Industry analysts "estimate" that CBS made $150M from
its NFL deal this year, while ABC lost "at least" $150M and
Fox made a "modest profit," according to Diane Mermigas of
ELECTRONIC MEDIA. CBS President/CEO Mel Karmazin: "We made
more than we thought we would." Analysts note that CBS's
"football math is complicated," as figures are "predicated
mostly on how it accounts for its first-year costs." CBS
made "only" $300M in cash payments in the first year of its
NFL deal, rather than the $500M in equal annual payments "it
could make" over the eight-year contract. CBS also "wrote
off about" $430M in rights fees "so as not to show an
inordinately large gain" on the first year games and "bigger
losses" at the end of the contract. Fox Entertainment Group
President/CEO Peter Chernin said that Fox "made money" on
the first year of its NFL deal, but would not "elaborate on
how or how much." Merrill Lynch analyst Jessica Cohen
estimates that Fox generated "up to" $190M in gross revenues
on Super Bowl Sunday and ended the season earning "nearly"
$30M. ABC has the "dimmest first year" of the NFL deal, as
Cohen expects the net to lose $150-200M due to $150M "more
in rights fees under the new contract" and "lower ratings."
Mermigas notes that ABC chose to "front load" its NFL-
related payments "so it can realize bigger profits at the
end of its contract" (ELECTRONIC MEDIA, 2/22 issue).
