Entertainment Industry

Category: NFL

U.S. advertising spending totaled $144 billion in 2011

Network television advertising fell 2% last year, despite a strong fourth quarter including the World Series between the St. Louis Cardinals and Texas Rangers

Television advertising once again formed the bedrock of the U.S. advertising industry, which closed the books on 2011 at $144 billion in spending.

Overall advertising spending rose slightly -- 0.8% -- over 2010, according to data just released by Kantar Media, which tracks spending.

Network television advertising fell 2% last year, despite a strong fourth quarter lifted by popular NFL football games, Major League Baseball's World Series between the St. Louis Cardinals and Texas Rangers, and Fox's new singing competition, "X Factor."

Ad revenue to national syndicated TV programming jumped 15.4%, with department stores and health and beauty brands increasing their buys. Spanish-language television ad spending climbed 8.3% for the year. Cable television advertising grew 7.7%, the Kantar study found.

Advertising revenue for Internet media inched up a mere 0.4% for the year. Internet display ads were up 5.5% but paid search was down 2.8%.

Most worrisome to media companies that rely on advertising was a pullback in spending by marketers during the fourth quarter.  Revenue declined 1% compared with the fourth quarter of 2010 -- marking the first quarterly decline since the end of 2009.  Kantar said ad growth rates have been slowing sequentially for five consecutive quarters.

“Some mature digital media formats were also touched by the year-end tide of reduced spending," said Jon Swallen, senior vice president of research at Kantar Media Intelligence North America. "Whether this is an isolated occurrence or an early sign of digital dollars moving more quickly toward emerging and unmeasured digital platforms bears watching as 2012 unfolds.”

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-- Meg James

Photo: Former St. Louis Cardinals slugger Albert Pujols celebrates his team's victory in the 2011 World Series.  Pujols now plays for the Los Angeles Angels of Anaheim. Credit: Matt Slocum / Associated Press

The Morning Fix: 'The Grey' gets the green. 'The Help' cleans up

After the coffee. Before starting my own awards show.

The Skinny: Viacom CEO Philippe Dauman took a 50% pay cut in his salary to just $43 million in 2011. My offer to my bosses is to work for 50% of what Dauman took home. It's a steal! Monday's headlines include a box-office recap, new questions for DreamWorks, the results of Sunday's Screen Actors Guild Awards and a profile of NBC's Paul Telegdy. 

The Grey finished first

The Daily Dose: On Sunday, CBS' "60 Minutes" ran a profile of NFL Commissioner Roger Goodell. But anyone expecting a Troy Polamalu-like hit on the NFL's big boss by television's toughest news magazine was sadly disappointed. While it would be silly to expect one of the NFL's biggest customers to bite the hand that feeds it, the piece could have still raised some tough issues. For example, how about asking Goodell about how fewer fans can afford to go to games or whether he's worried about how rising television rights fees for his product leads to bigger cable bills for fans? Too close to home? Then how about whether he's comfortable with the league being in bed with so many beer companies?

'The Grey' brings in the green. Liam Neeson's "The Grey" became the actor's third action hit in a row, taking in $20 million and easily finishing first at the box office. Doing better than expected was Katherine Heigl's "One for the Money" while "Man on a Ledge" fell off and went splat. Box-office coverage from the Los Angeles Times and Movie City News.

Dilemma for DreamWorks. With its movies "The Help" and "War Horse" in the running for lots of Oscar love, the mood should be bright and confident at DreamWorks, the movie studio run by Steven Spielberg and Stacey Snider. Instead, though, the production company finds itself facing questions about its financial future as their initial investment from backer Reliance Entertainment runs out. The New York Times looks at the challenges facing Spielberg & Co.

Hey DreamWorks, I solved your dilemma. While the New York Times writes about DreamWorks' potential money crunch, the Wall Street Journal says that 94-year-old billionaire Kirk Kerkorian, who used to own MGM, again wants to be a player in Hollywood. While the WSJ didn't talk to Kerkorian (or even get a recent picture), Jay Rakow, one of his top aides, told the paper, "Our investment or investments could include a technology company with the potential to transform the entertainment industry to a studio or mini-major which can benefit from the infusion of cutting-edge technology." Perhaps Kirk can pick up the phone and call Steven Spielberg. Problem solved and my finder's fee is only 10%.

