NFL TV Rights Holders Still Seeing Green Amidst Potential Blackouts

Just two days before the Tennessee Titans visit the Pittsburgh Steelers to kick off the National Football League's 2009 season on NBC, television rights holders are not concerned about potential blackouts of regular season games. With the challenged economy, stadium sellout levels (as well as season ticket holders) will be down. And with that, under the NFL’s longstanding blackout policy, any NFL game that is not sold out by 72 hours before kickoff has the potential of not being televised in the local market of the home team.It’s unclear whether the lack of concern is wishful thinking on the part of the networks—CBS, ESPN, NBC, Fox and the NFL’s own NFL Network—or a desire not to rile up the NFL by publicly criticizing the league's unwillingness to change the blackout policy. CBS and Fox have some leeway, however, because on any given Sunday, the networks televise multiple regional games and can substitute in an out-of-market game if the scheduled local team's game does not sell out. ESPN, NBC and NFL Network, which each televise only one national game per week, may find themselves in more of a bind.As many as 12 NFL teams will potentially not sell out all of their games this season. Among them are the Detroit Lions, Tampa Bay Buccaneers and St. Louis Rams in the National Football Conference; and the Jacksonville Jaguars, Oakland Raiders, San Diego Chargers, Cincinnati Bengals and Kansas City Chiefs in the American Football Conference. The Minnesota Vikings, which even had trouble selling out a playoff game last year, also could face blackouts, although its signing of aging, legendary quarterback Brett Favre might help with depressed ticket sales. But even major-market teams are facing their struggles. The New York Jets, as of last week, had not sold all of its season tickets, and for the first time in years, was scrambling to sell individual regular-season tickets, even offering 20 percent discounts. (Some season-ticket holders were angered, as they had to pay full price for tickets.)While the networks downplayed the chance of blackouts, every network, except possibly NBC, seems to have some problem spots on their televised schedules. Fox is airing home games at Tampa (Fla.), Kansas City (Missouri), Jacksonville (Fla.), St. Louis and San Diego (Calif.), while CBS has home games at Cincinnati (Ohio), Kansas City, San Diego and Oakland (Calif.).ESPN’s opening Monday night game features the San Diego Chargers at the Oakland Raiders, and its Oct. 19 game will have the Denver Broncos visiting the Chargers. NFL Network has a Dec. 17 game pitting the Indianapolis Colts at the Jacksonville Jaguars.The broadcast and cable TV rights partners are paying a cumulative fee to the NFL of more than $20 billion through the 2013 season. And while any loss of revenue—even the smallest amount due to a blackout in a local market or two—can be looked at as insignificant, paying that kind of money make any loss of revenue unpalatable.Last season, there were only nine blackouts, seven on Fox and two on CBS. But the potential is far greater this season. The NFL continues to take a hard line on its blackout policy, with commissioner Roger Goodell announcing that there are no plans to ease it this season. And NFL sources said while it is easier for Fox and CBS to move alternate games into blackout markets, the league has no plans to give any special consideration to lifting the potential for blackouts in nationally televised games on NBC, ESPN or the NFL Network.“The rule is the rule,” a spokesman for the NFL said.Almost in defense of the league, however, network executives, who did not want to speak for attribution, said the league does its best to help the teams sell out all of their games. “If a team is a few thousand seats away from a sellout, the league will allow the team to offer tickets at a discount to companies and organizations, or it will sometimes extend the 72-hour deadline if it seems like a team will be able to eventually reach a sellout closer to kickoff,” one network official said.Another official added: “The blackout rule is part of the package we are buying. It has always been there, and when we do our rights deal, we know it is something that could potentially affect us. That’s part of the deal.”One network official said that in order to take a significant revenue hit, a network would have to have about 14 home market games blacked out. And it also depends on the market. Teams like the Detroit Lions or Oakland Raiders, traditionally at the bottom of the standings, will have a higher potential for blackout than, say, the Dallas Cowboys or New England Patriots. If one of the latter teams were substituted in, it might not be as great a loss of TV audience or advertiser makegoods for down ratings.The size of the market blacked out also matters. Blacking out a game in New York would have a greater impact on national ratings than blacking out a game in Jacksonville, for example.Individual blackouts could potentially hurt ESPN and NFL Network more, because in addition to televising those prime-time games on cable, they would also be required (under NFL rules) to televise those games on a local broadcast network in the home market. The networks then sell those syndication rights to televise the game locally and get revenue from that. If the game were not sold out, they would lose the revenue from the local TV rights. In addition, they would lose the local audience watching on the broadcast network, which is added to its overall national rating. Over the past four seasons, the NFL's TV rights-holder networks have cumulatively televised 96 percent of the NFL’s 256 games each year. In 1999, the networks saw 16 percent of the NFL games blacked out; and in 1989, 38 percent of the games were blacked out. In 1984, blackout occurred for 47 percent of the games.The networks are hoping that blackout levels won’t regress back to the levels of the 1980s, but they're not too worried.“Right now, we don’t think there will be enough blackouts this season to affect us at all,” said one network official. “It seems like it’s been more the media that’s been writing about potential problems. But we are aware of the possibilities.”

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NFL TV Rights Holders Still Seeing Green Amidst Potential Blackouts

John Consoli

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John Consoli