you are programming, let alone ABC, but you're programming, you know, a broadcaster, but you're also programming a television network devoted to sports or networks devoted to sports, you have to have a great relationship with the most important content there is.

16:53And that's what, you know, the NFL and ESPN have demonstrated that. And it's been mutually, you know, beneficial. It doesn't stop ESPN from, you know, criticizing the NFL and it doesn't stop the NFL from satisfying its other partners. So it's just, you know, you've got good management at both places, and they're executing, you know, the best of their ability. Will there be conflict in that relationship? I suspect so. But, you know, nothing more than, you know, is it Green Bay Philadelphia last night, or should it have been Green Bay New England? I mean, that would be the fights that, you know, Jimmy and Roger will have and Bob Iger.

17:33So good for them. You know, let them fight them. Let them try to figure out in April who's going to be really strong in November. I tried to do that. It's pretty difficult. So it sounds to me that if you were still at the NFL and you were still running NFL media, you would be totally okay with this sale. Like this is a logical play. Totally okay. I tried to do this when I was at the NFL. I couldn't pull it off. So, you know, I bowed low in the direction of Roger and Bob Iger. They figured out how to do it. I tried to get ESPN involved in NFL Network 15 years ago. I couldn't get it done. That's the truth.

18:11Who blocked that? Was it the NFL? I can't tell. It's old news. Who cares? It was never the NFL. It was never the NFL. My favorite story about the NFL Network is the MLB trying to get together and doing the Great American Sports Channel. And just who would own more than 50 percent of it? There's no way the NFL would go in and do a 50-50 deal on that one. That was a short-lived idea, it seems. There's a lot of egos involved in making something like that come off that would be challenging to do. But I want to tell you that my best tag label story I ever had was when I was now working with him and we were having dinner somewhere.

18:56And he started telling me stories. And, you know, he had a cocktail or two, and he was reminiscing. And he started to tell me how the biggest honor he had in his life was when Georgetown retired his number. You know, he played center for Georgetown. And he told me this story with incredible sincerity and deadpanned. And finally, at the end, you know, I thought, well, they retired his number. He must have been a better basketball player than I could recall. not that i saw him play basketball and then he said you know i gotta tell you my number was the same as patrick ewing they actually retired his number but i take pride in the fact that and that's who paul was to me he was just as i said the smartest guy i ever worked with and maybe uh um the most humble and gracious human being i know nobody else is ever going to wear the number 33 at georgetown r.i.p i think it was 30 i think it 32 but i could be mistaken on that oh no ewing was 33 for a for goodness sakes uh let me take a quick uh i i grew up in dc in the 80s i i better know that one okay and i want to come back and i want to ask you about nfl rights i'm all over the nfl right now steve

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21:02With more than 200 episodes, you can bend your way, decade by decade, defining event to defining event, from the founding into the 20th century. Join me, Professor Greg Jackson, for History That Doesn't Suck, an Odyssey podcast. Available on Apple Podcasts, Spotify, or wherever you get your podcasts. Steve Bornstein, you mentioned ESPN2 and you mentioned NFL Network. For me, covering you as you grew the NFL, the revenues that were coming from the NFL rights is one of your singular achievements in your career. I mean, they kept growing exponentially to where now it's$110 billion worth of rights.

21:50Almost certainly, they're going to open up early. All of the TV networks are anxious to keep the NFL. You have all of the streaming services, Netflix, YouTube, Amazon, maybe Apple, who knows. if you were controlling the NFL rights right now how would you be viewing the marketplace

22:19the marketplace is clearly frothy I mean I don't know if there's any other way to describe it but if you are an IP holder today this is a good time to own IP I mean nothing's going to happen that's going to be more revolutionary in the next 10 years that hasn't already happened the last 40 years by that i mean what has happened the last 40 years is only going to be exponentially greater going forward so there's going to be continued fragmentation and sports will continue to you know be head and shoulders above everything else because it's somewhat anti-fragmented uh uh content so if it's also why you see where all this money is running you know from from pe firms trying to invest in college sports to to college administrators running around trying to figure out how to raise next money this is a good time to own ip this would be a good time whether you're the nfl or you're some you know i'm not as highly confident that the pickleball league will be a successful media television sport but all of it this whole race to all this is really just recognizing the fact that there's only one product that actually

23:37you need some appointment viewing for and that's live sports being the most important live sport certainly in north america the nfl is gonna do what it needs to do when it wants to do it the nfl has always prioritized reach which has always meant broadcast television now we're seeing numbers i know they're not nielsen rated numbers i know all the broadcast executives are going to now kill me on this but we're we're seeing numbers on netflix games we're seeing numbers on the amazon games how would you view the difference between broadcasts and streaming or yeah let me start with that and then my second question is going to be how does the nfl view that well i i don't speak for the nfl let's be very candid and the last time i did it was 10 years ago so there are a lot smarter guys at the nfl that you should ask those questions to but if the question is you know do i care what nielsen says anymore i didn't really actually care it was a fact of life when i was running abc and espn but i didn't really care about it because it was a flawed system.

