Is This An End Run By The NFL?
Even as sports has splintered to dozens of TV channels, an estimated 100 million folks a week still catch an NFL game on the four outlets that collectively pay nearly $2 billion a year to televise them. That's because no one has a grind-it-out ground game like the NFL brass.
Case in point: On Nov. 4, the league will launch NFL Network, 24 hours of talk shows, highlight reels, and tidbits for pigskin junkies. With no regular-season games or even full-game classics of yesteryear, it hardly looks like a Nielsen ratings winner. So what's the strategy here? In 2005, when its $17.9 billion in TV contracts come up for renewal, the channel could give the NFL the clout it needs to keep TV execs -- worried about the high cost of sports -- from trying to get a price break.
"This is about promoting the NFL, sure, but it's also about leverage," says consultant Stephen J. Solomon, a former top ABC Sports executive. For the NFL, the game plan may go something like this: Get its channel carried on a big chunk of the nation's projected 90 million cable and satellite homes by 2005. If ESPN won't pay the NFL's price, Sunday night games would go to NFL Network. Or if CBS or Fox bargain too hard, the NFL could threaten to take away some of the games they air on Thursday and Friday nights. "By 2005, the NFL will have learned enough to show their own games," says sports biz professor Dennis Howard of the University of Oregon.
The NFL maintains it has no live-game strategy other than to run some pre-season and NFL Europe match-ups next year. "This is a channel for folks who can't get enough of the NFL now," says Steven Bornstein, the former ESPN chief who heads the league's media operations.
In any case, to create its new network -- not to mention fortifying any plan to one day carry games -- the NFL needs to enlist cable operators. And that has been the rub. Many are still sore that the league last year extended its Sunday Ticket deal with DirecTV Inc. The satellite outfit has used the package, which costs about $200 for up to 14 games a week, to siphon off cable customers. And the league is seeking a hefty fee for NFL Network -- about 25 cents per subscriber, or roughly what operators pay for MTV. That's why so far only DirecTV is carrying the channel.
Bornstein expects to sign cable operators before the launch -- although he says he isn't likely to cut prices. One option: Cable operators who sign on now will be given a shot at bidding on NFL Sunday Ticket after 2005, when DirecTV loses its exclusivity. And no doubt there are other possibilities in the NFL playbook.
By Ronald Grover in Los Angeles