NFL Looks To Add Another TV Package

by Wayne Friedman, Jun 28, 2011, 1:00 PM

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The bane of any media or entertainment existence is where to find more growth -- specifically, TV advertising growth.

Through thick and thin, in bad and good overall TV markets, the NFL has endured well for its TV partners -- especially when it comes to TV advertising. Wildly strong gains were achieved this year -- amid an overall strong TV advertising market. In poor years, like in 2008 and 2009, the NFL still posted gains when every one else took cutbacks.

Who's to think that anything will slow this train down? (Only a sustained in-season lockout, I'm guessing).

So with this in mind, the preeminent professional sports league, the NFL, is floating the idea of yet another package of games -- an early season eight-game Thursday night schedule where it hopes to grab another $500 million to $700 million in rights fees from one lucky TV network. All of this is on top of the $4.5 billion it already gets collectively from Fox, CBS, NBC and ESPN.

If successful, this would mean the NFL would grow its media revenues from 10% to 16%. In effect, the NFL estimates there is a specific level of more TV advertising dollars to be had.

This new early season Thursday night package would match up nicely with an eight-game late season Thursday night package of games on the NFL's own NFL Network. Turner Broadcasting, a Comcast sports network (Versus, no doubt), or perhaps Fox's FX Network would seemingly be in the hunt.

Carving out a new package doesn't add more games to the schedule; it essentially takes away some games from existing networks. But this doesn't necessarily mean less advertising. The guess is the fewer regional games on CBS and Fox (right now they have six or seven, depending on the week) means the remaining games would expand into other markets. CBS and Fox each sell national TV advertising inventory.

Some had questioned whether the NFL will cut back on the fees that CBS, Fox, NBC, and ESPN pay. I don't think so.

Previously, the NFL started up a "Sunday Night Football" franchise on NBC from scratch, offering a full season of games. In recent years, the NFL opened up the late season eight-game Thursday night schedule on its own NFL Network -- as well as a DirecTV consumer fee-based package.

History is on the league's side. TV advertising revenue doesn't seem to be hurt when new packages are added. In the past, the NFL has found other ways to accommodate its TV partners, such as with more playoff games or other events. It could do the same again.

The NFL hasn't guessed wrong yet. Some of this is indeed tied to the lockout -- that is, owners are looking for more revenue. Then again, if a lockout happens -- and a whole season gets cancelled - things may be viewed differently.

To make back those losses, a more rapid expansion might be in the works. This might include what NFL players already say they are opposed to -- adding more games to the schedule, going to 18 regular season contests from 16.

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