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NFL’s end zone dance

$8 bil deal extends CBS, Fox rights to six seasons

Reinforcing football’s claim as TV’s most reliable ratings engine, CBS and Fox have jointly fielded $8 billion to extend their National Football League broadcast rights for six more seasons.

Fox’s National Football Conference package translates to roughly $712.5 million annually, according to insiders, compared with around $622.5 million a year for CBS’ American Football Conference rights — up 25% from the nets’ previous pacts.

Separately, DirecTV has also extended its NFL “Sunday Ticket” package under a five-year, $3.5 billion contract that also dramatically sweetens its outlay for those rights.

Monday’s CBS and Fox announcements now focus attention on the fate of the primetime package shared by Disney’s ABC and ESPN.

“As we’ve said, our intent is to retain the Monday and Sunday night packages, and we will continue our ongoing conversations toward that end,” ESPN/ABC Sports prexy George Bodenheimer said in a statement.

ABC and ESPN have so far declined overtures by the NFL to seal a new deal a year early. The rights-holders’ exclusive negotiating windows don’t actually expire until October 2005, but CBS and Fox rushed to lock up rights now.

“There’s an advantage to being the incumbent,” said Viacom co-prexy Leslie Moonves, who said CBS began its “preliminary dance” with the NFL a few months ago. “This was a deal everyone liked and could deal with. I’m happy we don’t have to wait until the night before it’s due.”

Under the current eight-year pacts – set to expire at the end of 2005 — CBS ponies up $500 million a year for AFC rights, while Fox paid $550 million. (Fox’s NFC deal has been the more expensive of the two due to a preponderance of major-market teams in the conference.)

ABC, meanwhile, shells out $550 million a year for its “Monday Night Football” franchise, while sib cabler ESPN’s full season cable package costs $600 million annually. Split among those four networks, that totaled more than $17 billion over the entire deal.

The new NFL deals start in 2006 and essentially leave two buyers for the ABC/ESPN package, with NBC/USA network seen as a competing bidder.

Historically, the NFL has announced all its renewals simultaneously. But insiders have said that Disney is still mulling how much of a loss it’s willing to bear to keep “Monday Night Football” as a loss leader. The franchise remains one of ABC’s top-rated programs, but frustrates the net’s entertainment programmers, who must schedule around it in the fall — and then fill that Monday night hole come January.

On the flip side, “MNF” is still a top draw for men, network TV’s hardest-to-reach demo. And ESPN’s football deal remains profitable. The pressure’s on Disney to retain the rights if NBC Universal is serious about acquiring them.

NBC U declined comment, while Peacock sports topper Dick Ebersol was in Beijing for Olympics-related meetings and unavailable for comment.

Pro football is by far and away the most popular sport ratingswise, making it a crucial element for the networks involved — particularly, perhaps, CBS, which lost its rights package to Fox in the early 1990s, then reclaimed it by nabbing NBC’s rights in 1998.

Fox, meanwhile, took advantage of football to improve its distribution in the early 1990s and secure its place as a major network.

“In this highly fragmented world in which we live … live sports is only growing in importance,” News Corp. chief operations officer Peter Chernin said during a conference call.

Fox paid $2.5 billion in 2000 for an exclusive six-year Major League Baseball deal, and splits NASCAR’s annual $400 million pricetag with NBC, Turner and sib FX.

CBS has insisted, to some skepticism, that the network has made money on its existing NFL deal, and both Moonves and Chernin said they expected their respective agreements to be profitable. Fox wound up taking a major write-down against its current package, and ABC is also losing money on “Monday Night Football.”

Following the blockbuster 1998 deals, both nets asked their affiliates to help cover part of the pricetag by trading local ad time and other means. After sometimes-contentious negotiations, affils and nets struck various deals.

More recently, CBS cut a deal with affils to share the cost of the Eye’s $6.2 billion NCAA basketball deal.

Moonves said the new deal came down too quickly to discuss with affils, but that he expected their “full cooperation.”

“They know how important the NFL is to the network,” he said.

Each network also earns broadcast rights to two Super Bowl games, traditionally the year’s most-watched event, during the six-year broadcast extension. Eye will air the 2007 Super Bowl, with others to be announced later.

Both nets have also pledged to add more high-definition TV coverage in the new package, while the NFL may now have the right to move some late-season Sunday games to Monday night.

As for the DirecTV deal, pact –which gives the satcaster exclusive rights to “NFL Sunday Ticket” games through the 2010 season — is worth $700 million a year, up from the $400 million it now pays. The deal includes a carriage agreement extension for the NFL Network, as well as the launch of a new “Red Zone” channel.

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