Too soon to tell? It's been a year since Comcast took over running NBC and the Financial Times says the move is paying off for the peacock network. The story notes all the money Comcast has pumped into NBC for programming and new leadership. It's true that NBC is spending a lot to develop new shows and beef up its local stations. However, the fact that Comcast is investing in NBC doesn't mean it is proving profitable for the cable giant. If the network rises out of last place and starts making more money, then Comcast brass can pop the champagne.

Wait, you mean that's wrong? The ethics scandal tearing through media giant News Corp.'s British tabloids picked up steam over the weekend when several reporters from the Sun were arrested as part of an investigation into illegal payoffs from the press to police. Details from the Los Angeles Times and BBC.

The lesson is report before reporting. Before legendary Penn State coach Joe Paterno died, an erroneous report of his death was posted by a Penn State student website. Then CBS Sports picked up that wrong story and posted it as well, giving it legs. Now CBS Sports has canned the staffer guily of posting first and asking questions later. More from the Washington Post.

Inside the Los Angeles Times: "The Help" was the big winner at Sunday's Screen Actors Guild Awards.  Viacom Chief Executive Philippe Dauman saw his pay package drop by about 50% to only $43 million. A look at NBC executive Paul Telegdy, who oversees late night and alternative programming for the network. 

-- Joe Flint

Follow me on Twitter. I won't censor your tweets at me. Twitter.com/JBFlint

Photo: Liam Neeson in "The Grey." Credit: Open Road

Kia Motors USA to premiere Super Bowl ad in theaters

Kia Super Bowl Ad

The Super Bowl has become television's biggest stage. Within days, Kia Motors USA will begin touting its Super Bowl commercial on big screens.

To kick off its football championship advertising campaign, Kia Motors will release a teaser trailer for its upcoming Super Bowl commercial in 18,000 movie theaters, beginning Jan. 27.  Then, four days before the big Feb. 5 game, the car company will introduce the full-length 60-second commercial, called "Drive the Dream," on the same 18,000 screens.

It is believed to be the first time a Super Bowl commercial will premiere in movie theaters. 

The move by Kia is part of a growing trend by marketers to give sneak peaks or unveil their entire ads before the Super Bowl to get a jump on competitors and gain traction in the increasingly important social media platforms. 

"We are trying to continue to push the envelope,” Michael Sprague, vice president of marketing for Kia Motors America, said. “Consumers at the movies will start tweeting about the ad, and that should help us build momentum and awareness.”

Kia's Optima sedan ad -- created by the car company's longtime agency, David & Goliath of El Segundo -- features super model Adriana Lima, MMA fighter Chuck Liddell and the rock band Motley Crue.  The concept for the commercial came during research sessions in which a consumer on a panel said the Optima was his dream car, said David Angelo, chief executive of David & Goliath.

Kia doesn’t think the early release will spoil the freshness of the ad, which will make its television debut during the Feb. 5 championship game broadcast by NBC. 

“Every year, the Super Bowl audience grows. And if we can tap 5 to 10 million people who see it early, there will still be 100 million people who haven’t seen it when it breaks during the Super Bowl,” Sprague said. “We are simply trying to create the buzz and get people talking.”

The Kia ad will be distributed in theaters by National CineMedia, which describes itself as the largest in-theater network in North America.  The company -- a joint venture between AMC, Regal and Cinemark -- also programs sporting events and concerts.

The Super Bowl ad stakes are increasingly high. This year, companies are paying NBC an average of $3.5 million for a 30-second spot, and more than $6 million for a 60-second spot.  

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 Super Bowl mania kicks off with a commercial for a commercial

-- Meg James

Photo: Kia Motors USA advertisement in the 2012 Super Bowl features fashion model Adriana Lima, fighter Chuck Liddell and Motley Crue. Credit:  Kia Motors USA

 

The Morning Fix: 'Idol' ratings tumble! SOPA and PIPA fight rages on.

After the coffee. Before trying to make this a three-day weekend.

