TV station owners and the NAB need to develop a sense of urgency about the vital importance of marquee sports to broadcasting's future. By allowing ESPN and other cable nets to siphon away top contests like this week's BCS Championship, the smaller the medium becomes in the eyes of the public, investors and policymakers..
Broadcast TV Must Stem Sports Migration
That was quite a game. Oregon ties it up with just over two minutes left, only to see the game and the BCS national championship slip away when Auburn drives 73 yards and kicks a 19-yard field goal as time expires.
It was also quite a TV show. According to Nielsen, the game attracted 27.3 million viewers on a 15.3 rating.
Unfortunately, the show was on ESPN — the too-rich cable network that outbid Fox for the major cable bowl games two years ago. That 2008 rights contract went off like a time bomb right in front of broadcasting at 8:30 p.m ET last Monday night.
And, as you might have guess, it was the highest rated show in all of cable history, surpassing ESPN’s Monday Night Football telecast of the New England Patriots-New Orleans Saints game on Nov. 30, 2009.
ESPN buried the broadcast networks that night. Fearing the worst, only two of the Big Five even bothered to air original shows.
This has got to stop. Affiliates cannot afford to lose any more big games. They have to be tuned in to when these rights come up for renewal and then work with each other and their networks to make sure they hang on to what they’ve got.
Last September, in an interview with TVNewsCheck, Hearst Television CEO David Barrett said he was unconcerned about the loss of big-time programming, pointing out that TV broadcasting was all about local news these days.
I don’t know about that. The more powerhouse programming broadcasting loses, the smaller the medium becomes in the eyes of the public, investors and policymakers.
It really wasn’t the Oregon-Auburn game that inspired me to revisit this topic for the third time in the past two years.
What did it was a story the week before in Sports Business Daily, which covers TV sports rights as WABC covers a nor’easter bearing down on New York.
According to the story, ESPN and the NFL have just agreed in principle to a long-term extension of their Monday Night Football deal that would boost the rights fees as much as 70% to between $1.8 million and $1.9 billion a year. The deal will run through the 2022-23 season.
This can only mean that the NFL will seeking big increases when it starts talking to CBS, Fox and NBC this year or next about contract renewals. The current deals, signed in 2009, expire after the 2013-14 season.
Broadcasters are on notice.
The networks and the affiliates have to push hard for retransmission consent increases from cable and satellite so that they will be able to play in the big rights game. Remember, ESPN is getting $4 per sub per month, while the typical TV station is getting just 25 cents. That big gap needs to be closed.
And to the extent the affiliates kick back a portion of their retrans fees to the networks, they should earmark it for sports rights and other costly programming.
Meanwhile, the NAB also has some work to do. First, the trade group must put together the whole sad history of sports migration from broadcasting to pay TV (it began in the 1970s when theaters and HBO snatched away the big heavyweight fights) and submit it to the FCC as Exhibit 1 for why the retrans rules should not now be bent to favor cable and satellite. The FCC has said it would launch a proceeding to consider retrans reform early this year.
Second, the NAB has to make the loss of big-time sports on free TV an issue in Washington again. When Congress speaks, the NFL and the cable industry listen. What broadcasters’ need Congress to say is that the playoffs and Super Bowl must stay on free TV to the end of time. The same goes for the MLB and the World Series.
It was discouraging to see the bowl games move to ESPN in 2008 without a peep of official protest. The silence was also deafening last year when CBS relinquished the Final Four college basketball tournament to Turner every other year starting in 2016.
Right now, I’m not sure how loudly Congress would squawk if some of the NFL playoffs strayed to pay TV in the next rights deal.
Of course, the best way to get Congress stirred up is by working the grassroots. But that’s harder to do because broadcasters have allowed their OTA audience to erode badly. With NAB in the lead, broadcasters need to promote OTA, even if puts a dent into their retrans revenue.
Big event programming is one of the reasons that mobile DTV is so important to broadcasters. If they can extend their reach in the mobile world, they can that can reverse the decades-long erosion in viewership. That extra viewership and the ad revenue that comes with it could be the difference is keeping the NFL playoffs or losing them to ESPN or Turner, the other sports-hungry cable programmer.
With mobile, broadcasters will also be creating a whole new constituency for free TV.