Nets sweat out sports deals

Riding ratings highs, NFL and NBA in nasty labor wars

While fans nervously follow professional sports’ labor wars, there is another jittery group on the sidelines equally glued to news updates — broadcasters.

That’s because sports have been very good to them of late, with games of the NFL and NBA performing beautifully and the Super Bowl setting a new ratings record. But highs are giving way to uncertainty with the NBA players’ contract expiring June 30 and the start date of the new football season still very much in question.

“I’ve lived through at least two NFL work stoppages and you just have to scramble,” former CBS Sports president Neal Pilson said.

Between the two sports, the NFL is the most difficult to replace. No sport comes close to delivering its Nielsen numbers. Along with its overall performance, pro football has been the most successful sport at attracting women. With 33.6% of its audience being female last season, the NFL has tremendous appeal to advertisers.

With the league’s schedule spread out over five broadcast entities — CBS, Fox, NBC, ESPN and the NFL Network — each net will have to address the potential loss differently. While ESPN should be able to substitute with college football and other sports programming, and NBC, which broadcasts on Sunday nights, able to rely on entertainment content to fill the void, the slots that would be most problematic are Sunday afternoons on CBS and Fox, according to Pilson.

NFL Network, which has a relatively small package of live games, would likely fill with negotiation news and broadcasts of vintage games.

“Fox and CBS could send the time back to the affiliates or they could acquire programming on a short-term basis,” Pilson said. “But with the possible resumption of the NFL at any time, you can’t make an investment on rights fees because you don’t know if the program will air.”

Notably, of all the networks with NFL deals in place, it’s sports net ESPN that might feel the least pain, at least in the short term, in the event of lost NFL games. Unlike broadcasters, which reap coin via ads, the cable network benefits from a dual revenue stream that includes fees paid by cable operators based on a system’s subscriber base.

Meanwhile, NBA broadcasters, which include not only national nets but also numerous regional sports networks, are facing a different set of problems. On one hand, the timing of the season (October to June) means there are more programming alternatives such as college basketball and football, and even baseball. Nevertheless, for some RSNs, NBA basketball is a central selling point for subscriber bases, notes sports business expert and U. of Oregon professor Dennis Howard, pointing to deals Time Warner Cable recently signed with the Los Angeles Lakers, and Comcast inked with the Portland Trailblazers.

As for broadcasters, sports media consultant Lee H. Berke, who has worked with both the NFL and NBA, is convinced they will not take a sustained hit from current labor woes.

“There is short-term pain for every game lost,” he says. “But the long-term pain will be nil. Ultimately both these leagues will settle. If a network lost five games, five games will be added to the deal. If you had advertisers who were supposed to be on those five games, you will be able to take care of them. If you’ve paid rights fees you will (eventually) get the value.”