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Cable Operators

NFL Gets Richer With New TV Pacts

12/19/2011 12:01 AM Eastern

Headlines surrounding the National Football
League’s record nine-year rights deal signed with
broadcasters last week point to the power of the preeminent
sports league and its games that continue to
deliver most of the strongest Nielsens in the TV industry.

Combined with the new $1.9 billion Monday Night Football
deal ESPN signed in September, the networks will be
paying the NFL just a shade under $5
billion annually when the new contracts
take effect in 2014.

That’s up more than 60% from their
collective $3 billion annual outlay.

The new pacts are with CBS ($1 billion
for the American Football Conference
package), Fox ($1.1 billion for the
National Football Conference package)
and NBC ($950 million for Sunday
Night Football
).

PUBLIC WILL PAY

It’s likely the broadcasters — taking a
page from ESPN’s license-fee playbook
— will be dipping into retransmissionconsent
payments and reverse compensation
from station affiliates to help
foot some of the higher bills.

That has prompted some observers,
including American Cable Association
president Matt Polka, to blow
the whistle on the continued escalation
of sports rights being borne by
the American pay TV public.

Also in play is a likely expansion of
the NFL Network’s eight-game Thursday
Night Football
package. And broadcasters
have gained still-evolving TV
Everywhere rights.

Brian Rolapp, chief operating officer of NFL Media, told
Multichannel News that the new contracts allow the league
to put more games on NFL Network.

“It reaffirms the league’s commitment and is a vote of
a confidence for the network,” Rolapp said. “How many
more games has yet to be determined, but it will very likely
take place next season.”

The NFL typically releases its schedule in April.

Despite adding Thursday Night Football games, there are
no plans for a surcharge to NFL Network affiliates, Rolapp
said. The network has about 58 million subscribers, lacking
deals with Time Warner Cable and Cablevision Systems.

A game that NFL Network has had, on Thanksgiving
night, moves to NBC under the new rights deal, beginning
in 2012.

The league also might construct yet another primetime
package. That’s something that’s drawn interest from FX,
Turner Sports and NBC Sports Network (the new name for
Versus as of Jan. 2, 2012).

“No decision has been made there,” Rolapp said of a new
package. “We have been focused on the Sunday rights.”

A new primetime package could be forestalled until the
2013 season, when the league can eliminate a pair of preseason
games.

However, proposals about expanding the regular-season
schedule to 18 games from 16, and the chance that
players could be exposed to more injuries, was a major
sticking point during the summer’s player lockout.

Rolapp said the potential impact on quality of play and
competition would be factors if the league were to expand
the schedule with another primetime package going forward.

With the three broadcasters (2014-22) joining ESPN
(2014-21) with new long-term deals, DirecTV’s out-of-market
“NFL Sunday Ticket” package — a four-year, $4 billion
deal spanning the 2011-14 seasons — is now out of sync.

Rolapp said the league has not focused on Sunday
Ticket yet. “There is an exclusive negotiating period. We
have some time there,” he said.

The new deals bestow TV Everywhere rights, including
tablet plays, to the broadcast partners. But the NFL
has not determined
whether the networks,
given different interests
in business models
and affiliate protection
considerat ions, will
stream live games on
their respective websites.
(NBC has that
right under the current
and new deals.)

“TV Everywhere is
a nascent model that
doesn’t mean the same
thing it did 12 months
ago, and will likely
change again over the
next six to 12 months,”
Rolapp said. “We have
retained the flexibility
and, with that, mobile
rights.”

Verizon Wireless can
stream Sunday-night,
Monday-night and
Thursday-night NFL
games, the RedZone
scoring channel and
other NFL highlights
and content in a deal
that expires after the 2013 season.

With the extensions, CBS (whose $1 billion rights fee is
up from $625 million) and Fox (whose $1.1 billion fee is up
from $725 million) mainly retain their respective rights to
the AFC and NFC contests, at a higher price.

Changes were made relative to switching conference
games between the two networks to ensure better matchups
in the late Sunday afternoon window (4:15 p.m. ET).

Each network will televise three Super Bowls under the
new contracts.

NBC GAINS GAMES

Fourth-place NBC, which upped its rights fee to $950 million
from $612 million, will continue presenting its toprated
Sunday Night Football and adds the Thanksgiving
Night game, previously on NFL Network.

NBC raised its regular-season count to 19 games and
upgraded its playoff roster by trading a wild-card contest
for a divisional playoff game.

With Fox and CBS perhaps alternating on divisional
playoffs, the switch apparently will open the door to ESPN
scoring a playoff contest.

NBC, the host of Super Bowl XLVI in Indianapolis on
Feb. 6, 2012, gains Super Bowls in 2015, 2018 and 2021, up
from two title tilts under the current deal.

NBC gets enhanced flexible scheduling, more digital
access and TV Everywhere rights, as well as Spanish-language
game rights for Telemundo, mun2 or an SAP feed.

NBC also tacks on more highlights rights that can boost
other platforms, including national cable platform NBC
Sports Network, which will add an NFL Sunday-morning
program in 2014.

September