Risk and innovation, underscored by a devotion to supportive teamwork—these are ESPN’s keys to success, noted one of its chief executives.
Speaking at the Fuqua School of Business Monday night, Larry Kristiansen, ESPN’s vice president of event production, discussed the evolution of the sports media giant since its creation in 1979.
Ever since the network acquired NFL television rights in the early 1990s, Kristiansen said, it has continued to diversify and innovate on a large scale.
“The yellow projection of the first-and-10 line in football... the K-Zone visual in baseball, all of these were projects we invested in earlier.... Now we have ESPN3.com and ESPN 3D,” he said. “But we don’t want to rest on our laurels. We started out in trailers, and now we have to take shuttles around. We are constantly changing.”
As the keynote speaker at “Business in the Wide World of Sports,” Kristiansen continually stressed the importance of risk-taking in business, even summoning one student to the podium, only to hand him 50 dollars as thanks for being a “risk-taker.”
“There certainly are failures when risk is involved,” he said, noting the network’s unsuccessful ESPN mobile phone as an example. “But without risk, we won’t get anywhere.... [At ESPN,] you’re encouraged not to be afraid to fail.”
ESPN derives revenue from both advertising and its subscription services, like ESPN The Magazine. Such diversification, Kristiansen said, allowed the network to weather the recent economic downturn when advertisers were less willing to do business. Although they constituted a risk when initially implemented, subscription services now protect the network’s revenue flow, he added.
ESPN also strives to add new dimensions to American sports culture. Kristiansen said the network was particularly devoted to thoroughly covering the World Cup this past summer in order to fully bring “the world’s game” to the American audience.
“We threw everything we had into the World Cup. We took it upon ourselves to make this a cultural happening,” he said.
Kristiansen also emphasized ESPN’s foray into the 3D market as evidence of its willingness to experiment.
“We decided to get into 3D with both feet,” he said. “It is very costly, but we are airing a full season of programming. We plan on doing football, NBA and the X-Games. If you have 3D, buy yourself some glasses.”
But at the same, he said, ESPN measures its risks carefully. He noted that the network usually tests innovations on a small scale before implementing them more widely.
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“[It can be] a quagmire,” he said. “But it is a lot of fun to figure out.”
ESPN is currently testing the degree to which its 3D technology causes headaches in some individuals.
Kristiansen also stressed that the network has extended its brand on the global stage, recently adding ESPN America in the United Kingdom and purchasing the London-based North American Sports Network in 2006, as well as similar companies that serve international markets.
“We have arms all around the world who understand the local niches,” he said. “I was on a cruise in the Caribbean, and I could watch the Superbowl on ESPN—pretty cool.”