Wednesday, October 25, 2006

NBC a much happier NFL TV Partner

NBC is in the first year of a $3.6 billion six-year agreement with the NFL, giving NBC the rights to 16 Sunday night telecasts, the league’s Thursday season opening game, Super Bowl XLIII (43) in 2009 and Super Bowl XLVI (46) in 2012 -- and two AFC-NFC Pro Bowls. The big caveat in NBC’s agreement is the right to coordinate with the NFL which game the network would televise Week 11 through Week 17 with the exception of any weekend that conflict with Christmas. Tuesday, as expected NBC took full advantage of the opportunity they negotiated with the NFL selecting the Chicago Bears visiting the New York Giants at the Meadowlands.

The game features teams in the two biggest markets home to NFL franchises. The Bears and the Indianapolis Colts are the NFL’s two remaining undefeated teams. The Bears should be 8-0 by the time they meet the Giants, with home games against the San Francisco 49’ers (2-4) and the Miami Dolphins (1-5).

NBC was the long time television home for the NFL’s American Conference League games. NBC walked away from their NFL relationship in 1998, a relationship that dated back to 1955 when NBC became the televised home to the NFL Championship Game, paying $100,000 to the league. Dick Ebersol, then as he is now the President of NBC Sports, believed NFL television rights fees where out of control in 1998, promoting NBC to lose AFC television rights to CBS.

“We want to see NBC get off to a strong start, and we believe this schedule has accomplished that without jeopardizing the success of our Sunday afternoon partners,” said Howard Katz, the league’s senior vice president for media operations and the scheduling chieftain told The Wall Street Journal during the summer.

When the NFL schedule was announced in April, Weeks 11 through 15, and week 17 did not include a ‘scheduled’ Sunday night game. CBS and Fox each are allowed to protect five afternoon games over seven weeks of the season. Each has chosen four and will pick one more.

NBC Sports President Dick Ebersol told the media during a conference call Tuesday afternoon, the NFL had ‘protected’ one game during weeks 11 through 15 and week 17, games that CBS and Fox could not select to protect. The Bears – Giants was the game the NFL had ‘protected’ for NBC. You have to believe Fox would have protected a game featuring franchises in the New York and Chicago markets.

"The game was never formally announced," Ebersol said. "It couldn't be protected by the other networks. That's never been announced and the NFL asked us never to confirm what those games are. I will say that it's comforting some weeks to know there's a game, no matter what, if we want it, it's ours."

"I just wanted to say how happy we are with the announcement by the League today that the first game for Sunday Night Football under the League's new flex scheduling policy, Sunday night November 12, will match up arguably the two best teams in the NFC right now, certainly surefire Super Bowl contenders. They represent the two largest NFL home city markets in the United States,” Ebersol added. “You couldn't ask for a better start to this whole new policy of allowing the late season games to evolve into the top matchup of the day as often as is possible. And in this particular week, this game at this point with the undefeated Bears and the NFC East leading Giants, sure promises to deliver a lot."

The news that the flex schedule isn’t as flex as it was reported to be, shouldn’t come as a surprise to anyone. The NFL’s rationale for offering NBC a flexible schedule was in part based on longstanding issues network executives at ABC had with Monday Night Football. Disney the parent company for both ABC and ESPN choose to move Monday Night Football to ESPN, paying the NFL $1.1 billion annually for MNF rights. ESPN had been the home of Sunday Night Football, ABC the home of Monday Night Football for 35-years before ending their relationship with the NFL at the end of the 2005 season.

Sunday night is an important night for the four major networks. Fox follows their NFC coverage with The Simpson’s and similar original programming. CBS offers 60 Minutes, Cold Case and Without a Trace, and ABC offers Desperate Housewives and Sisters & Brothers. After a day where football has ruled televisions, the NFL knew the network needed marquee games to attract bigger audiences.

Ebersol for his part did his best to deflect any criticism that might be directed at NBC from his competitors, particularly Fox and CBS who at least in theory are paying the NFL more money, but stand to lose some of their best games to NBC in the second half of the NFL season.

"The League put this policy into effect when they negotiated the television deals with CBS and FOX in the fall of 2004. Our deal wasn't made until April of '05 so we inherited flex scheduling. We're able to say to the League, 'here is a game that we would like to have, and here are reasons why we think this the most compelling game.' And then their television department and the Commissioner make the final decision.”

"The League did protect one game for us for each week of flex. The game was never formally announced; it couldn't be protected by the other networks. That's never been announced and the NFL asked us never to confirm what those games are. I will say that it's comforting some weeks to know there's a game, no matter what, if we want it, it's ours.”

"There may be a week where we want 'X' game and there may be another game that the League rules equally or more compelling and they'll make the determination that that is the game that we're going to do. They have the final authority."

The NFL is the industry leader when it comes to making the decisions they believe are in the best interests of the NFL and its TV partners. CBS hasn’t said very much about the opportunity offered to NBC. According to a 2005 USA Today report, CBS considered bidding for the Sunday night games, with the benefit of a flexible schedule. CBS did significant market research and determined the benefit of a flexible schedule would only increase viewership by 0.2% of TV households. Still as far as Ebersol is concerned a flex schedule is the natural evolution of sports leagues and their television properties.

