Analysis: NFL, TV still happily married

By PAT NASON, UPI Hollywood Reporter  |  Nov. 9, 2004 at 7:28 PM
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LOS ANGELES, Nov. 9 (UPI) -- The new TV deals announced by the National Football League indicate that NFL football is still one of the strongest attractions in TV programming, and network executives are willing to pay premium prices for broadcast rights.

CBS and Fox have agreed to pay the NFL 25 percent more than they're paying under the current deal, which expires following the 2005 season. But even though the networks are paying more money, they are conceding to the league the flexibility to take attractive late-season match-ups from CBS and Fox -- to air either on "Monday Night Football" or as part of a new eight-game cable or satellite package.

The new agreements will run through the 2011 season, with CBS continuing to televise the AFC package that it acquired in 1998 and Fox staying with the NFC package that it acquired in 1994.

The NFL also announced a new $3.5 million deal with the pay-per-view service DirecTV to continue carrying its Sunday Ticket package through the 2010 season. That deal is worth 75 percent more than the league's current $2 million deal with DirecTV.

By agreeing to let the league switch the TV schedule around late in the season, CBS and Fox would seem to be paying more money for a less attractive package than they have been getting.

The new deal allows the NFL to take four late-season games from each network for the new cable or satellite package, probably on Thursday and Saturday nights. It also allows the league to take as many as seven late-season Sunday games from Fox and CBS, to make the match-ups on "MNF" more attractive.

The league has not agreed to terms yet with ESPN for its Sunday games, or with ABC for "MNF." The Disney-owned broadcasters have exclusive negotiating rights for those games for several more months, but the Los Angeles Times reported that NBC is said to be interested in acquiring the Monday night package -- and may also bid on the Thursday-Saturday cable package.

George Bodenheimer, a programming executive at ABC and ESPN, told the paper he plans to retain the packages his company currently holds right to.

"As we've been saying, our intent is to retain the Sunday and Monday night packages," said Bodenheimer, "and we will continue our ongoing conversations toward that end."

Fox's current deal works out to an average payment to the NFL of $550 million a year. That goes up to $712.5 million a year under the new contract.

CBS currently pays an average of $500 million. The new deal calls for an average annual price tag of $622.5 million.

Fox reported it lost $387 million on its NFL telecasts in 2002, according to the Times. But Peter Chernin, Fox president and chief operating officer of the network's parent company, News Corp., told the paper those losses were attributable to a general decline in advertising.

"The NFL is the strongest sports franchise on television and has helped build and sustain Fox as a broadcast network in a variety of ways since 1994," Chernin said. "Having what is clearly the highest-rated sports series on television is very exciting to us."

Chernin said the NFL does not want its broadcast partners to lose money.

CBS Chairman Leslie Moonves also said he expected the deal to be profitable for his network.

"We made money on the last deal," he said, "and we'll make even more money on this deal."

A consequence of the new deals could be higher player salaries, as the increase in TV revenue will result in higher salary caps for all 30 teams in the NFL. But the additional revenue from the new television deal should have a positive effect on collective bargaining negotiations, league and network officials say.

Each team currently gets $73.3 million a year. The salary cap is in the neighborhood of $80 million.

The new deal also gives CBS and Fox two Super Bowls each between 2006 and 2011.

The NFL is clearly the prime sports attraction on network TV today, judging from the amounts of money that professional sports leagues are able to charge for broadcast rights.

Major League Baseball derives about $360 million each year under its current contracts with Fox and ESPN. The NBA takes in almost $570 million a year from ABC, ESPN and TNT. NASCAR gets about $400 million a year from Fox and an NBC-TNT partnership.


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