[CBFF] Article: NFL and Direct TV

[Steve Behrens]

Just stumbled upon this article, even though it was written before week 15
of last years game, I thought it was a good read concerning the NFL and
their deal with Direct TV.  The full article (with some other observation,
picks, etc, can be found here:
http://blogcritics.org/archives/2005/12/29/232113.php



 [image: Blogcritics.org] <http://blogcritics.org/>





I am sick: head congestion, sore throat, cough. The symptoms roughly
correspond to a cold, but I am convinced it's something worse. Like
pneumonia. Or Bird Flu. Hell, maybe it's a tumor. Whatever the case, I'm
pretty sure I'm at death's door. Lucky I have made my mark on this world
through my legacy of football picks.

At least if I reach Heaven I can count on having NFL Sunday Ticket, or maybe
I can just look down and see any game I want and even fly down for a close
up view of the line play once I get my wings. On the other hand, if I wind
up Down Below, my guess is the football viewing is pretty close to what I
have now: the only sure thing is that the Lions game will be on.

Actually, in Hell, all games are Lions games.

But seriously, we live in an on-demand age. I can listen to any music I
want, at any time I want, and have the choice of buying or renting it. I can
time-shift movies and TV or simply order them when I'm ready to watch.
Anything that isn't already on-demand is moving in that direction. How long
do you think it will be until I can get my Rhapsody playlist streamed to my
car? Or how about the entire inventory of Blockbuster ready to order through
my digital cable box?

So then why is it that I can only get a predetermined set of football games,
theoretically tailored to my geographical market by some NFL bureaucrat?
Instead of getting what I want, I get what some suit's idea of what a
typical person who lives within a couple hundred miles of me might want to
see on average. Did we take the time tunnel back to the Stone Age?

For those not familiar with NFL Sunday Ticket, it is an extra cost package
that gives you access to any the game you want (with a minor exception now
and then). That's a pretty simple model. Pay roughly $250 up front and
you're covered for the whole season. There are even optional add-ons like
Short Cuts, a replay of an entire game with nothing but the plays,
everything else is edited out. You can watch an entire game in 30 minutes.
Cool, eh? All in all, it's a nice package; I would buy it every year without
a second thought. The problem is, it is only available with DirecTV. That's
right, no cable TV customer can have access to this; it is for DirecTV
subscribers only.

As much as I love watching football, I am not giving up my digital cable for
it. So that means, if I wanted to see all the NFL games, I would have to
have DirecTV installed and pay the Direct TV subscription of roughly
$60/month plus the $250 for Sunday Ticket. Suppose I could arrange to do it
for only five months out of the year for football season, that still jacks
up the price of seeing the football games I want to $550 per year.

Yet even if I were willing to pay that, I still couldn't do it. DirecTV
requires a south facing line of sight for their little satellite dish to
work. Sorry, I don't have that. For me to get NFL Sunday Ticket I would have
to buy a new house, which jacks up the expense a bit. But my personal issues
aside, why would the NFL grant this privilege to DirecTV, thus assuring it
is only available to the relatively small cross-section of insane football
fans who are financially willing and technically able to have DirecTV
installed?

The answer, as always, is money. DirecTV paid the Dr. Evil-worthy sum
of 3.5billion dollars to the NFL for this exclusivity. And the rights
are locked
up through 2010. According to this
article<http://www.multichannel.com/article/CA480250.html>,
cable TV negotiators were "blown away" by how much DirecTV was willing to
offer, but it's not all that shocking. NFL Sunday Ticket is the only thing
that matters to DirecTV. It is just about the only reason to choose
satellite over cable, especially now that cable companies are offering
discount packages that include broadband and phone service. They really had
no choice. If they lost Sunday Ticket, they could just pack it in and call
the bankruptcy lawyers. Note this quote from a DirecTV exec:

DirecTV will generate about $385 million in revenue this year from Sunday
Ticket, and revenue has grown 20% during the past two years... If DirecTV
grows its Sunday Ticket revenue each year by 11% to 12%, the company will be
able to break even on the rights deal...

That doesn't sound all that promising for DirecTV. If all you have to hang
your hat on is Sunday Ticket and your target for Sunday Ticket is to break
even, well, that's not what I would call a robust business plan.

