SBD/Issue 167/Sports Media

NFL Near Extensions With CBS, Fox; NFL Net-Comcast Deal Close

If Broadcasters Agree To Extensions, CBS Will
Broadcast Super Bowl In '13, Fox In '14
The NFL is "negotiating to extend its television contracts with CBS and Fox by two years" through the '13 season, according to sources cited by Kaplan & Ourand of SPORTSBUSINESS JOURNAL. Also, the league reportedly is "on the verge of settling its long-running dispute with Comcast" over distribution of NFL Network, and the "two sets of negotiations are linked." The NFL "approached CBS and Fox in March about extending their deals through 2013, with the talks coming shortly after the NFL renewed DirecTV’s Sunday Ticket deal and disclosed plans to make the Red Zone Channel available to cable." Sources said that the extensions are "close," with the nets likely agreeing to a 3-5% increase "over their current rights deals." That increase "would be in line with previous" extension negotiations in '04. If the broadcasters "agree to the two-year extensions, it would ensure" that CBS would broadcast Super Bowl XLVII in '13 and Fox would carry Super Bowl XLVIII the following year. Meanwhile, Kaplan & Ourand note the NFL Net-Comcast deal "would be much more surprising, given the public acrimony between the NFL and Comcast over the past year." Sources indicated that the NFL dropped its $0.70 per subscriber license fee "significantly in order to get digital-basic penetration, the same tier that houses MLB Network." Though a deal has yet to be signed, sources said that Comcast "would not take equity" in NFL Net as part of the agreement. Once Comcast, the nation's largest cable operator, signs a deal, other MSOs "generally will fall in line." In addition, sources said that NBC "eventually will sign a two-year extension" through '13 to broadcast "Sunday Night Football" games, though "it's not known whether a Super Bowl would be part of that extension." Sources suggest that the league is "looking to shore up its media deals before its labor issues come to a head" (SPORTSBUSINESS JOURNAL, 5/18 issue).

IN-GAME STRATEGY: SI.com's Peter King noted extensions with Fox and CBS allowed the NFL to "move close to a deal with Comcast, because the league could give the cable giant a valuable chip in the Red Zone Channel to use on Sundays." Part of the NFL's "motivation to deal with Comcast and the networks, surely, was its desire to be able to use the Red Zone Channel on cable instead of only on satellite, and NBC wasn't part of the Red Zone deal." NFL Net sources "feared that without wider distribution, some owners tired of the five-year fight for wider distribution of the Network would have soon moved to kill the channel in the current bad economy." King reported NFL Commissioner Roger Goodell has been the "key player in the deal from the NFL side," working with Comcast Chair & CEO Brian Roberts "to bridge the major differences between the two sides." King added it "could be that the league is intent on getting the deal done with Comcast first, then moving on to the second-biggest of the Big Cables, Time Warner, with the framework of a concept in place" (SI.com, 5/17).

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