Throughout the spring and summer, without the NBA playoffs and the first few weeks of baseball, the sports world has continued to feel the steady pace of the NFL. The league opened free agency as usual, providing news moments like Tom Brady’s signing with the Tampa Bay Buccaneers, and then his April draft skyrocketed smoothly, delivering boffo ratings for ESPN.
For television networks and sports media covering the league, this has been very welcome. But as the calendar shifts to July, with NFL training camps open at the end of the month, questions have been raised about the viability of the soccer season. Coronavirus cases are on the rise in states across the country. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said soccer players may need to be in a bubble environment for the season to be played. Los Angeles Rams coach Sean McVay wondered aloud how teams can play and take precautions.
“I mean, do we go the social distance, but do we play soccer?” McVay said during a recent media appearance. “It is really difficult for me to understand all of this.”
While there is still a lot of optimism, the NFL will play, somehow, somehow, the networks are now fixed on the league’s fall schedule, given its dominant position as America’s most valuable television property. They’re invested, of course, in the planned returns of Major League Baseball, the NBA, and other sports, but none carry the importance of the NFL, which represented 41 of the 50 highest-rated broadcasts of any kind in 2019. The lack The Certainty has led to awkward conversations between executives.
“It’s pretty much the only thing on the network mind,” said John Kosner, a former ESPN executive who is now an industry consultant. “If you lost an NFL season, you are seeing a financial hemorrhage.”
The four networks that broadcast the NFL (CBS, ESPN, Fox, and NBC) declined to comment on the contingency plans or how they are thinking about the 2020 season. But a senior ESPN employee recently lamented that there is no alternative plan. It’s worth considering if the NFL can’t play, because nothing can replace the content or revenue that goes with it, according to someone with knowledge of the discussion. At Fox Sports, at least one executive told an employee that no NFL season would spell trouble for the network, according to several people familiar with the discussion.
No network relies more on the NFL than Fox, which pays more than $ 1.5 billion each year for two NFL packages: one on Sunday afternoon and the other on Thursday night. The NFL, including pre-game and post-game coverage, accounted for almost 40 percent of the minutes spent watching the network last year, according to research firm MoffettNathanson.
For the other streaming partners in the league, the number of NFL minutes watched was less, but still a considerable 10 to 13 percent last year. ESPN pays approximately $ 2 billion for “Monday Night Football”, CBS pays approximately $ 1 billion for its Sunday package, and NBC pays $ 950 million for “Sunday Night Football”. They all bring huge amounts of publicity for their NFL games.
Data collected by ad measurement company iSpot illustrates how valuable the league is in terms of ad dollars. Last soccer season, CBS raised approximately $ 1.5 billion in NFL advertising, which represents nearly 25 percent of the network’s total advertising for 2019 (not including the Super Bowl). NBC raised about $ 1.5 billion, also more than 20 percent of the network’s advertising dollars for last year.
Fox was the most dependent on the NFL, with nearly $ 2 billion of league games last season, not including the Super Bowl, an amount that would be 40 percent of the network’s overall advertising revenue from 2019. In addition, advertisers who purchase NFL games often must also purchase packages for other programming on network hours.
The NFL’s numbers on ESPN were somewhat less significant, around $ 500 million and less than 20 percent of its advertising revenue, but they don’t come close to capturing the importance of the NFL highlights and discussion segments on 24-hour cable network studio schedule. ESPN is also the network likely to be hit hardest by a canceled or shortened college football season, which health experts consider to be at greater risk than the NFL due to a lack of central authority, variable testing policies and uncertainty about whether students will be able to return to campus this fall. ESPN and its Disney-owned broadcast partner ABC received more than $ 1 billion in advertising revenue from the sport last year.
The NBA and MLB are more important to regional sports networks. The entire MLB season and playoffs delivered less than $ 700 million to national broadcasters ESPN, Fox, Turner and MLB Network in 2019. The entire 2018-19 NBA season and postseason represented a total of approximately $ 1.5 billion for ESPN, ABC, Turner and NBA Red, according to iSpot.
Since the pandemic began, ESPN, Fox, and NBC have asked top talent to cut wages as they’ve stepped foot in the water waiting for sports to return. Current and former executives predicted much more draconian developments without an NFL season, from layoffs to huge cost savings and networks that were forced to borrow heavily. A former Fox executive predicted that studio shows would be the hardest hit.
“As the recent COVID-19 data becomes more negative, we are increasingly concerned that the scheduled return of all sports in the coming weeks and in the fall will be affected in different ways, causing more pain. for our media companies. ” Read a MoffettNathanson report released in late June.
Longer term, said David Hill, former president of Fox Sports, missing an NFL season hurts broadcast networks in their battle for relevance against streaming services like Netflix. Its main advantage in that fight, Hill said, remains the NFL, and sports continue to be one of the key drivers for consumers who pay for cable packages. According to MoffettNathanson, traditional pay TV subscriptions fell by 1.8 million in the first quarter of this year, as the success of the pandemic and live sports were largely canceled. It was the highest cord cutting rate in a single quarter.
“The NFL is absolutely key because it plays at the core of what the network is,” Hill said. “It is becoming the only way networks can talk to consumers. If families are sitting in their living rooms watching streamers, and are not activating networks for the NFL, there will be less awareness of what they are doing. ” “
Regardless of whether the NFL season continues, the league’s streaming deals will expire in 2021 and 2022, meaning the same networks will have to increase what many observers expect to be huge increases in royalty rates, potentially both like double the current one. Figures, some industry insiders believe, even though they are potentially struggling to fix budget holes for the current year. This week Fox finalized its broadcast deal with the US Open golf tournament several years earlier, a move that indicates a greater commitment to its core properties, the largest of which is the NFL.
“If you miss the NFL season, I think it makes the networks even more desperate to re-sign,” Hill said.
Still, along with concern about what a lost season could do to the networks, there is hope for what a season could mean. Given the high ratings for the draft, in addition to the possibility that fans will not be allowed to attend games and that people may still be limited in what they can do outside, there is a possibility that 2020 will be an exceptional year for NFL broadcasts.
Hill said that because of any uncertainties that exist now and in the coming weeks, he believes the NFL will find a way to play its season.
“It is one of the very rare and absolutely essential items,” he said. “And I imagine that everyone locked up would also be good for them.”
