SBJ/November 27 - December 3, 2006/This Weeks News

ESPN, AFL work on details

The Arena Football League is in serious talks with two networks about a national media rights deal just over two months before it kicks off its regular season.

ESPN would grab a stake in the Arena
Football League as part of the media
rights deal that’s being discussed.

The most likely scenario has ESPN taking an equity stake in the league and building a yearlong platform around football on Monday nights. Both sides are said to be hammering out the details, but caution that a deal still is several weeks away.

Such an equity play deal would make sense for ESPN, which is looking to grow properties through low-risk deals. The company wants to build up the league’s stature and ratings without the fear of having the property demand more in a rights fee during the next round of rights negotiations.

The AFL has approached the NFL Network with a secondary package of up to one game per week, but such a deal also is said to be several weeks away. This component would make sense as the NFL Network is looking for offseason programming, and currently four NFL owners own AFL franchises.

Though details are sketchy, ESPN’s equity stake would be different from the stake NBC had during its four-year agreement with the AFL that expired in June. That deal called for NBC to keep 5 percent of the AFL team sales or expansion fees that surpassed $12 million.

Other terms of that deal called for the AFL to reimburse NBC for production costs while NBC paid the AFL an undisclosed fee based on advertising sales.

Aspects of the potential AFL deal fit the mold executives in Bristol are using in most of their recent deals —  a heavy digital rights component that includes broadband and wireless rights. ESPN also could end up streaming games.

ESPN is prepared to put a heavy marketing push behind the AFL. It is considering something like a “52 weeks of football”-style campaign that would incorporate the NFL draft, preseason, regular season and postseason, and college offerings with its AFL inventory.

ESPN2 would air most of the AFL games on Monday nights, but it won’t use the “Monday Night Football” brand during the AFL games. Some games would be on ESPN, with only a few games on ABC. In the current talks, only the season opener and the championship game would be slated for ABC.

“We’ve been in discussions with multiple networks and we are deep into discussions with some and expect to have some news within the next 30 and 60 days,” said AFL spokesman Chris McCloskey. “ESPN is somebody we are speaking with.”

The talks come at a time when the league’s ratings are down, but overall exposure increased as deals with Fox Sports Net added 52 regional games to go with NBC’s national coverage.

League officials said that 98 percent of AFL games in 2006 were on television.

Last year, NBC’s AFL ratings dropped 20 percent to a 0.8 rating, the first time in four years it was below a 1.0. Competing networks point to those numbers as a reason for shying away from a deal.

The AFL added Comcast-owned OLN — now Versus — at midseason to pick up the loss of programming on NBC due to the Winter Olympics. Versus made an initial bid but has not pursued it. Meanwhile, the league is talking with Fox Sports Net and Comcast’s RSNs about a regional agreement.

“We’ve had some very significant, detailed conversations, but that doesn’t mean that a deal’s imminent,” said John Wildhack, ESPN senior vice president of programming and acquisitions. “There’s still a long ways to go.”

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