October 14, 2013
Hours before the N.F.L. season began Thursday, ESPN demonstrated what "Monday Night Football" means to the cable empire by renewing it for $15.2 billion through 2021, according to a person briefed on the details. The completion of the contract was delayed by the league's player lockout.
At $1.9 billion a year, ESPN will be paying 73 percent more than the $1.1 billion a year it has been spending for "Monday Night," the highest-rated show on cable television. ESPN began carrying Monday night games in 2006, when its previous package of Sunday night games moved to NBC.
But when ESPN made that earlier deal, which will expire in 2013, it received no playoff games and no chance of carrying a Super Bowl, which is rotated among CBS, NBC and Fox. All ESPN had were the rights to carry 17 regular-season games a year.
The new deal provides a path to adding a wild-card playoff game on the network by providing the league with an option to give one to ESPN - which would appear to mean taking one away from another network.
How that develops will probably be a part of continuing negotiations with CBS, Fox and NBC, which will be under pressure to retain their N.F.L. rights, at possibly steep fee increases, in a sluggish economy.
ESPN's agreement will allow it to further secure its role as the cable channel with more N.F.L. content than any other except for the NFL Network. ESPN will expand its use of video highlights and add 500 hours of league-branded studio shows almost immediately, including adding a third hour to the Sunday show "NFL Countdown." It will now start at 10 a.m. Eastern.
The daily "NFL Live" show will expand to 60 minutes from 30. The deal will also let ESPN stream its N.F.L. programming to Verizon cellphones. Tablet users will be able to see "Monday Night" games and other league shows by using the WatchESPN app.
"The value of the N.F.L. to us is the ubiquity of the sport across our platforms all the time," said John Skipper, the executive vice president for content at ESPN. "It's just stupendous for us. It's daily product - we don't have a day without the N.F.L."
He called the new deal, even at a much higher cost, "fiscally prudent for us" and one that "we will be able to absorb and continue to grow." For ESPN, the length of the deal, eight years, is advantageous because it will span a period in which it will renegotiate all of its deals with cable, satellite and telephone companies. That will almost certainly lead to subscriber fees exceeding the estimated $4.50 a month that ESPN now charges.
In a conference call, George Bodenheimer, the president of ESPN, said there would not be a specific "N.F.L. surcharge" added to subscriber fees.
But, he added: "No portion of any of our fees is associated with any product. Our fees are based on the value of our products."
Neal Pilson, a sports industry consultant, said ESPN's $1.9 billion annual payment was affordable in cable economics.
"Hypothetically," he wrote in an e-mail, "if you say 50 cents or one dollar (or more) of the $4.50 monthly sub fee is attributed to the N.F.L. on ESPN (and push that forward to support future increases in sub fees), you can easily justify the rights fee given all the programming and content ESPN will be carrying."
At $15.2 billion for eight years of N.F.L. rights, ESPN's contract greatly exceeds recent deals like CBS and Turner's $10.8 billion agreement to carry the N.C.A.A. men's basketball tournament for 14 years and NBC Universal's $4.38 billion investment in the four Olympics from 2014 to 2020. ESPN made losing bids for the N.C.A.A. and Olympic contracts, perhaps signaling that the deal it really wanted was the N.F.L. extension. "We do not have a more important deal than the N.F.L.," Skipper said.
The league's next TV deal might be for a second Thursday night package of games to augment the one that the NFL Network carries. But the creation, and sale, of a second such collection of eight games is not imminent. Roger Goodell, the N.F.L. commissioner, said, "It's not likely we will do it in the next year." - New York Times
- Wall Street Journal: Down is Up for Time Warner Cable (subscription required)
- USA Today: DVRs help erase decline in TV ratings
- Christian Science Monitor: Britain's battle against online porn
- New York Times: Google Jousts With Wired South Korea Over Quirty Internet Rules
- The Morning Call: Cablevision blasts broadcasters' Supreme Court filing against Aereo
- Dow Jones Newswires: AT&T shuts down its online, mobile ad networks
- New York Times: Hulu Is Said to Pick a New Chief Executive