This post will automatically feed through to Twitter but I’m extending my Twitter sabbatical indefinitely and won’t be looking at Twitter mentions.
I’ve been mostly checked out but I’m still reading a few sports TV ratings/sports media-related things here and there. Every time I hear (mostly via Richard Deitsch’s or Jimmy Traina’s podcasts) someone talk about NFL rights and the Thursday night package I feel a stirring of needing to say something. Usually I resist, but time is running out to call my bank shot, so…
What’s going on with Thursdays?
If you’re Fox, your whole plan at this point is to have/acquire sports and other live event content in hopes of driving up retransmission consent fees — the monthly fee the cable/satellite/telco/streaming bundles pay per subscriber. All that’s true for the other broadcast networks too, but after selling off most of its entertainment content to Disney, it’s a bit more true/pure for Fox.
The current storyline goes that Fox (and other networks) aren’t interested in the Thursday Night Football package because it’s a non-exclusive since all games are simulcast on NFL Network. I believe the reporting with a caveat I’ll get to in a moment.
When, say, Fox, went to try to jack up the monthly fees based on having Thursday Night Football, the responses received were along the lines of “We love your EXCLUSIVE Sunday package and are willing to pay for that, but this non-exclusive Thursday thing? We’re not willing to pay extra for that.”
How does that add up to “we think Amazon will get the Thursday night package!”?
Personally, I don’t think it adds up to Amazon getting the Thursday night package, but some in the media are leaning that way. Why?
Just speculation on my part, but it’s mostly because some in the media have bought what they are being told by their sources at the TV networks in totality. Not me. The caveat I mentioned earlier is that I think some not tiny part is just the networks posturing/negotiating in public.
To be clear, I totally believe the non-exclusive thing is a problem, and a big one — one that should actually be a bigger story in sports media. But I’ve mostly translated “we’re not interested” into “we’re actually willing to pay quite a lot for a non-exclusive but not THAT much.”
I think the path from “the non-exclusive is a problem” leads more directly to “is the NFL Network costing the NFL more than it’s worth?” than to “Finally, an NFL package goes more digital!”
Why Not Amazon?
I know why the non-exclusive is a problem for the TV networks, but I can at least wrap my brain around the idea of the TV business model somehow getting to “break even” on what the rights cost. I can’t wrap my arms around how that would work for Amazon or why, in fact, the non-exclusive wouldn’t be just as big of a problem for Amazon when it comes to paying major big bucks for a rights package.
Despite posturing from networks, I can still make some sense of how it would/could work with linear TV’s business model where, increasingly, live content, particularly live NFL content, is critical to that business model.
But when I ask “are NFL rights critical to Amazon’s model?” the answer currently is, resoundingly, “no!”
Could Amazon do something big like buy CBS? Sure! That would be a HUGE story, but if they did that wouldn’t they want to milk every last drop out of TV’s current business model? Wouldn’t games on linear CBS still make more business sense than games exclusively on Amazon?
Regardless, especially in the attention economy, “It will go to Amazon!” is much (much!) more interesting than “Well, that non-exclusive thing is a problem but the league and its traditional TV partners will figure it out.”
I guess I’m not that interested in attention, I think the NFL and its traditional TV partners will figure it out. It makes more sense than figuring it out with Amazon.
Is the NFL Network costing the NFL more than it’s worth?
note: for me this is just a thought experiment and my numerical analysis here is incredibly lazy. I’ll cop to that but I’ll make like one dollar on this post — if I’m lucky! I still think it’s an interesting thought experiment. Interesting enough for outlets that charge thousands/year in subscriptions or the few folks making six figures who’d be more inclined to do the heavy lifting? That’s not my call…
My lazy man’s back of the envelope number crunching leads me to answer that question with “Maybe?”
To be clear NFL Network is a solid business that even with linear TV dying is still probably raking in somewhere around $1 billion to $1.5 billion dollars a year just in carriage fees. Add in advertising (which I’d guess is somewhere between $150 million to $300 million on top of that) and the fact that it’s a pretty high margin operation relative to its other TV partners and it seems like a pretty great business. In reality NFL Network doesn’t pay anything for its NFL rights — there may be some bookkeeping transaction that shows it does pay, but if so, it’s a transaction that zeroes out in the overall NFL ledger.
But when I think about where the linear business is going and partners who are willing to pony up on ten-year rights deals RIGHT NOW, the possibility of selling NFL Network or its assets in ways that add up to an exclusive Thursday night package for the buyer, and I wonder if, over the long haul, it’s possible the NFL Network really is costing the NFL more than it’s worth.
I love Good Morning Football and NFL Films content as much as the next person but I think that content would be fine somewhere other than NFL network. I’m thinking more ESPN+, but here an Amazon Prime exclusive just might work!