The Skinny: I'm picking the Giants and Patriots this weekend, which is no doubt also the match NBC wants for the Super Bowl. Friday's headlines include a look at the new Star Wars video game, a box office preview, the latest on the piracy legislation fight and a tumble in the ratings for "American Idol."

The Daily Dose: Co-worker Ben Fritz asks this burning question: Mirror mirror, on the wall, which media conglomerate engages in the most blatant cross-promotion of them all? "Top Chef" fans likely noticed that this week's episode was essentially an hour-long commercial for June's big-budget movie "Snow White and the Huntsman." Film star Charlize Theron was the guest judge and the challenge was to cook a meal fit for an evil queen (guess which character Charlize plays). Not mentioned in the episode is that "Snow White" comes from Universal Pictures, which like "Top Chef" network Bravo is owned by Comcast Corp.'s NBC Universal. Smart corporate synergy or crass product placement? How about both?

American Idol ratings fell in its season premiere
Can't we all get along? The battle over proposed bills to fight piracy continues to rage on. Hollywood is furious that its efforts to curb theft and piracy have been overshadowed by Silicon Valley's claims that the laws will hurt innovation and free speech. In the meantime, an activist group has been hacking into websites to protest the bills and some sites went dark for a day as a form of protest. Of course, if Hollywood and the TV networks shut down for a day for political purposes, they'd hear about it from regulators and consumers. On Friday, Senate Majority Leader Harry Reid cancelled the vote on one of the bills. Meanwhile, on Thursday the feds shut down the site Megaupload for violating piracy laws. The latest coverage from the Los Angeles Times, New York Times and Variety.

An expensive galaxy far far away. It cost $200 million and took six years to make. No, we're not talking about James Cameron's next movie. We're talking about Star Wars: The Old Republic, the costliest and riskiest video game ever made. The Los Angeles Times looks behind the scenes at the making of the game and what it will have to do to be a hit.

Jump ball. Reading the stories about the box office this weekend and it seems to me that there is not going to be any dominating by any movie. "Underworld: Awakening," Sony's latest chapter in its vampire series (is it sign of how out of it I am that I have never heard of this franchise?) is expected to end up on top. I am no expert but I predict "Haywire," the action movie starring Gina Carano, is going to do better than people think. Projections from the Los Angeles Times and Hollywood Reporter.

Secrets of phone hacking. Earlier this week, News Corp. settled a bunch of claims having to do with phone hacking at the company's now-closed tabloid News of the World and its still up-and-running paper the Sun. While the company has tried to say that settling is not an admission of guilt, that's a hard sell. In the meantime, the Guardian, the biggest thorn in News Corp.'s side, offers up its story on how the media giant hid and misled authorities about the scope of the scandal.

Out of tune? Fox's "American Idol" returned Wednesday night and only 21.9 million tuned in to watch the season debut of the show's 11th season. Yes, the number is the lowest for the show since Season 1. But it is also an amazing number for a show that old. In my opinion, it is a little too early to start playing Taps for "American Idol." More on the numbers from the Wall Street Journal.

Inside the Los Angeles Times: Betsy Sharkey went crazy for "Haywire."

-- Joe Flint

Follow me on Twitter. Even when I'm not there, I'm there. Twitter.com/JBFlint

Photo: "American Idol." Credit: Michael Becker / Associated Press.

New NFL TV deals could hurt smaller cable channels

New NFL TV deals will change media industry

There has been a lot of talk lately about how the rising costs of professional sports -- particularly the National Football League -- will affect consumers.

After all, if the networks that carry football will all be paying roughly $1 billion per season (almost $2 billion for ESPN), then those costs will be passed on. The cable and satellite operators will be asked to pay more for those channels. The distributors will then turn to the consumers and expect them to chip in as well.

"There is no question bills will go up," Adam Chase, a lawyer at the Washington firm Dow Lohnes who specializes in sports media, said in a recent interview.

But other cable networks that don't carry sports or have huge audiences may also be hurt by the new NFL deals.

In a new report, Morgan Stanley analyst Benjamin Swinburne predicts that cable channels that don't air sports will see their annual distribution fees decline.

Many wonder whether the rising cost of sports programming will lead sports channels to be in separate packages.

Swinburne doesn't see that happening.

"To be frank, we see no easy path towards tiering or a la carte, short of a government mandate," he wrote in a recent report.