"All this stuff went down because after 20 years of discussing it, the League and its television committee determined, in late summer of '04 and the early fall of '04 that they were going to put flex scheduling in as a permanent fixture. And if ABC had held on to Monday Night Football, they probably would have had to move it to Sunday night, because the only way there was going to be flex is if it took place on Sunday night so that no team would be inconvenienced by having to change an additional 24 hours on 12 days notice.”

"All this stuff that gets written sort of makes it seem like this was come up with on the fly. This goes back to the negotiations they had with those two companies [Fox and CBS] back in the fall of 2004. They knew what they were buying into."

"Flex was created to make sure that there was the strongest possible primetime attraction, so you wouldn't end up with the kind of situation, for example, that Freddy [Gaudelli] ended up with last year, or has existed many times in the past, where the back end of the schedule was loaded with mismatches between teams whose hopes had fallen during the season. They were no longer playoff contenders and the games just did not look like the merited being on in primetime on a network. Flex was conceived by the NFL so if a team is really making an impact that wasn't expected, they may be able to play themselves onto the broadcast primetime package."

Fox spokesman Dan Bell declined to comment on the Giants-Bears game being taken away from the network. CBS had even less to say Tuesday offering no comment. However, last week The New York Times Richard Sandomir spoke with a representative from CBS about the inevitability of NBC getting to take away games their network would have televised.

''It's really difficult,'' said Tony Petitti, the executive vice president of CBS Sports. ''We looked at whether there was a dominating game we had to protect; at NBC's games to see how likely they would hold up; and at our schedule, even when NBC's game looks pretty good, to see what would happen if we lost X game.''

Before the season, Ed Goren, the president of Fox Sports, said, ''Why should our crystal ball be better than NBC's in trying to figure out which games are protected?''

The NFL on their part acknowledged the evolution of their scheduling with a simple three sentence press release. NFL owners met Tuesday in New Orleans. NBC created the media opportunity, without any participation from the NFL.

Howard Katz, the league's senior vice president for media operations, told The New York Times last week, ''We want to get the information out to our teams and our fans out as quickly as we can.''
'The concern was that if you let CBS and Fox protect too late in the season, a surprise team couldn't play its way onto the prime-time schedule,'' Katz said, ''because they would always be protected.''

Katz made it clear to The New York Times; NBC would not get every game they wanted.

''We have to look at what losing a game will do to the competitive balance between CBS and Fox,'' he said. ''NBC can't say, 'I want this game because it's unprotected.' ''

Needless to say, Fred Gaudelli, the producer of NBC’s Football Night in America, couldn’t be happier with the opportunity he’s been presented with.

"There's no question we're the benchmark of the NFL weekend," "Sunday Night Football" Gaudelli told the Contra Costa Times. "The NFL itself positioned us like that. (Former NFL commissioner) Paul Tagliabue said the premier game is now seen on NBC on Sunday nights. But America has to make the adjustment. They're not ever going to just abandon 'Monday Night Football.' It's part of our country."

Gaudelli couldn’t be more correct about Monday Night Football being ingrained in American Culture. Monday night, ESPN's Monday Night Football, a 36-22 New York Giants victory over the Dallas Cowboys, was seen by the biggest audience in the history of cable television - an average of 11,807,000 homes, based on a 12.8 rating (16,028,000 viewers, P2+). The previous record for a scheduled program on cable television had stood for nearly 13 years, CNN's November 1993 NAFTA Debate between then-vice president Al Gore and Ross Perot on Larry King Live (11,174,000 homes). (That previous record excluded breaking news which ESPN has also exceeded; four CNN telecasts of the Gulf War in 1991 were seen by more homes than the NAFTA Debate, topped by 11,742,000 homes on January 17.)

"We've never believed the acronyms NAFTA and MNF belonged in the same sentence, and we're thrilled to have established MNF as the home of cable's biggest audience ever," said Norby Williamson, ESPN executive vice president, studio and remote production. "Many people here have worked very hard to establish our day-long, multi-media approach with lead-in and post-game programming plus 'Monday Night Surround' on That fans have responded with the record is very rewarding and a vivid reminder of the power of Monday Night Football."

"NBC has really embraced it (Sunday night football) and put it on a pedestal," Gaudelli added in The Contra Costa Times report. "It made it the cornerstone of revitalizing prime time for the network. The ratings are higher than 'Monday Night Football' last year and we haven't even got to the meat of our schedule yet."

The NFL’s decision to offer a flexible schedule to NBC for their Sunday night package came after ABC suffered with its Monday Night package for the last three years. Less then stellar ratings, largely created by stale late season games led to the NFL’s decision to offer a flexible prime time package. While not a great deal has been discussed regarding why ESPN paying nearly twice as much as NBC is paying the NFL ($1.1 billion vs. $600 million) it’s well worth noting ESPN’s game doesn’t have to compete against any other NFL games being played that day for fans attention, while NBC is facing football fans who have already had an opportunity to spend an entire day watching NFL football on CBS and Fox. For the National Football League it was another example in a long line of great business decisions.

For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: The New York Times, USA Today and The Contra Costa Times

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