Thursday Night Is a Game Changer for NFL Network

Pumped-up roster sends affiliate fees soaring

Adding five Thursday Night Football games to its lineup has paid handsome dividends for NFL Network, enabling the league’s in-house TV outlet to boost its carriage fees by as much as 41 percent.

According to SNL Kagan estimates, NFL Network in 2013 charges operators an average affiliate fee of $1.34 per subscriber per month, a sharp increase from the $0.95 a pop the channel commanded a year ago. The new pricing scheme now places NFL Net second among all cable properties, surpassing TNT ($1.29) and the non-ad supported Disney Channel ($1.15).

At the top of the carriage fee food chain is ESPN, which rakes in a princely fee of $5.45 per sub per month, up from $5.01 in 2012.

Given NFL Network’s recent subscriber gains (the channel now reaches 69.7 million homes, up 10 percent from the year-ago 63.2 million), overall affiliate revenue is expected to increase 56 percent to $1.12 billion.

The 2012 campaign marked the first in which NFL Net carried nearly a full season’s worth of live games. Over the course of 13 telecasts, the network averaged 6.35 million viewers and a 2.6 rating in the adults 18-49 demo.

While NFL Network seems to get fed the league’s table scraps (last year’s games included a lopsided 31-13 scrum between the 1-7 Kansas City Chiefs and the 4-4 San Diego Chargers), a handful of early games scared up big numbers. The first TNF game of 2012, an NFC North grudge match between the Chicago Bears and Green Bay Packers, delivered 8.56 million viewers and a 3.8 in the dollar demo, while the Browns and Ravens battled on Sept. 27 in front of a national TV audience of 8.05 million viewers. A late defensive stand by Baltimore secured a win over division rival Cleveland; per Nielsen, the game averaged a 3.3 among the 18-49 set.

The live-plus-same-day ratings do not take into account local deliveries in each team’s home market.

Naturally, the beefed-up NFL slate helped boost the network’s fourth-quarter ratings. NFL Net averaged 751,000 total viewers in Q4 prime, up 12 percent versus the prior-year 668,000. The dollar demo was up 13 percent to 378,000 adults 18-49.

Per Kagan data, NFL Net last year booked approximately $200.7 million in total ad sales revenue, more than double what it took in over the course of 2011 ($99.6 million).

RBC Capital Markets analyst David Bank projects that NFL Net will book as much as $335 million in ad sales commitments this year, which translates to an increase of 67 percent. Looking further down the road, Bank said the channel is on track to generate $887 million in sponsor dollars in 2017.

If NFL Net continues to function as an ATM (Kagan projects positive operating cash flow of $81.5 million for the channel in 2013, a nice swing from the negative $325.4 million posted a year ago), the league may ultimately decide to shelve any future plans to offer an eight-game cable package. Before the NFL awarded the five extra Thursday night games to its own property, everyone from Fox Sports to Turner Sports to NBC Sports was said to be sniffing around for a deal.

NFL Network’s TNF coverage kicks off Sept. 12 with a Jets-Patriots hate-fest. Among the more promising games on the schedule are a Giants-Bears defensive brawl (Oct. 10) and a Dec. 12 Chargers-Broncos showdown that could have playoff implications.