Play by Play

When is a great product not a great business? Maybe, just maybe, in the case of SportsBand Network

What no one disputes about SportsBand Network, an in-your-ear audio program for fans at golf tournaments, is the sheer intuitive appeal of the idea: no one who hears about it doesn't love it. Combining play-by-play commentary and features, SportsBand provides spectators on the course with as much information and entertainment as television coverage offers couch campers at home. Now, fans watching Tom Kite make birdie on 15 can at the same time hear, through a special Walkman-like receiver and earpiece, about Lee Trevino eagling the ninth. SportsBand erases the single biggest frustration of anyone who's ever attended a golf tournament: it tells you what's going on.

What's more, no one who's actually listened to SportsBand argues that it's anything but a top-rate production. The technical quality is superb. The 30-member crew of engineers and broadcasters are pros and put on a clean, exhilarating show.

So: a good idea; a well-executed production. Then why has it been so tough to turn SportsBand the Product into SportsBand the Business?

Credit the $2.3-million question: who's going to pick up the check? Between production costs and overhead, $2.3 million is what SportsBand must bring in just to break even. Do you ask individual spectators to shell out five bucks each to rent a receiver? Do you charge tournaments $100,000 to enhance their events and let them bundle the service into ticket packages? Do you seek a corporation willing to plunk down $1 million for the privilege of being the title sponsor (for example, "The INC. Magazine Broadcasting System coming to you on SportsBand")? Do you do a combination? Which do you do first?

Those are the questions Frank Mitchell, president and chief executive officer, and Theis Rice, chairman and chief financial officer, have struggled with over the past three years. Who's the real customer for a service that at first glance offers benefits to so many? Who should pay, and how do you convince them to do it?

"When the Sportsband concept came to us, it was not a new idea," says Art West, director of promotions for the Professional Golfer's Association Tour. "But it was a buttoned-down, polished presentation." That was in the spring of 1986. Mitchell and Rice had been running an oil-and-gas-drilling business in Dallas since 1983, but having learned about past attempts at on-site tournament broadcasts, they approached the PGA Tour to see if it was interested in trying the idea again.

Mitchell had spent a few years playing professional tennis and knew a bit about the world of sports marketing (see "The Founders," page 6). He was intrigued by the idea of setting up a company that could serve three customers: the golf spectator, the tournament operator, and the corporate advertiser seeking to buff the company image. The obvious appeal of the product itself was so strong and so diversified that he didn't expect revenues to be a problem. "I'd been around sports sponsorship," says Mitchell. "I knew the kind of dollars that are spent."

The Tour was interested. In 1981 it had introduced electronic scoreboards to the courses, and since then had been investing heavily in building hilly "stadium" golf courses so spectators could see better. Developing a broadcast to make viewing still more enjoyable was something Tour officials had considered, and when Mitchell said he was willing to spend SportsBand's money to pursue the idea, they pledged not to sign other broadcast agreements while he went to work.

With $75,000 invested by Rice and his two sisters early in 1986, Mitchell consulted a radio engineer who suggested using an open portion of the FM band -- and by October 1986 SportsBand had secured special temporary authority from the Federal Commmunications Commission to send out low-level signals over golf courses via a mobile transmitter and antenna tower.

Next, Mitchell set out to put together a broadcast prototype. The lawyer who helped SportsBand approach the PGA Tour had spent several years working at National Public Radio, and he pointed Mitchell toward a former colleague there, Steve Rathe.

Rathe and his New York City-based production company had coordinated other multisite broadcasts, including the New Orleans Jazz and Heritage Festival, and he was game to see what would happen when he combined "the public-radio crew, the Dallas oil folk, and the golf crowd." He signed on for a $450 daily consulting fee.

By the fall of 1986 SportsBand had a system ready to test at an actual tournament. Rathe contracted with a group of 20 professionals -- including Carol Mann, a Ladies Professional Golf Association Hall-of-Famer and an NBC reporter -- and headed for the J. C. Penney Mixed Team Classic, in Largo, Fla.

The operation went beautifully. The tournament director wrote the Tour that SportsBand was exciting and would be welcome to return the next year.

The Tour liked SportsBand's demo tape and in early 1987 began negotiating a licensee contract, structured like its deal with network television: the Tour would deliver a group of tournaments at which SportsBand could broadcast, and SportsBand would pay a rights fee.

The agreement, however, had to be approved by the Tour's tournament policy board, and that's when SportsBand hit its first snag. At the June 1987 meeting of the 10-member committee of players, businesspeople, and officers of PGA of America, the players bluntly said they weren't sure this was such a good thing. What if a player was set to putt, and something dramatic was announced over the system? Would everyone listening gasp in unison? Or cheer? Just what kind of effect would this information have on the crowds and the game? Before they could approve it, they wanted to see three more tests in the fall -- and large-scale ones, too, with thousands of receivers at each course.

It was a reasonable request, but for Rice and Mitchell a daunting one. Here it was the middle of 1987, the point at which they'd presumed they'd get the final go-ahead. They'd been buying equipment, paying consultants, gearing up to start making money later that year. Instead, they were going to have to dig up more money for the test runs -- a good $200,000 since, as Rice remembers, "we were going to go into those tests loaded for bear. People three deep with equipment. I wanted to make sure that nothing went wrong at those tournaments."