Although serious talks won’t start till after the Super Bowl, the jockeying, posturing and sideline-handicapping has already begun for the high-stakes negotiation between the NFL and the television industry to win the rights to air games into the next century. For pro football, it might not seem like the best of times. Ratings are down; owners and players are squabbling; two big football towns (and important TV markets), Cleveland and Los Angeles, are without a home team. A third, Houston, soon will be. Yet the value of football to the TV networks right now is higher than the odds of the Jets winning the Super Bowl. And mainly because there are four networks who want to sit in three chairs.
How badly do they want a seat? Suffice it to say that the last negotiation, in 1993, altered the face of the industry. At least it’s perceived that way. The transformation stems from Rupert Murdoch’s daring raid on the Sunday-afternoon NFC package, when Fox offered a logic-defying $395 million a year for four years, recovering CBS’s fumble. ““It made Fox a network overnight,’’ says Neal Pilson, president of CBS Sports at the time. The conventional wisdom–in the media, the executive suite, the financial markets–quickly deemed Murdoch a genius and Larry Tisch, then the owner of CBS, a sap for losing a 32-year franchise. The idea that sports on TV might actually be about making money became paleolithic thinking.
In a world where media magnates worry whether three traditional networks can survive, never mind four, sports has taken on a desperate importance. With a deluge of material from cable, satellites and even computers, the big players need to differentiate themselves to establish, in current parlance, ““brand identity.’’ Entertainment programming is risky; news is competitive and narrow in appeal. But sports is an exclusive. You buy it. ““And football,’’ says a Disney/ABC executive, ““is the premier property. It’s Boardwalk.''
The league tries to downplay its intimidatingly strong position. Other owners winced when the Oakland Raiders’ maverick managing partner, Al Davis, predicted the fees would ““double’’ from the current combined $4.4 billion. They fret that star players will defer their own negotiations in anticipation of a TV windfall (the athletes get 63 percent of the pot). CBS treads carefully, too. Executives at new owner Westinghouse have called football a ““No. 1 priority,’’ but were uncomfortable when last week’s appointment of a new sports president, Sean McManus of the International Management Group, was reported by some as if McManus’s sole mission were to regain football. It may be mission impossible, especially when each incumbent network has the right to match any outside bid. ““He can make an outlandish offer, but who’s going to run the risk of saying no?’’ says Barry Frank, IMG’s senior vice president.
The perils of saying no were amply demonstrated by CBS. After Murdoch swiped football, he bought or wooed a host of new affiliated and owned stations, some in NFC cities, some at CBS’s expense. The Tiffany Network was suddenly on channel 62 in Detroit. The ratings of ““60 Minutes’’ and David Letterman suffered. The network often trailed Fox in the key 18-49 demographic. CBS has recovered slightly, but its travails scared everybody. ““The next time there’s an ad recession,’’ says former CBS president Howard Stringer, ““the third or fourth network might need a life raft.’’ Like, for instance, football.
Scenarios circulate about ways to include all four networks, slicing and dicing the packages to let CBS get a share. One is the league’s handing over the Sunday-night cable package to a network. But the NFL likes cable; it takes pressure off the finite advertising market because cable derives much of its revenue from subscriber fees. ESPN and Turner have done yeoman’s work promoting the league. And with marquee games scarce, would a network be happy with a Jaguars-Cardinals game? Some wonder whether Sunday night would be exposed, on a network, as an intrinsically weak football night. After seven straight hours of football, beer and potato chips, a fan can get his remote-control device confiscated by family members.
But these keep-everybody-happy prescriptions are unlikely. ““I don’t think another package makes sense,’’ says Denver Broncos owner Pat Bowlen, the powerful chairman of the league’s broadcast committee. ““It dilutes our product.’’ Bowlen makes soothing noises about being TV’s ““partner,’’ but it seems clear that the league’s intent is to keep one party outside, scratching at the door and yelping piteously.
Somebody will have to walk away, but who will? ABC and NBC got off relatively easy last time, paying $230 million a year and $217 million a year, respectively. They will have to dig deeper. New owner Disney is frantic to justify its purchase of ABC, and its No. 1 show is none other than ““Monday Night Football.''
NBC is top of the heap these days in almost every aspect of television, thanks in some measure to NBC sports chief Dick Ebersol’s aggressive spending for a host of sports rights, including five of the next six Olympics, for $3.6 billion. NBC knows well that ““Seinfeld’’ and ““ER’’ won’t last forever, but the promotional muscle of big-ticket sports events can launch new hit shows.
Fox took a $350 million write-off on football in 1995, and last week its News Corp. parent reported flat earnings in a quarter when it released the third most successful movie ever (““Independence Day’’). The company cited football as a major culprit. But Murdoch seems to be playing a different game from his brethren in moguldom, and a big part of his strategy worldwide is sports. His new all-sports cable channel, Fox Sports Net, in partnership with TCI, may put pressure on Turner and ESPN in the Sunday-night bidding. Football increased the asset values of Fox TV stations, but has done little for the network’s overall ratings. Fox’s typical young demographic is an awkward match for Fox’s grizzled football announcers, urging their equally grizzled viewers to tune in to some peach-fuzzed teen star on ““90210.’’ Football made more sense leading into ““60 Minutes.''
And then there’s CBS. Last week Westinghouse spun off its last remaining industrial operations to focus on broadcasting. Wall Street analysts are scrutinizing chairman Michael Jordan, and getting football back would please them mightily. But he can’t break the bank. ““These same analysts will turn on him if he can’t keep up short-term profits,’’ says a CBS veteran.
The endgame in the negotiations may not come until late next year: the NFL wants to make sure CBS has every opportunity to be involved (and drive up the price) and doesn’t want a possible lame duck broadcasting too many games next season, the last in the current pact. Meanwhile, expect the networks to begin their ritual poor-mouthing of football soon, moaning about ratings and financial losses. ““But this time,’’ says one person close to the league, ““is anybody going to believe them?''