24:44When you look at these numbers that you're getting directly from the streamers, they're real. I mean, they can count. They can count servers, and they can count people that are watching. So to me, if you get any criticism for they're not Nielsen-rated, you're talking to the wrong guy about that because it's irrelevant. And by the way, part of the big increase that everybody's experiencing today in the sports world is because Nielsen's changed their methodology. So, you know, let that take a couple of years to sift through before you get a base case of what's really going on. Because they don't know.

25:21You know, it's sort of like the line calls on Wimbledon. You know, it's a guess, and it's a good guess, but no one is actually watching the ball hit the line or not hit the line. They're just giving you probabilities, and so is Nielsen, and so is every other rating service. That's my two cents on ratings. There should be an alternative to it. There isn't one. Too bad. But the next iteration will be real numbers because you can actually count how many eyeballs are watching. So to me, that's progress. Okay, so you're sitting down. I'm about to re-ask it, so that's perfect. You're sitting down at the table, and you have broadcast executives there.

26:00You have cable executives. You have traditional media, and you have the digital streamers at the table. How do you approach all these different entities? I mean, certainly it's not just who pays the biggest check. No, and it never has been. I think, you know, money has been an important factor, but it was never the only factor. And the NFL, to your point in the setup of the question, they've always recognized that reach was important. And I don't think you'll ever see them walk away from that because it doesn't make any sense to walk away from that. You know, they're not doing all these international games because, you know, they don't want to broaden their reach.

26:39The reason they're making that commitment is that they see that, you know, the U.S. or North America, if that's their market today, is big. But there's a big opportunity outside there. So, you know, I really recognize, you know, Roger's commitment to that because that's how you grow the pie. And that's what they're doing. And so when they sit down there and they have the streamers and they have the broadcast legacy networks and they have the cable networks, I suspect that they will balance between all three of them and save some room for the next wave of digital opportunities that will present itself.

27:16That's what I would say.

27:21It's good to be the king, and they're the king. So they're going to decide, you know, what's in the best interest of the fan, what grows the sport. Those have always been the qualities that Roger has articulated, and I don't see that changing. What is in the best interest of the fan?

27:42That can be a great question. That is a great question. It depends which fan you're talking to, right? But the fact of the matter is that you can watch every NFL game that is played pretty much from your home television set without much effort. It may cost you a couple of bucks, but it's a pretty good value when you look about going to a game costs X. I can buy every game for a lot less than X. That seems like a pretty good bargain for me, and that's always been part of what you say, broad access. That's what that means. there's more access today than ever before for an NFL fan and that is that's by design you know 20 years ago you couldn't watch well 20 years ago yeah 25 years ago you couldn't watch every game right you could only watch three games that came into your market today you have the opportunity with Thursday night football Monday night football and Sunday night football you have six seven national windows to begin with every week and then if you really want more inventory you have the ability to purchase Sunday ticket, which is another great product.

28:53So I look at this and say that serves the fan pretty well at a really good value. You know what I hear all the time is the idea of the NFL spreading itself too thin, that there are too many windows out there. It sounds like you don't subscribe to that one bit. Yeah, I know. This is like everybody, I'm not in my backyard. Stop. You know, stop, stop. You know, I was at ESPN and I pushed the college community to put Thursday Night Football on ESPN, college football before the NFL got there for that very, very real reason. It's an opportunity to reach fans that you can't reach every other day. And so, no.

29:41Yes, you can make that argument, but it's just like you just want to sort of, you know, this place is full, no more bologna. I mean, this is fabulous. The fact that you can watch, you know, Sunday night football game, then a Monday night football game, and then get geared up for Thursday night, that's been 15 years in the making, and I think it's fabulous. I don't see, I don't hear anybody, you know, there'll be some, you know, get off my lawn guys and say, oh, the quality of Thursday night football, you know, is not up to, you know what? I've seen some great Thursday night football games, and I've seen some kind of low scoring, not exciting Monday night football games still.