As ratings for the NFL continue to fall across nearly every network currently broadcasting games, one analyst is noting that it would make good business sense for cable sports network ESPN to simply give up its $15.2 billion commitment to broadcast NFL games.
With TV ratings across the league cratering at the same time that player protests during the playing of the national anthem increase, it might end up serving ESPN’s bottom line to dump the NFL, according to The Hollywood Reporter’s James Andrew Miller.
In fact, adding to the NFL’s ratings woes, despite years of ratings dominance over other sports, baseball’s World Series ratings came roaring in again this year making it the second year in a row where Baseball’s Fall Classic pulled more viewers than the NFL’s regular season games.
Indeed, Miller points out that ESPN may have already quietly set up the move to dump the NFL by removing from its affiliate agreements a former requirement that it retain NFL broadcast rights in order to keep its high subscriber fees intact.
This is quite a coup on affiliates, and it may have been a move that slipped unnoticed past ESPN’s partners. But, Miller notes that if ESPN does dump the NFL because it is no longer lucrative enough for the network to keep, the affiliates will likely be shocked by the sudden loss of NFL broadcast rights. Affiliates will likely scurry to renegotiate fees, but as Miller notes, that still puts ESPN in the driver’s seat.
“This means the network would not face automatic decreases in that vital artery of its dual revenue stream,” Miller says of the new provision and how it might save the network if it dumps the NFL. “Sure, distributors would be aghast, demanding to negotiate lower fees probably immediately, but the point is, there would be negotiations, enabling ESPN to do everything it could to keep those numbers as high as possible.”
Miller goes on to point out a series of reasons why ESPN could take a pass on re-upping its NFL broadcast rights when the current contract ends in 2021. But the upshot of his analysis is that the NFL’s broadcast milieu is just at the start of some massive shifts.
The writer points out that “when ESPN agreed to pay $15.2 billion for its current Monday Night Football deal,” Monday Night Football was the biggest game of the week. But since ESPN struck its deal, that most-popular status shifted to Sunday’s game leaving ESPN with a lesser broadcast property.
Also, “With the advent of Thursday Night Football several years ago, ESPN’s Monday night schedule has been further diluted of quality matchups, and the network hasn’t been shy about voicing dissatisfaction,” Miller said.
Saying, “the NFL seems to be cuddling up closer and closer to a land that was once thought to be on the verge of extinction: broadcast networks,” Miller points out that the NFL is starting to look back to the Big Three TV networks, (ABC, CBS, and NBC), a move showing that the league recognizes that things are changing in the world of cable TV.
Miller further speculates that ESPN’s owner, Disney Corp., might just force ESPN to dump the NFL because of the hole the sports network is burning in Disney’s profits. In August it was reported that ESPN’s hemorrhaging of subscribers and asvertisers added to Disney’s financial woes as the cable network’s profits fell another $1.46 billion.
Then there is this: Disney CEO Bob Iger has been making noise about a run for the Democrat nomination for president in 2020, and he can’t do that if Disney continues to struggle financially. Dumping the NFL could be sold as a fiscally responsible decision. And, as it happens, Iger already had a hand in canceling the NFL in the past.
“Disney CEO Bob Iger was a key participant back in 2005 when ABC declined to keep its NFL package because it was losing money,” Miller wrote, “and if Iger is going to fulfill the dreams of many in Hollywood and run for president in 2020, he’ll want to walk in the cornfields of Iowa with a track record as a financially responsible executive.”
Miller notes, too, that by ending its affiliation with the NFL, ESPN could stand to gain a massive influx of capital which could help reverse the losses that forcee- it to engage in a series of high profile layoffs recently.
“But the good news is the network would have some serious spending money it hasn’t had in years. Take the $2 billion that it is now giving the NFL…,” Miller said, “…and that still leaves a billion and a half dollars for ESPN” to use for its mounting expenses.
Miller ends his provocative analysis pointing out an additional problem that football sees looming on its horizon by recalling the story of a high school football player who wowed analysts with his prowess on the field. But even as analysts were bowled over by his play and began talking about his bright future in the NFL, the young man quickly announced that he wasn’t going to pursue football because of the threat of physical harm that could befall him on the field.
The concussion scare has seriously hurt football among youth leagues and threatens to empty the ranks of the league’s farm system as more and more kids, and parents eschew football for safer sports.
Follow Warner Todd Huston on Twitter @warnerthuston.
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