The challenge for cable and satellite pay-TV distributors though will be negotiating with companies that own sports and entertainment channels. In New York, Time Warner Cable is locked in a battle with Madison Square Garden Co., which owns two regional sports channels and a music channel called Fuse.

Time Warner Cable wants to sign new deals for the sports channels, but not Fuse. Madison Square Garden wants a new contract that includes Fuse.

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-- Joe Flint

Photo: Panthers quarterback Cam Newton. Credit: Rick Havner / Associated Press

NFL signs TV deals worth billions with Fox, NBC and CBS

NFL gets new TV deals

Even Broncos quarterback Tim Tebow couldn't have pulled off this miracle finish.

The National Football League has signed new record-setting nine-year television contracts with Fox, CBS and NBC that will see the NFL get an average of $3.1 billion a year in rights fees over the life of the deal. Currently, the three pay a combined average of $1.94 billion per season to the NFL.

The agreements will take effect after the 2013 football season, when the current contracts expire, and run through 2022. Although there were still more than two years to go on the pacts, the NFL wanted to lock in new long-term deals.

“These agreements underscore the NFL’s unique commitment to broadcast television that no other sport has,” Commissioner Roger Goodell said in a statement.

For the networks, holding onto the NFL was crucial. The games deliver big audiences and are a platform to promote their prime time lineups. As more and more viewers migrate to cable television, the value of programming that can bring in big ratings has increased.

“No other franchise delivers ratings the way an NFL game does," said CBS Chief Executive Leslie Moonves.

News Corp.'s Fox continues to have the most expensive package. It carries the National Football Conference, which includes teams in big cities such as New York, Philadelphia, Washington, Chicago and Dallas. Under the present deal, Fox pays about $725 million a year for its portion of the NFL. Over the run of the new deal, Fox's price tag will grow to $1.1 billion.

Comcast Corp.'s NBC, which has rights to a Sunday night package of games, and CBS, which carries the American Football Conference, will each end up paying an average fee of roughly $1 billion a year.

As part of its new deal, NBC is also getting more post-season NFL games as well as a prime time game on Thanksgiving night. CBS and Fox already carry Thanksgiving games. The NFL's own cable channel -- the NFL Network -- will lose its Thanksgiving night game to NBC starting next year.

Earlier this fall, Walt Disney Co.'s ESPN signed a new deal to keep its "Monday Night Football" franchise, which saw the sports cable network's fee go from an average of $1.1 billion to $1.9 billion per season.

-- Joe Flint

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Photo: Broncos star Tim Tebow leads his team past the Chicago Bears. Credit: Rick Wilking/Reuters.

New NFL TV deals will mean bigger bills for consumers

NFL near deals with CBS, Fox, NBC

Someone forgot to tell the National Football League that we're in a down economy.

The NFL is working on new TV deals with broadcast networks Fox, CBS and NBC that will include a dramatic increase in the rights fees each network pays to carry games.

Currently, Fox pays an average of $725 million per season for its package of National Football Conference games, NBC shells out $650 million for its Sunday night prime-time games and CBS coughs up about $625 million for its American Football Conference rights. Each of those contracts expire at the end of the 2013 season.

The new contracts will likely run through 2021 and, before it's over, all three networks will be shelling out more than $1 billion per season. ESPN's new deal, signed in August, calls for it to pay an average of between $1.8 billion and $1.9 billion for the Monday Night Football franchise.

"The price of poker is going up," said CBS Chief Executive Leslie Moonves at the UBS Media & Communications conference Tuesday in New York. However, he was quick to note that even a bad football game gets more viewers than most prime-time shows.

Still, at what point does the price tag become too much? In August, Art Modell, the former owner of the Cleveland Browns and Baltimore Ravens said, "The NFL as a league should be very concerned about the costs of carrying their games getting almost obscene." He fears the league will face a backlash if it is seen as gouging the networks.

Those networks will ultimately turn to consumers to foot the bill. CBS, NBC and Fox have been aggressive about getting cable and satellite operators (now known as multichannel video program distributors) to pay them to carry their programming. At the same time, the networks are also trying to increase the money they get from their own affiliates in return for programming.

