By Jessica Toonkel
NEW YORK (Reuters) - Eurosport, Discovery Communications Inc's European sports broadcaster, is in talks with potential partners to broadcast drone racing, making it the latest network looking to experiment with the fledgling sport in which contestants navigate small, remote-controlled aircraft at high speeds through aerial obstacle courses.
For television networks and advertisers, drone racing represents an opportunity to combine the live-event attraction of NASCAR and Formula 1 with the digital-age appeal of what has become known as eSports, in which video game players compete while millions of viewers watch online, usually for free.
Eurosport would join Disney Corp's ESPN, British broadcaster Sky Plc, and Germany's ProSiebenSat.1, all of which have recently signed on to broadcast races by the 15-month-old Drone Racing League. Sky also agreed to invest $1 million in the league.
On top of that, the league has partnered with MGM Television, run by Mark Burnett, to develop a reality series about the pilots.
"We think it's an area worth us paying attention to and to test on audiences," Peter Hutton, chief executive of Eurosport, told Reuters in an interview.
Eurosport, a pan-European sports media group that Discovery bought last year, has 228 million subscribers in 93 countries in Europe, Asia and Australia.
While the network typically focuses on traditional sports like tennis and soccer, drone racing has "potential for sporting credibility," Hutton said, declining to elaborate on discussions with drone leagues.
NICHE OR MORE?
It is by no means certain the novel sport will be a money-maker for TV networks.
ESPN has not paid for the rights to broadcast drone races, according to two sources familiar with the matter. Instead, the network is sharing ad revenue with the leagues, the sources said.
Such agreements align the interest of the network with the leagues, said Nicholas Horbaczewski, CEO and founder of the Drone Racing League, based in New York City.
The Drone Racing League, the only professional league in the emerging sport, is finalizing TV distribution deals in other markets worth millions of dollars, according to another source familiar with the situation, who asked to remain anonymous because the conversations were confidential.
An ESPN spokeswoman declined to comment.
Sky invested in Drone Racing League alongside a number of other investors including RSE Ventures, the New York-based venture capital firm of Miami Dolphins owner Stephen Ross; and Lerer Hippeau Ventures, owned by media gurus Eric Hippeau and Kenneth Lerer.
The league said it has raised over $12 million since its creation in 2015.
One factor that could limit the sport's appeal is that most drone racing on TV has been shown on a tape delay, to allow for editing to capture the most compelling visuals. The races, where small drones fly around courses in empty warehouses, stadiums and other venues, can be hard to follow for viewers watching live.
Since an attraction for most sports programming is that the contests are broadcast as they happen, it remains to be seen whether large numbers of fans will want to watch races after the fact.
"Delays don't really fly anymore," said Daniel Glantz, global head of sponsorship at insurer American International Group Inc, which sponsored the amateur Drone Sports Association's National Championships in August, though it did not run ads during the event.
The sport's boosters say it is only a matter of time until the networks and leagues - there are now a handful of drone racing leagues in the United States, Europe and Asia - figure out how to effectively air the races live.
On the other hand, Drone Racing League's Horbaczewski said presenting races in a more produced format is the best way to attract new fans, and that live races are not vital. "There are a lot of sports that don't go live off the bat," he said. "Look at professional poker."
Fox Sports is waiting for the sport to evolve to see which leagues or organizations prove to be the best partner before agreeing to broadcast races, said David Nathanson, head of business operations at 21st Century Fox Inc's Fox Sports.
So far, the TV audience for drone races has been small. Only 223,000 people watched the U.S. Drone Racing Nationals broadcast on Sept. 18 on ESPN, according to Nielsen, which tracks viewer data.
That is tiny compared to the 13 million viewers on average that watch Monday night NFL games last season, but is in line with the 264,000 viewers on average who tuned into an episode of Turner Sports’ first season of its ELeague televised video gaming competition last summer.
“I think what took 10 years for eSports to get to will only take two to three for drone racing,” said Keith Strier, a digital strategy head at Ernst & Young, which sponsored the 2016 National Drone Racing Championships and is considering sponsoring a drone team or organization. "eSports has paved the way.”
(Reporting By Jessica Toonkel; Editing by Eric Effron, David Gregorio and Bill Rigby)