Commentary

Higher NFL TV Viewership For New L.A. Teams -- But Think More Long-Term

by Wayne Friedman , Staff Writer, February 1, 2016

The trend line for TV sports dollars goes in pretty much one direction: higher, for TV networks and advertisers.

But there’s more to it.

The new Los Angeles Rams will get pretty much the same share that the St. Louis Rams did. NFL teams split equally its share of the money from national TV contracts. In 2015, that came to $226.4 million per team. That’s right, all teams get the same money.

In other sports like Major League Baseball and the NBA, teams get significantly more TV money from their regional sports TV deals versus the money from national TV contracts. Bigger markets teams can prosper more than smaller market teams.

The new Los Angeles Rams will get -- in theory -- better in-game attendance and merchandise sales. (Though many may disagree with that, due to L.A. citizens' somewhat lazy attendance record for other professional sports).

More importantly, the Stan Kroenke-owned Rams will see something better: a big rise in valuation for the team, which is estimated to climb by $500 million.

But that isn’t the whole story. The NFL will add to its record supply of viewers for its national TV games -- on Fox, NBC, CBS, NFL Network and ESPN. Some are projecting that having a team in the second-biggest market in the U.S., viewership should climb substantially.

That, in turn, means those national TV networks can charge advertisers more. And that in turn means the next round of TV contract negotiations will go even higher -- which means more money for each team, including the team in Los Angeles.

How much higher? Look long-term to overall football revenues. The NFL is projecting it could rise to a $25 billion business in 11 years from $12 billion in 2015. NFL is at the top of all sports on a revenue basis: Major League Baseball is a $9 billion business; the NBA, $5 billion, and the NHL, $3.6 billion.

For the NFL, a sure bet is that ticket seat prices will rise. But more than that, TV will pay a big part of it -- $7.2 billion of the $12 billion per year coming from TV contracts.

Getting a team in Los Angeles is only the first step. And if they get, say, two teams in LA, the league will be looking to run up the score a bit more.

sports, tv

4 comments about " Higher NFL TV Viewership For New L.A. Teams -- But Think More Long-Term ".

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David Mountain from Marketing and Advertising Direction, February 1, 2016 at 3:31 p.m.
It will also give the league more opportunity to have a tolerable game in the Sunday 4pm EST slot. Last season, the pickings got pretty light, after all of the Thurs / Sun / Mon PM offerings.
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Jonathan Hutter from Northern Light Health, February 1, 2016 at 3:33 p.m.

It's madness. And the only way it will stop is if the fans say it's enough, and refuse to watch, or go, or allow their tax money to subsidize outrageous profits into this club. Which I will do. But only after the Jets win a Super Bowl.

Paula Lynn from Who Else Unlimited, February 1, 2016 at 7:15 p.m.

It may be a transportation problem in LA for lower attendance. Sitting in traffic for hours without any public transit is not a friendly come on down. And Jonathan, what kind of outrageous profits ? The NFL is a non profit.

David Mountain from Marketing and Advertising Direction, February 2, 2016 at 12:26 p.m.

The single best thing that could happen for America, in re the NFL, is for a relegation / promotion system, a la Premier League football in the UK.

Voila, dozens of markets, an end to all stadium blackmail, and a way to get colleges out of the football business. Which has, well, nothing to do with education, and corrupts it.