NFL Broadcasting-Rights Package: A $18.6 Billion Bet for the Future

Strategic Insights -

The latest NFL broadcasting-rights package has sparked a heated debate over whether the networks are risking a financial disaster or securing a lucrative deal. As the networks CBS, ABC, ESPN, and Fox prepare to shell out $18.6 billion for the next eight years, executives on both sides of the argument are making their cases.

CBS Sports president Sean McManus believes the network's $500-million-per-year bid for the AFC rights was responsible and won't hurt the bottom line. "You'd bet on the NFL," McManus said, citing the Super Bowl's consistent high ratings. On the other hand, NBC's Dick Ebersol believes the networks are making a "reckless folly" with their bids.

Key Takeaways:

  • The NFL broadcasting-rights package will cost networks $18.6 billion over the next eight years, with CBS paying $500 million per year for AFC rights and ABC and ESPN paying a collective $1.15 billion per year.
  • Monday Night Football will start an hour earlier at 7 p.m. Central, and Sunday doubleheaders will start at 3:15 p.m. instead of 3:05 p.m.
  • Expect more commercials, with additional 30-second spots per game, which will lead to higher cable TV bills for consumers.
  • Some industry insiders predict that cable rates could increase by as much as 50 cents per month.
  • NBC, despite its initial hesitation, has a strong argument for buying football rights, as losing "ER" would be as devastating as losing "Monday Night Football" would be to ABC.
  • Fox established the trend of overpaying for NFL rights in 1993 when it paid $395 million per year for the NFC rights.
  • The Sunday night package on cable cost more than the Monday night package on ABC because the combined rights fee was higher due to the power of cable negotiations.
  • ESPN will move "Sunday Night Baseball" to ESPN2 in September and October to accommodate the NFL's exclusive cable package.

Statistics:

  • The NFL broadcasting-rights package will cost networks $18.6 billion over the next eight years.
  • Monday Night Football will start at 7 p.m. Central, an hour earlier than its current start time.
  • The Sunday doubleheaders will start at 3:15 p.m. instead of 3:05 p.m.
  • Expect an increase in 30-second commercials per game.
  • Some industry insiders predict that cable rates could increase by as much as 50 cents per month.
  • NBC's "ER" cost $13 million per episode, a sign of the high cost of football programming.

Sources:

  • Philadelphia Inquirer DT Status: ADD NOTABLE DEATHS