PLEASANTON, Calif. -- Kevin Mulligan wants to offer a nightly television sports menu that is sure to satisfy the appetite of advertisers throughout the lucrative San Francisco area.
Mulligan, general manager of Pleasanton, Calif.- based Viacom Cable, a division of Viacom International Inc., is putting the finishing touches on what will become the Bay Area Sports Channel, the latest regional cable sports network in the United States.
The Sport Channel network will be a cooperative effort between Viacom, Heritage Communications and Tele-Communications Inc. and will reach a base of 1.9 million subscribers from San Francisco to Reno, Nev.
Regional systems, because of their strong local appeal, have become the new economic muscle in the sports marketplace. While network profits are dropping, sports cable -- regionals, pay-per-view and ESPN -- is booming.
'The power of the networks is eroding,' said Hal Katz, executive vice president of New York-based Vitt Media International. 'Network (overall) revenues have declined by a quarter of a billion dollars. Advertisers are looking at alternative television (cable) because it is cheaper. It's usually 10 to 25 percent cheaper than network television.'
The entire cable industry is enjoying an ecomonic boom. Since 1985, according to Paul Kagan Associates Inc., cable network revenues have jumped 28 percent to $2.55 billion.
Mulligan said that economic momentum has carried over to audience-specific sports programing.
'Americans have a strong appetite for sports,' Mulligan said. 'But the problem is that much of the time they are viewing teams they really have little interest in. Regional sports networks are able to bring them the teams they want to see.'
Mulligan's system hopes to be able to broadcast road games of the San Francisco Giants and Oakland Athletics, a select number of Golden State Warriors games and football, basketball and possibly baseball contests involving college teams throughout the San Francsico area.
'There has always been interest in the local colleges -- Stanford, Cal, San Jose State,' Mulligan said. 'We think this is an excellent sports market. Both the A's and the Giants are having outstanding years at the box office and we feel the Golden State Warriors management will turn that club into a winner.'
Mulligan's optimism is boosted by the success of GiantsVision -- the San Francisco Giants pay-per-view network.
Since its launch in 1986, GiantsVision has grown into the most successful local sports cable system averaging 22,000 screens a game through the first two months of the 1988 season.
Viacom also is entertaining an offer from Bill Daniels' Los Angeles-based Prime Ticket network to televise the Los Angeles Kings hockey games.
Daniels' arrangement with the Kings personifies the developing muscle of cable sports television. Two weeks ago, when the Kings shocked the hockey world by trading players and an estimated $10 to $15 million in cash to the Edmonton Oilers for superstar Wayne Gretzky, Prime Ticket was right in the middle.
By agreement, Daniels will pay $2.5 million to the Kings over the four remaining years of Gretzky's contract.
The Gretzky deal is just the latest triumph for cable sports. Last year, ESPN won praise for its coverage of the America's Cup and then followed up by landing the rights to televise a package of NFL Sunday night games for a $153 million price tag.
This year, Cablevision Systems Corp. signed a $51 million, three-year deal for the television rights to a package of National Hockey League games.
Atlanta cable station WTBS, meanwhile, has been part of the national NBA package for the last three years.
The future looks even brighter for cable sports particularly since Major League Baseball's network contract runs out in 1989.
The International Olympic Committee also will consider cable's role, if any, in the 1992 Barcelona Games when it gets the network bids on Aug. 19. The growing domestic interest in the 1994 World Cup Soccer championship might also benefit cable.
'The impact of cable sports might not be very great right now, but down the road it will be,' said Herb Swan, vice president of sales and products for Pro-Serv Inc. Television, based in Dallas.
'As far as advertising is concerned, the handwriting has been on the wall for a while,' Swan said. 'Networks can no longer go out and say to an advertiser 'here is our schedule, where do you want to fit?''
Regional sports cable networks blossomed in 1984 after the Supreme Court ruled that colleges, not the NCAA, controlled the rights for college football broadcasts.
The regional networks, of which there are now 14, grew in number after the ruling. Now, with the completion of the Bay Area Sports Channel and a five western state network headquartered in Denver, the regionals will truly be a national carrier.
'It's a coast-to-coast network,' Swan said. 'And a lot of advertisers view it that way.'
The regionals, however, are also keeping the rights fees for sports television at a premium.
'Certainly sports channel's bid for hockey has changed all the dollar signs,' Swan said.
The move of professional boxing to cable and pay-per-view also has increased the mass appeal of cable sports, as has professional wrestling. HBO, which airs movies and entertainment specials, paid $26.5 million to heavyweight champion Mike Tyson for the rights to seven bouts.
The rise of cable in televising everything from championship bouts to the America's Cup has come primarily from a changing mood among advertisers.
Katz' company, Vitt Media, conducts a seasonal market survey of the nation's leading advertising firms.
The company's latest survey focused on sports advertising and found that 74 percent of the executives surveyed felt that the ad dollars spent on the Super Bowl were of questionable value. The survey found that 71 percent held the same view for the World Series.
The Vitt survey combined with the clustered offerings in September alone -- U.S. Tennis Open, America's Cup, the Summer Olympics, NFL and college football and the baseball playoffs -- lends itself to a finicky marketplace.
'There is a small group of advertising that will always be there at the major events,' Katz said. 'But for other companies, there is more emphasis being placed on alternatives.'
American industry no longer has the resources to take a scatter-shot approach to advertising. Advertisers would much rather invest in a cheaper market that is much more focused to the demographics they want.
Cable networks also are enjoying a healthy dose of good timing. The five-month-long writers' strike forced the networks to flood their programing with reruns and that drove many viewers to cable.
'Usually during an Olympic year, sports budgets get used up rather quickly,' Katz said. 'But this year, thanks to the writers' strike, there is more money around for sports.'
The largest of the regional sports cable carriers is the New York City-based Madison Square Garden Productions which reaches 2.5 million screens.
Los Angeles' Prime Time is next with 2.4 million, which Daniels hopes will top 2.9 million thanks to Gretzky, and SportsVision of Chicago rounds out the top three with 1.3 million screens.
Swan said those numbers are bound to go up.
'I think you will see a steady growth of these regional services,' he said. 'There future certainly looks good.'
