The National Football League was top of mind during Tuesday’s UBS Global Media and Communications Conference, as incumbent and prospective network partners alike weighed in on the value of allying with the league.
Speaking during an early keynote session, CBS Corp. chairman and CEO Leslie Moonves said the broadcast giant hopes to be in business with the NFL for a long time to come, though he stopped short of confirming that a new deal was in the works.
“The NFL is an unbelievable property,” Moonves said. “You see it in the ratings. Even a bad football game outrates most programming. So, we love our relationship with the NFL.”
Warming to the subject, Moonves acknowledged that CBS will have to ante up if and when it renews its current eight-year deal, which expires in 2013.
“We’re aware that when a new deal gets made the price of poker is going up—and it should go up,” Moonves said. “They’ve delivered properties to us that have done extremely well. But there’s one thing you have to remember: The NFL likes their partners to be strong, [and] the NFL likes their partners to make money, so we anticipate going forward that something similar will happen.”
The NFL is looking to sew up its three outstanding broadcast contracts, all of which expire at the close of the 2013 campaign. CBS currently pays $619.8 million per year for its Sunday afternoon AFC rights deal; sources say a new eight-year pact could cost as much as $1 billion per year.
Fox and NBC face proportionate rate increases. Fox forks over $720.3 million per year for its Sunday NFC package while NBC invests $603 million in fees for the rights to air Sunday Night Football. NBC’s prime-time colossus not only snares TV’s biggest ratings, but it also commands the highest ad rates—$500,000 per :30, according to media buyers.
ESPN set the tone for NFL renewals in September when it signed off on a new $15.2 billion deal ($1.9 billion/year) to retain the rights to Monday Night Football. Valid through 2021, the ESPN pact came loaded with 500 hours of league-branded studio shows, the rights to stream NFL programming to Verizon smartphones, and an annual rights fee increase of $800 million.
While no broadcaster has signed a renewal, deals could be finalized before the end of the fourth quarter.
Also strapping on a helmet Tuesday was Time Warner chairman and CEO Jeff Bewkes, who pump-faked his way through a question about his company’s interest in a proposed eight-game Thursday night package.
“The NFL . . . is always looking for more outlets, and we are always open to discussions about that and we have been with them,” Bewkes told investors Tuesday afternoon. “We don’t think if we were to do something like that that we would do it with a plan to lose any money, so the question of whether that would fit with what the NFL wants to do and our desire to make money would be an open question.”
Bewkes added that while he isn’t ruling anything out, the pressure a mega-million NFL contract would place on Turner’s affiliates could be a deal-breaker. “Sports programming is probably the thing that is causing the most price increases to all of you sitting out there, and depending on who you are, you know that you don’t watch it,” Bewkes said. “So that’s a concern, pretty widespread. When we look at the whole business of subscriber payments, what people have to pay, and what the [carriers] are able and willing to pay us…we already have plenty of sports to handle what we need to do there."
Bewkes said, “We have very strong results so far on what our current sports load, including the NCAA [Men’s Basketball Tournament], gives us in terms of future subscription support.”
Bewkes could very well be speaking for himself when he suggested that many cable subscribers are not avid sports enthusiasts. Asked once what he watched in his down time, the Time Warner chief ticked off a list of HBO and TNT series before allowing that he wasn’t much of a sports fan.
Much of the chatter about carriage fees as a function of sports programming began heating up on Monday when Liberty Media CEO Greg Maffei characterized ESPN’s swelling monthly rate as a “tax on every American household.”
The networks would counter that big-time, DVR-proof sports are the last promotional vehicle on the tube and, as such, are worth every penny. With four weeks left on the NFL’s regular season calendar, pro football already accounts for nine of the 10 most-watched programs of the fall season. In November, the top seven cable telecasts were NFL games (No. 8 was a Nascar Sprint Cup race on ESPN, while Nos. 9 and 10 were gobbled up by AMC’s The Walking Dead).
The NFL this summer began conducting under-the-radar talks on an early-season Thursday night package, drawing interest from Turner Sports, Fox Sports, and NBCUniversal. In the wake of ESPN’s blockbuster renewal, the league elected to sideline the bidding process for the immediate future; NFL commissioner Roger Goodell said it was unlikely that a new package would be hashed out until after the end of the season.
Because top executives at Turner Sports are fired up about the prospect of an NFL showcase, don't count Time Warner out. But Bewkes appears to need a little more convincing if he's to sign off on a deal that could run between $600 million and $800 million per year.
“If you look at where sports fits for TNT and TBS, it’s a very strong part of our programming lineup, of what we offer to affiliates, of how we provide steady audiences to launch original programs and acquired series—it’s part of the mix,” he said. “But it’s not the dominant part of the mix.”