SBJ/20090323/This Week's News

Adding more NFL games no sure thing

As NFL owners meet this week in Dana Point, Calif., they are expected to discuss expanding the regular season by one or two games. While Commissioner Roger Goodell has been vocal in his support of eliminating some preseason games to support an expanded regular-season schedule, the owners are not expected to approve any changes this week.

On its surface, the plan for more regular-season games is appealing to fans and seems as simple as redrawing the league’s schedule. However, any extension will be much more difficult than most realize. From a commercial perspective, many question whether there would ever be enough advertising to support a longer schedule.

“It is not as attractive to the networks as you might think,” said media consultant Neal Pilson, who ran CBS Sports when it carried the NFC package in the late 1980s. “I would not be jumping through hoops to get this done.”

NFL rights holders CBS, Fox and NBC have contracts covering the next three seasons. ESPN’s deal ends in 2013. While any negotiations might seem premature, recall that last time around the NFL announced rights agreements with CBS and Fox in November of 2004 for a deal that didn’t begin until the 2006 season. NBC’s NFL deal was announced more than a year before it took effect.

NFL Players Association looks
to future after electing new
executive director, click here

The networks would certainly agree to an expanded NFL schedule if they believed advertising dollars would grow accordingly. However, reaction among the ad community is mixed, though many admit they are looking at a possible extended NFL season through the dark lens of the recession.

“In this marketplace, no one is looking to add inventory,” said Tom McGovern, managing director of Optimum Sports. “If you build it, [advertisers] don’t always come.”

There are likely to be on-field concerns as well. At a time when collective bargaining issues are paramount, player support of additional games seems problematic. It’s unclear how the new leadership at the NFLPA feels about adding regular-season games, but the late Gene Upshaw was not in favor of it. Coaches and players also need to balance the likelihood of higher wages versus the additional strain of more regular-season games. With a son playing in the NFL, former AFL Commissioner David Baker now has firsthand experience on the tradeoff. “At some point, you get concerned not just about making money, but how much wear and tear a body can absorb,” he said.

There are other arguments for maintaining the status quo.

“My client, John Madden, will argue that teams won’t be ready with only two preseason games,” said Sandy Montag, IMG senior corporate vice president, “but obviously, there are financial reasons pushing this.”

Even with most of the NFL’s broadcast rights agreements not expiring for three more seasons, and even if the economy recovers, ad support is uncertain. Auto manufacturers are traditionally the biggest advertising category and there is no guarantee that market will stabilize in time to support an expanded schedule.

“[Auto] is the category that’s most challenged and it will be for the longest period of time,” McGovern said.

Tony Ponturo, who ran Anheuser-Busch’s sports marketing and media budgets, agreed. He noted that the networks did not sell out their NFL packages last year and are unlikely to do better this year.

“We’ve all watched businesses break a little bit in the current economy, so you wonder about keeping what you have healthy,” he said. “It may be a time when broadcasters have to examine whether it’s worth having the NFL as a great showcase for their other programming.”

Others, however, say these views are too pessimistic and colored by the recession.

“You worry about the long-term effect problems in financial and auto will have on their willingness to advertise,” said Peter Gardiner, partner and chief media officer at Deutsch, which has sports clients including DirecTV and Sports Authority. Still, “The NFL is the one league that could expand their schedule and not hurt their ratings,” he added.

Assuming the NFL Network schedule stays intact, many believe adding games will be the only way the league can increase broadcast rights fees.

“When you max out everything else, you increase inventory,” said Ray Warren, executive vice president and chief revenue officer at Comcast Sports Group. “[But] the networks will be hurt by this. Just because there is a bigger rights fee and more games doesn’t mean demand in the ad market will expand to support it.”

As America’s top-rated television sport, the impact of more NFL on other properties would not be insignificant.

Former Turner Sports chief Mark Lazarus, now with Career Sports and Entertainment, says any increase in games would siphon ad dollars from sports like college football and baseball.

“There’s not going to be new money coming into the NFL,” Lazarus said. “It will be coming from other places.”

Even on a club level the issue is complex. “Obviously, the league has to replace local broadcast revenues [from preseason games] and those relationships are often the basis for larger deals with your local cable entity, so it’s just not as easy as it might seem,” said Bob Reif, whose Audible Sports and Marketing handles sales for the St. Louis Rams.

Rick Singer, longtime sponsorship chief at IBM, an NFL corporate sponsor since 2003, said it’s a simple equation. “It’s whether 10 percent more inventory will produce more than 10 percent more revenue,” Singer said. “From an advertiser’s perspective, I’d say more supply would moderate prices.”

The NFL would also have to figure how to value the package. ESPN, for example, pays $1.1 billion for 16 regular-season games, an average of $68 million per game. Would the NFL expect ESPN to pay another $136 million for two extra weeks of games? Or would the NFL create a new package?

“There will be a lot more media platforms involved,” said Deutsch’s Gardiner. “It will be like the Olympics, where digital rights have a much more meaningful impact on the overall rights package.”

Return to top

Related Topics:

This Week's News

Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug