NFL’s pause on package of games surprises networks
The NFL’s decision to hold off on awarding a new TV package for at least a year surprised TV network executives, who originally believed the league was one or two months away from cutting a deal.
“I was shocked,” said one network executive. “I really thought that would be the next deal that they would do.”
Up to four TV networks were having informal talks with the NFL about a new Thursday night package of eight games during the first half of the season. The package of games was never officially on the market. The NFL started the informal conversations to gauge interest in the package. But several network executives were expecting talks to heat up as soon as the league finalized its “Monday Night Football” extension with ESPN.
NFL Commissioner Roger Goodell squashed that idea Sept. 8, during a press call announcing the league’s $15.2 billion extension with ESPN. Goodell said that rather than coming before the NFL extends its broadcast deals with CBS, Fox and NBC, any new eight-game package still was a long way from reality.
“It’s not likely that we would do it in the next year,” Goodell said. “We’re going to continue our discussions with our current partners and evaluate aspects of our new labor agreement as part of that. [We’re going to] make what we expect to be the best decision for our fans, for our 32 clubs and for our partners.”
That means that the league will renew its broadcast packages, which expire at the end of the 2013 season. League and media sources expect each of those packages to command more than $1 billion a year in their new contracts and come close to the 73 percent increase that ESPN agreed to pay.
A league source said the decision to wait a year before awarding the new eight-game package is partly a result of the NFL’s decision not to increase its schedule to 18 games.
With an 18-game schedule, the league would have enough new game inventory to create a new TV package. The only way to carve out a new package with a 16-game schedule would be to take games away from CBS and Fox’s current packages, which could be problematic as the league goes back to those networks in renewal talks. Because of this, a network source said the league would not launch a new TV package until 2014 at the earliest, once its new TV deals take effect.
The proposed eight-game package already has drawn a lot of interest from cable channels, who view highly rated NFL games as the surest way to increase distribution and affiliate fees. The NFL has had informal conversations about it with Comcast, ESPN, Fox and Turner. Comcast is interested in putting the package on Versus, which will be renamed NBC Sports Network in January; Fox is kicking the tires for FX.
Goodell started having initial conversations about the package soon after the league’s labor situation was resolved. The idea was to add eight early-season Thursday night games to complement NFL Network’s eight-game package during the second half of the season. Sources suggest the NFL could command around $700 million for such a package.
One idea that had been discussed involved the future of the NFL Network. The league was considering giving up management responsibilities or an ownership stake in the network. Turner uses this model in its NBA contract; Comcast uses it with the NHL.