The NFL is about to kick off the second-to-last season on the current deal with its broadcast partners. After this season ends, negotiations for a new deal are expected to begin in earnest.
Already there have been numerous reports that ABC is losing $150 million a year on “Monday Night Football” and may decide not to renew the high-rated franchise. One scenario has “MNF” moving to ESPN, with ABC possibly taking ESPN’s Sunday night package.
ABC released a statement saying it has been talking to the NFL, but it wouldn’t conduct serious negotiations until after the season.
“I’m not sure why they put out that statement. We’ve talked to ABC before they issued that statement and after they issued that statement about what they’re interested in going forward,” said Steve Bornstein, president and CEO of NFL Network, who worked at Disney and ABC before joining the NFL. “They have issues, and this is sort of lumped in.”
“Everyone’s negotiating in the press about how expensive football is, but I don’t think anyone denies the power of NFL. It’s in 60 million homes every week,” said sports consultant Neal Pilson. “No other sports or entertainment property comes close to that.”
Mr. Pilson, a former president of CBS Sports, said ABC has a problem making “MNF” work. “ESPN loves the NFL-it helps them sustain their $2.40-per-subscriber sub rate. I think Disney is looking at the possible shift of `MNF’ to ESPN. If they did make that, that would possibly open up Sunday night on a less-expensive basis for ABC or NBC or Turner or some other dark horse that nobody’s thought of yet.”
Fox and CBS are widely expected to try to renew their packages with smaller increases than in the past.
“They’re not going to get any kind of a double,” said John Mansell, senior analyst at Kagan Research. ” They’re still a year away, so the ad market and the business cycle could change. I would expect them to get [an increase] in the low double digits.”
Another source of increased TV revenue for the NFL would be to allow cable operators to offer the NFL Sunday Ticket package of out-of-market games. DirecTV now offers NFL Sunday Ticket, but its exclusive arrangement ends after the 2006 season. “Cable operators definitely lust after Sunday Ticket,” said Mr. Mansell, who estimated that if digital penetration reaches 50 million homes, the NFL could generate another half-billion dollars.
A Comcast spokesperson confirmed that NFL Sunday Ticket “would be something we’d be interested in taking a look at.”
Mr. Bornstein said the Sunday Ticket talks are separate from the NFL Network carriage negotiations. “Everyone thought there was a fair amount of linkage going into this. But there is no linkage,” he said. “Anything is open for discussion. We are now a year and a half away. This is when it starts heating up, but it’s not over till it’s over.”
What’s not open for discussion is the value of NFL programming, Mr. Bornstein said. “When I’m long dead and gone, I promise you I can predict what the No. 1-rated show will be on television in America. The highest-rated show will be the Super Bowl,” he said. “The second-highest-rated show will be the NFC championship. I do not know where `60 Minutes’ is going to be, I don’t know where the next `CSI’ is going to be, I don’t know where the next `Apprentice’ is going to be. That’s a pretty unique position to be in.”