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July 7, 2003 Issue (Cover Story)

Extreme Sports, Challenging Spots
In Crowded Playing Field, ESPN Must Tread Lightly With 'X Games' Campaign

As competition to attract fans of extreme sports goes into overdrive, Walt Disney's ESPN is launching a celebrity-studded ad campaign today to promote its upcoming "X Games IX". The summer games get under way next month in Los Angeles and will air on Walt Disney's ESPN, ESPN 2, and ABC Sports. The nine-year-old competition includes such potentially bone-jarring sports as in-line skating and skateboarding. The games take place twice a year, and primarily attract kids, teens and men in their 20s -- a desirable but hard-to-reach audience.

Although ESPN was among the first to embrace extreme sports, the landscape is becoming increasingly crowded. Last week, for example, News Corp.'s Fox Entertainment Group launched "Fuel", a 24-hour extreme sports channel. And General Electric's NBC has broadcast the "Gravity Games" since 1999, the next round gets under way in Cleveland this fall. In addition, Viacom's MTV and AOL Time Warner's WB Network are both airing shows that center on a surfing competition, which these days is being marketed as an extreme sport. All of which makes for a crowded playing field. One [ESPN] TV spot, titled "Uninvited", features pro skateboarder Bob Burnquist skating in a backyard pool, where he is confronted by the pool's unhappy owner -- Hugh Hefner. This is ESPN's largest ad effort for the X Games. The cable network is spending $3 million to $5 million on ads that run off the network and an additional on-network promotion that is valued at more than $5 million.

Ratings for the X Games have been strong. Last year, X Games events airing on ABC attracted 2.56 million viewers on average, while NBC's "Gravity Games" lured 2.15 million viewers on average. X Games events on ESPN last year attracted 871,000 viewers on average. ESPN has attracted 13 high-profile sponsors for this year's event among them PepsiCo's Mountain Dew; Yum Brand's Taco Bell; General Motors' Saturn; and Gillette's Right Guard Xtreme. Marketers are being offered various ad packaged priced between $1.5 million and $3 million that include commercial time on Disney's media properties, signage at the game, and even some product sampling at the events.

Despite the sport's hip appeal, youth-market experts warn that ESPN needs to tread lightly. "They run the risk of the games being perceived as overcommercialized," says David Morrison, president of TWENTYSOMETHING INC., a Philadelphia youth-marketing consultancy. ESPN says it is aware of the potential for a backlash. "We absolutely get the fact that if you lose the authentic nature of what you are doing, you will lose these consumers," says Ed Erhardt, president of Disney's ESPN/ABC Sports customer marketing and sales.

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