In other words, the NFL sticks it to the networks, who in turn stick it to the MVPDs and their affiliates, who in turn stick it to us.

Talk about unnecessary roughness.

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-- Joe Flint

Photo: Denver Broncos quarterback Tim Tebow. Credit : Bruce Kluckhohn / US Presswire

Warner Bros. delivers for Time Warner in third quarter

Time Warner Inc. said it had third-quarter profits of $822 million,  much of driven by "Harry Potter and the Deathly Hallows: Part 2."

Harry Potter went out with a bang.

Time Warner Inc. said Wednesday it had third-quarter profits of $822 million, a 57% increase compared with the same period a year ago, and revenues of $7.07 billion, a jump of 11%.

Much of the gains were driven by the strong box-office performance of "Harry Potter and the Deathly Hallows: Part 2." The last chapter of the long-running Warner Bros. franchise took in $1.3 billion around the world. For the quarter, Time Warner's filmed entertainment unit, which also includes television production, had revenues of $3.3 billion, up 17% from the third quarter of 2010. Operating income went from $209 million to $528 million.

But Time Warner Chief Executive Jeff Bewkes was quick to tell analysts that Warner Bros. was more than a one-man show.

"It wasn’t all about Harry at Warner Bros.," Bewkes told analysts during a conference call Wednesday morning. "Contagion" and "Horrible Bosses" were also strong performers for the studio, as was revenue from reruns of its hit sitcom "The Big Bang Theory."

Even though the current television season is not even two months old, Bewkes expressed confidence that Warner Bros.-produced new shows, including the sitcoms "Two Broke Girls" and "Suburgatory" and the drama "Persons of Interest," would be long-term moneymakers for the studio.

"Our syndication pipeline is built," Bewkes said, adding that a hit comedy is still the "holy grail" of the television business, with the potential to become "multibillion-dollar annuities."

Although Warner Bros. is on a roll, Time Warner's Turner Broadcasting is still going through some growing pains. Overall, Time Warner's networks group, which includes HBO, had revenues of $1.09 billion, an increase of about 6%. However, operating income fell 4% to $1.09 billion.

Although the new TNT original series "Falling Skies" was solid and "The Big Bang Theory" repeats are delivering for TBS, much of the other programming on the two networks is struggling.

"TBS and TNT ratings were softer than anticipated," said Time Warner Chief Financial Officer John Martin.

Bewkes also hinted that Turner Broadcasting would be willing to kick the tires of the NFL, which has talked about introducing a new eight-game package. However, he stressed that he would only buy NFL rights if the company could make money on it, saying he wasn't interested in a loss-leader.

Bewkes also took a little shot at Time Warner Cable, the nation's second-largest cable operator, which was spun off from Time Warner a little over two years ago. During its recent earnings call, Time Warner Cable suggested that growth prospects for the premium channel sector, which includes HBO, was slowing.

That, Bewkes said, was "kind of a backward-looking statement they made."

Bewkes has been frustrated with Time Warner Cable for not launching a new HBO service that allows subscribers to watch the channel on their iPads. Cablevision, another large cable operator, is also yet to sign a deal for the service, which is called HBO Go.

Although Bewkes did not call out either cable operator by name, he said he was "hopeful for their sake" that HBO Go would be available to their subscribers in the next few months.

-- Joe Flint

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Photo: Daniel Radcliffe in "Harry Potter and the Deathly Hallows: Part 2." Credit: Warner Bros.

NFL considers Spanish-language version of RedZone channel

Mark_sanchez 
The NFL is considering creating a Spanish-language version of its RedZone channel, a person with knowledge of the matter said.

Although the plans are still in the early discussion stages, the NFL has become very aggressive in courting Hispanic viewers, which it sees as a valuable part of its fan base.

Launched by the NFL at the start of 2009, RedZone is a companion channel to its NFL Network. It operates only on Sunday afternoons during the football season and offers live coverage of every game whenever a team is on the verge of scoring.

NFL RedZone is particularly popular among those who play in fantasy football leagues. The network offers up-to-the-minute statistics as well as highlights. Most cable operators offer the channel on a specialty tier along with other sports networks. The NFL does not say how many homes the channel is available in, but it is offered by most Multichannel video program distributors.