The NFL does this because they believe that by limiting out-of-market
viewers to the niche audience of DirecTV, they can continue to extract
outrageous sums from the old-school networks for the market limited
offerings they currently provide. It's the best of all worlds for the NFL.
DirecTV pays them an exorbitant amount for exclusive out-of-market game
rights, but the DirecTV audience is small enough that the traditional
networks (FOX, CBS, ESPN, etc.) don't freak out at the competition and don't
balk at paying an exorbitant amount for their usual line-up of games. The
League is swimming in green.

The odd man out here is, of course, the football fan. You have to shell out
some healthy cash for the privilege of jumping through DirecTV's hoops to
see out-of-market games, or you live with what the NFL thinks you should
see. And it's going to be that way for the next five years at least. In
other words, it'll be 2011 before the NFL can even consider stepping into
the '90s. How lame is it that I can't just contact Comcast and pay $5.99 or
thereabouts to get the game I want to see, like I can with most other
sporting events? So much for the on-demand world.

Can you imagine a more lucrative business than the NFL? Internally it is run
like a totalitarian communist autocracy, but externally they are savagely
capitalist. Sort of like what would happen if Josef Stalin mated with Ayn
Rand. So many other businesses survive by their connection to them that they
pay ludicrous amounts of money for sponsorship contracts just to stay
solvent. And governments (read: taxpayers) finance their major investments
in fixed assets. It's good to be king.

Believe it or not, there was a time when things were worse for viewing
football games. At least we get Sunday and Monday night games. When I was a
mere lad, there were no prime time games. You got the Lions game and one
other in-division game on Sunday. Apart from that, you lived with 30 seconds
of highlight clips on your local news broadcast. It was the dark ages.
Didn't have none of your high-falutin' ESPN *Sportscenter* or your HBO *Inside
the NFL*.

*Monday Night Football* opened a whole new world. I would wake up Tuesday
morning and be looking forward to Howard Cosell doing the half-time
highlights. I'm sure my Mom had to come in and turn off the little black and
white TV in my bedroom every Monday, because I couldn't keep my eyes open
past half-time.

*MNF* didn't put prime time sports on the map; most localities broadcast the
local team's baseball games at night all summer long. What it really showed
was the viability of out-of-market games as prime time programming. It could
have been two lousy teams from the west coast, but it was still the highest
rated show in the Detroit market. When *MNF* came along, we finally saw the
marketability of the game itself, rather than just the local team.
Besides *Sunday
Night Football*, *MNF* begat *Monday Night Baseball*, which begat TBS and
WGN cable casting Braves and Cubs games nationwide, which begat any number
of cable operators showing night baseball and NBA games. Interesting that
even though it started with the NFL, MLB and the NBA are more flexible in
their scheduling now.

This Monday marked the last ever *Monday Night Football* broadcast on ABC.
Next year it moves to ESPN (and ESPN's Sunday night game moves to NBC),
where presumably the excruciating crew of ESPN Sunday night announcers will
take over. Ironically, one of the legendary *MNF* highlights is the gruesome
scene of Lawrence Taylor breaking Joe Theismann's leg. Now Joe gets to be
the color man on Monday Night Football. I wonder how many people will tell
him to "break a leg" before his first show. Let's hope NBC, which takes over
Monday night's game, will be able to do a quality job. They'll have Madden;
if they pair him with someone sharp (Costas maybe? You could add Jaworski
for even more insight...) and avoid Hank Williams Jr.-itis, they may do
well. Personally, I'd bet they do something stupid like hire Terrell Owens
when he gets suspended next time, or have William Hung do the half-time
soundtrack, or have Richard Lewis do color.

By the way, I once saw Joe Theismann waiting for a plane at Dulles airport
in DC. He was wearing these obnoxious salmon colored Bermuda shorts.
Definitely not on his color chart. He dresses as obnoxiously as he
announces. He's not much bigger than me. I think I could've pantsed him. I
should have just on general principle. And maybe called out, "LT says
Hello," as I was running away. (Yes, I know it's apropos of nothing, when
you're lying in front of the TV hacking up chunks of your internal organs,
life's regrets are particularly vivid.)........