NFL Network Sells 90% of Advertisements Before Raiders-Chargers Take Field

The NFL Network begins its eight- game broadcast schedule tonight from a position of growing strength.

The National Football League’s network, which debuts its telecasts with a game between the Oakland Raiders and San Diego Chargers, opens the season with its widest distribution since it started airing live games in 2006. The network has attracted a record 32.1 million viewers to the season’s first nine weeks, after ratings increased almost fourfold during the free-agent signing period.

David Pattillo, the NFL’s vice president for media sales, said the network had sold as much as 90 percent of its advertising inventory ahead of the games, particularly in the automotive, retail and food categories, while trying to save some space for the end of the season and high-demand games such as the Thanksgiving holiday showdown between current division leaders San Francisco 49ers and Baltimore Ravens on Nov. 24.

“You don’t know if you have lightning in a bottle until about two weeks before,” he said in a telephone interview. “We’ve been judicious about preserving the later part of our schedule.”

The NFL Network offers some of television’s most-valuable content, as measured by the fees cable or satellite companies pay for distribution rights, according to a 2011 report by Anthony DiClemente, an analyst with Barclays Capital Inc. The network gets about 73 cents a subscriber, making it the fourth- most expensive in the U.S., ahead of Fox News’s 70 cents and behind the Disney Channel’s 91 cents. ESPN gets the most, with $4.40, DiClemente wrote, citing data from Barclays and SNL Kagan.

Price Wars

After years of feuding with multichannel operators over pricing, the network is now in about 60 million homes, about half of U.S. homes with televisions according to Nielsen Holdings NV, and carried by seven of the eight largest television providers. The league and Time Warner Cable Inc. (TWC), the second-largest U.S. cable provider, still haven’t reached a deal, according to NFL spokesman Dan Masonson.

The channel’s increasing reach means more revenue from affiliate fees and advertising sales, DiClemente said, and more leverage for the NFL when it negotiates television contracts. Almost half of the league’s projected $9.3 billion in revenue comes from broadcast deals with companies including CBS Corp. (CBS), News Corp. (NWSA)’s Fox, Walt Disney Co. (DIS)’s ESPN and DirecTV. (DTV)

“Because the NFL has the NFL Network, and it has had some degree of success in terms of distribution, it gives them leverage in talks with broadcasters,” DiClemente said in an interview.

Lockout Interest

To broadcast the games, the network has assembled an announcing team that includes Mike Mayock, Brad Nessler and Alex Flanagan. Mark Quetzal, senior vice president, said the four- month lockout that delayed NFL offseason events helped draw people to the network’s news, and led to pent-up interest that generated higher ratings when players and owners reached a new collective bargaining agreement and the league re-opened.

“We hit sort of a threshold moment right after the CBA was signed,” he said. “I look at the numbers -- the ratings were through the roof -- as being attributed to the fact that a lot of people just didn’t know about the NFL Network.”

The free agency period following the lockout included a three-day period in which the network’s average daily viewership increased 288 percent over the previous year, the NFL said. In 2010, the eight Thursday night games were watched by a record average of 7 million viewers. The Pittsburgh Steelers-Ravens game on Comcast Corp.’s NBC broadcast network Nov. 6, in comparison, drew an audience of 22.1 million.

Rights Fees

Until the network is able to deliver an audience of that size, the NFL will make more selling rights fees than broadcasting its own games, DiClemente wrote.

Still, DiClemente describes the NFL Network as “arguably, the most successful venture” in broadcasting of the four major U.S. sports leagues. AdAge reported last month that the NFL Network last year made about $90 million in ad sales revenue, up 38 percent from 2009.

Pattillo declined to discuss rates for commercials during game telecasts, saying they were “comparable” to those charged by the NFL’s broadcast rights-holders.

“It’s the same eyeballs,” he said. “We’ve kept our rates in complete lockstep with every broadcast partners.”

Pattillo said the network’s games offer advertisers Thursday night’s leading cable attraction, going into the U.S.’s holiday shopping weekends.

“We’re a sports league and now we’re becoming a vertically integrated media company that has a sponsorship arm,” he said.

To contact the reporters on this story: Aaron Kuriloff in New York at akuriloff@bloomberg.net; Curtis Eichelberger in Washington at ceichelberge@bloomberg.net.

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net.

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