Sat, Jul 31, 2004 - Page 20 News List

Networks enter annual battle to carry NFL games


It is time again for the ritual cash dance between the NFL and the television networks that desire to keep carrying its games.

Every league dances with networks, but the NFL's tango is the most interesting. It is the highest-rated sport and generates the most money.

Networks build their reputations around carrying the NFL (think Fox) and discover how much they need and love it when they do not have it (think CBS).

In 1998, just days after the last negotiation, David Hill, chairman of the Fox Sports Television Group, said: "The NFL represents the only firm ground in an increasingly scary swamp. It's the one safe bet, the only thing in the network business that makes sense."

The dance usually begins as much as a year before old deals expire, which is where we are now: CBS, Fox, ABC and ESPN are entering the penultimate season in the eight-year deals that will pay the league nearly US$18 billion when they conclude.

But before talks begin, ideas are floated and suggestions are made as the NFL searches for ways to alter its offerings so it can make more money.

Call it due diligence or call it dreaming, but the league believes its product is so strong it will always find ways to get the networks to pay up.

This is also a time for networks to posture about how much they will tolerate paying and how far they will go before saying goodbye. In 1994, CBS said farewell, regretted the decision immediately and returned in 1998. NBC bowed out in 1998 and ever since has preached the Tao of fiscal prudence that led it to make no-risk revenue-sharing deals with the Arena Football and National Hockey Leagues.

The early phase of the cash dance has yielded a few trial balloons:

-- Move the starting times of Sunday afternoon games an hour later, to 2:15pm and 5:15pm. While such a move may yield more viewers, it would cause the networks (right now CBS and Fox) to lose more than an hour of prime-time programming. For years, the late games have delayed the start of 7 p.m. programs like CBS's "60 Minutes," but beginning prime time at 8:30pm would be asking too much of the networks.

-- Let ESPN take over "Monday Night Football" and have ABC carry the Sunday night game. ABC, the fourth-ranked network in prime time, needs all the hits it can get, and losing "Monday Night Football" would be a huge risk, even an embarrassment, given that ABC transformed the sports landscape when Roone Arledge created and developed the program. If ABC carried football on Sunday night, the game would have to kick off by 8:30pm Eastern, and ABC's one-year experiment with an early start to "Monday Night Football" was a disaster.

A more crucial consideration is how far the Walt Disney Co., which owns ABC and ESPN, will go to let ABC stay in professional football. The desire is to keep it, but at what price? ABC is believed to be losing more than US$150 million annually on "Monday Night Football," on an average rights fee of US$550 million. Even a modest increase in rights fees would likely increases losses.

-- Create a new, late-season Saturday night cable package. This may be the best way for the NFL to draw new capital on top of what are likely to be relatively small increases for the incumbent networks. This would carry three risks: building a new audience for pro football on the night with the fewest viewers, cluttering a crowded market for NFL advertising and overexposing the product by adding another day to the schedule.

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