SBJ/September 26-October 2, 2011/Media

Splitting smartphones, tablets helped pave way for NFL-ESPN deal

The NFL and ESPN agreed on the broad terms of a media rights extension in January, but they didn’t sign the deal until eight months later, in early September.

One of the holdups was a question over mobile rights — just what ESPN could acquire and which ones were controlled by Verizon. At issue was the NFL’s four-year, $720 million sponsorship deal the league signed with Verizon last year that gave the telecom company exclusive rights to stream NFL Network and NBC-produced games to mobile phones.

The NFL’s solution: Verizon maintains exclusivity to stream to mobile phones, but ESPN was allowed to pick up wireless rights to devices that do not have phone capabilities, like tablets. ESPN is making that programming available to authenticated cable subscribers as part of the cable industry’s TV Everywhere initiative.
The NFL has seen a 230 percent increase in downloads for its NFL Mobile app.

Verizon now has the right to stream “Monday Night Football” to its mobile phone subscribers, regardless of whether they subscribe to a cable or satellite service. Verizon had not streamed “Monday Night Football” to mobile phones until this season.

“When you talk about other wireless distribution devices and the different approaches we have, I expect to continue to work with a number of different partners,” said Hans Schroeder, the NFL’s senior vice president of media strategy and development.

Verizon is not upset by the NFL’s decision to create a distinction between wireless phone rights and wireless tablet rights, a Verizon spokesperson said, adding that the issue illustrates how quickly things change in the wireless market.

Schroeder
The difficulty also highlights the challenge that rights holders are having with the fast-moving digital marketplace. Apple launched its iPad tablet in April 2010, a month after the NFL signed its exclusive mobile deal with Verizon. The popularity of the tablet essentially created a new bucket of rights — wireless rights to tablets, as opposed to wireless rights to mobile phones — that the league could monetize.

The NFL made sure the ESPN deal contained language that accounted for rights that are not imagined yet.
“We needed to put in a longer-term strategy,” Schroeder said. “We are very excited about our Verizon relationship.”

The wireless/mobile business has been a huge area of growth for the league. The league has seen a 230 percent increase in the number of downloads for its NFL Mobile app (4.5 million). Its mobile Web consumption hit 56 million page views during kickoff weekend (up 380 percent from last year). And the amount of downloads for the NFL 11 app on tablets and phones is near 2 million, up 150 percent from last year.

“Mobile, in general, is an incredible area of growth this year,” Schroeder said. “We think that we can continue to grow that.”

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