NFL’s ‘TNF’ deal shows power of live sports
|CBS describes its $225M deal for “Thursday Night Football” as financially responsible.
> $450 million per year? What about the sports rights bubble everyone talks about?
This deal shows that if a sports rights bubble does exist, it’s not going to pop for a long time.
When the “Thursday Night Football” news broke last week, I couldn’t help to think back to CBS honcho Leslie Moonves’ November appearance at our media conference. Speaking of the “TNF” negotiations, Moonves said, “[The NFL uses] their leverage appropriately, and you take it with a smile because, guess what, you need the NFL.”
Last week’s $450 million deal shows the power live sports still has in the television business. Think about it. The NFL convinced two networks to pay $225 million each for the rights to produce just five games that they can’t have exclusively — they have to be simulcast on the NFL’s cable channel. The networks not only have to share the package with NFL Network, but the league also is in the process of selling streaming rights for that package. Not only that, but CBS and NBC have to produce four games each that will be carried exclusively by NFL Network.
CBS Sports Chairman Sean McManus described the deal as financially responsible, and NBC Sports Group Chairman Mark Lazarus said NBC expects to recoup its investment through ad sales.
> What other networks showed interest?
No other TV network came in with an offer that was close to CBS or NBC.
Sources confirmed that ESPN did not submit a bid. Fox showed interest, but it wasn’t close to getting the package. Fox submitted an offer to pick up an eight-game package (it did not go below eight games) for between $200 million and $300 million. And sources said it was not willing to use its A-team for the Thursday games, unlike NBC (Al Michaels/Cris Collinsworth) and CBS (Jim Nantz/Phil Simms).
Turner Sports executives told the NFL that it would not bid on a two-year package; it only is interested in a longer-term one.
CBS and NBC were the clear front-runners from the start of these negotiations, and the NFL made it clear early that it wanted to split the rights between at least two broadcast networks.
> Why was the NFL so insistent on splitting the package?
The league believes it still has a big opportunity to grow the profile of “Thursday Night Football,” especially with two of the top broadcast networks marketing it. CBS will market the games on its top-rated prime-time schedule, and NBC will market them during this summer’s Olympic Games, which are expected to bring in huge ratings.
“With our broadcast deals, we’re expanding our reach,” said Hans Schroeder, the NFL’s senior vice president of media strategy, business development and sales. “By adding a digital partner, we’ll be able to take it to the next level.”
> What’s up with the “TNF” digital rights?
The NFL is negotiating with digital media companies, including Amazon, Google’s YouTube, Apple and Yahoo, for a deal to stream the “TNF” package, and Schroeder said the league is considering splitting that package between several companies. “It could be more than one,” he said. A deal should be finalized in the next few weeks. While several sources described Amazon as particularly aggressive early on, it’s too difficult to determine the digital front-runners right now.
> Why aren’t the TV networks more upset about the NFL selling “TNF” digital rights separately?
TV network executives don’t like it, but one told me the NFL’s OTT plan was not a deal killer because the streams aren’t expected to bring a big audience. Yahoo, for example, averaged “only” 2.36 million viewers for its exclusive stream of an NFL game from London last season. Plus, the digital streams will carry all of the TV advertisements, meaning that the networks will be able to sell advertisers on the incremental bump expected to come from the digital audience.
> Even if the digital numbers aren’t huge, won’t an OTT package hurt the TV package?
The NFL believes that digital streams will attract an audience that would not typically watch an NFL game on television. “One of our learnings from Yahoo’s London stream is the type of audience you get incrementally from digital,” Schroeder said. “I’m tremendously excited by the global aspect of this. But we’re also going OTT with games here domestically and reaching a U.S. audience as well. It helps us build the overall profile of ‘Thursday Night Football.’”