The NFL, which has a partnership with Spanish-language broadcaster Univision, made a big push to help promote Hispanic Heritage Month this fall, with each NFL team saluting Hispanic culture during a home game.

-- Joe Flint

Photo: New York Jets quarterback Mark Sanchez. Credit: Getty Images

ESPN cuts new football deal as sports rights fees keep rising

NFL

The Super Bowl is five months away, but after the National Football League's regular season starts Thursday night in Green Bay, the countdown will begin, and fans will start obsessing about the big game.

There is a similar obsession going on about the next round of television negotiations between the NFL and the networks that carry their games. Although the current contracts that CBS, NBC and Fox have with the league still have two years to go, the NFL would like to have new long-term contracts in place by the end of this season.

Indeed, Walt Disney Co.'s ESPN -- home to "Monday Night Football" -- extended its deal through 2021 for the franchise on Thursday morning. The new deal will cost ESPN $15.2 billion or an average of $1.9 billion per season, according to people familiar with the deal. ESPN had been paying an average of bout $1.1 billion per-season under its current deal.

“Today, we’ve secured cable’s most valuable television franchise, along with an enhanced international package of year-round multimedia rights," ESPN President George Bodenheimer said in a statement. "It will help grow our business well into the next decade."

The new deal may also mean that ESPN will look to charge the distributors that carry its programming even more. ESPN is already one of the most expensive channels on the dial.

The other networks that carry the NFL will face similar increases. News Corp.’s Fox shells out $730 million annually and CBS ponies up $625 million for their Sunday afternoon games. All three could end up joining ESPN in paying 10 figures per season by the time their next contracts expire.

“It’s not for the faint of heart,” said Fox Sports Chairman David Hill when asked about the next round of NFL negotiations.

The numbers have gotten so big that even some of the NFL’s own are wondering if a reality check is in order.

“I think the NFL as a league should be very concerned about the costs of carrying their games getting almost obscene,” said Art Modell, the former owner of the Cleveland Browns and Baltimore Ravens who chaired the NFL’s television committee for three decades. The 86-year-old Modell noted that the NFL has a “tremendous grip” on the American public that it “can’t screw up,” or “take advantage of” by gouging the networks. Asked how his thoughts would play in a meeting with today’s NFL owners, Modell cracked, “They’d run me out of the room.”

Sports rights have become so expensive in part because ratings for just about everything else on television have diminished over the last two decades. Viewers are not watching nearly as much live television, choosing instead to record their favorite shows on their digital video recorders and watch them on their schedule, usually with the ability to skip commercials.

But some distributors are wary of the rising costs and fear that subscribers who aren't obsessed with who wins the big game will look to save money by cutting the cord to their pay-TV distributor.

“In this last quarter our industry has probably lost about a half-million subscribers,” said Derek Chang, an executive vice president at satellite broadcaster DirecTV. “What do you attribute that to? Most people are attributing it to the affordability of the product.” Chang said all sides are aware of the challenges that come with skyrocketing sports rights deals, but “we as an industry are sort of like the federal government kicking the problem down the road."

Chang and other distributors advocate  putting some sports networks on a separate tier so not all consumers have to foot the bill.

“It is valuable programming, but it is only valuable to a subset,” said Chang, who warned that the leagues and networks are “taking us down a dangerous path.”

Programmers will oppose a so-called a la carte offering of their channels because without wide distribution, they can’t charge advertisers as much and –- they argue -– would have to raise their subscriber fees even more to make up for the lost households. Industry analysts think programmers have the distributors over a barrel.

“The problem is the cable operators don’t have a great deal of leverage,” said Marc Ganis, president of SportsCorp, a consulting firm. ESPN and other sports channels have highly desired content and a vocal constituency. Cable operators, Ganis added, “complain about increased rights fees, but often they are complaining to justify their fees and make a larger profit.”

RELATED:

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Lockout is over, but questions remain for new season

Dwyre: It's back to basics and buzz as NFL starts up in Green Bay

-- Joe Flint and Dawn Chmielewski

Photo: Green Bay Packers ' Aaron Rodgers gets ready to unload the ball. Credit: Jeff Sainlar/Milwaukee Journal/MCT.

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