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With television ratings on the rise and attendance flagging, NFL faces a business dilemma

By Mark Maske
Washington Post Staff Writer
Sunday, September 19, 2010; 12:51 AM

The NFL has spent decades working to make itself the nation's leading television sport, an effort that has yielded billions of dollars in network contracts and TV ratings that are the envy of every other pro sports league.

But as ratings continue to soar early in the new season, the NFL is facing a new business dilemma: declining attendance at the games themselves. The NFL expects attendance to drop for a third straight season and is projecting that as many as 20 percent of its regular season games will be blacked out on TV in the home team's market when stadiums fail to sell out 72 hours before kickoff.

League executives and franchise owners say they're concerned that the sport has become so good to watch on television, especially in the age of big screen, high-definition TV, that many fans are choosing in a tough economy to avoid the traffic, crowds and costs of going to stadiums in favor of watching in the comfort of their living rooms.

"We would have our heads in the sand if we ignored the trend," said Eric Grubman, executive vice president of NFL ventures and business operations. "We've spent 20 years building an at-home alternative that we think is nothing short of awesome. But we don't want to do that at the expense of our in-stadium experience. We still think a stadium is the best place to watch a game."

NFL Commissioner Roger Goodell said at an offseason owners' meeting that "the issue for us is we are our own competitor," noting that features such as high-definition TV and the NFL Network's RedZone, which allows viewers to monitor multiple games simultaneously "do make it attractive to watch on television. . . . Our challenge is to continue to make it exciting for people to come to our facility."

The number of blackouts is nowhere near the level of previous decades, and the NFL remains television ratings gold. TV ratings last season were up 15 percent over 2008 numbers. The trend continued in the opening week of this season. The NFL's season-opening game Sept. 9 between the Minnesota Vikings and New Orleans Saints drew 27.5 million viewers on NBC, the most since the league began playing its opening game on a Thursday night in 2002.

Last Sunday's late-afternoon game on Fox (mostly Packers-Eagles) drew 28 million viewers, the most ever for a Week 1 Sunday game. The Washington Redskins' opening triumph over the Dallas Cowboys last Sunday night on NBC had 25.3 million viewers, a record for a Sunday night game.

Overall it was the NFL's most-watched opening weekend since 1987. The Saints' and Redskins' victories were the two highest-rated prime-time shows on television that week.

David Carter, executive director of the Sports Business Institute at the University of Southern California, called the ratings more good news for the NFL, an $8 billion-a-year enterprise that earns about $4 billion annually from its national TV deals with Fox, CBS, NBC, ESPN and DirecTV.

"If you're off a few percentage points in attendance but finding a way to monetize consumption of the product in other ways, I think you're okay," Carter said. "It would be different if attendance was down and consumption was down. But that's not the case. Consumption is up."

Leah LaPlaca, ESPN's vice president of programming and acquisitions, called the NFL "the ultimate reality television." She said the sport's TV viewership and live attendance are "complementary" because fans want a shared experience, whether it's watching a game in a stadium or on TV in a group setting. A full stadium makes for good TV because it conveys the excitement of the event, she said.

"There's no doubt from a television perspective, we love to see full stadiums," LaPlaca said.

According to Grubman, the NFL expects ticket sales to decline 1 to 2 percent this season after being down about 2.2 percent last season. Season ticket sales league-wide are down about 5 percent this season, Grubman said.

"I think the economy is really hurting our fans," Grubman said in a telephone interview. "We know it. We see it. We hear it. They tell us they're not leaving for good. They're just staying at home."

League-wide attendance declined from a record 17.3 million in 2007 to 17.1 million in 2008 to 16.7 million last season. NFL officials are projecting that this season's average attendance per game will be the league's lowest since 1998.

In response, the NFL has taken steps to improve the stadium experience. The league imposed a fan conduct policy in 2008 to try to make stadiums more family-friendly by curbing abusive language, obscene gestures, drunkenness and other forms of rude behavior in the stands. Among this season's changes, according to the league, is a modified noise policy that eases restrictions on video-board messages used by home teams to urge fans to cheer at certain points during games.

There also has been an effort to bring more technology into stadiums that enables fans to track not only the game they're watching, but other games and, potentially, the players on their fantasy football teams. Three teams, including the Redskins, have new HD video boards. The NFL RedZone Channel, with its live look-ins at games around the league when an offensive team is in scoring position, is available in all stadiums.

"If you're sitting there, it's a 10,000-inch plasma, much less a 50-inch plasma," Grubman said. "There's no reason for you not to get your tour around the NFL if you're in a stadium."

Teams are offering low-cost ticket options. The Super Bowl champion New Orleans Saints increased some ticket prices this season, but still offer a season ticket at $25 per game. The Buccaneers offer some season tickets for $35 per game and $25 for children.

The average price of a general-seating ticket in the NFL last season was $74.99, according to Team Marketing Report, an independent newsletter that follows sports business issues. That would put the average season ticket at close to $750, for eight regular season and two pre-season games.

Meanwhile, a full-season subscription to DirectTV's "NFL Sunday Ticket" package, which allows a viewer to see every Sunday afternoon game every weekend (except games blacked out in that viewing area) costs $319.95, according to the satellite provider.

Last season, said Buccaneers spokesman Jonathan Grella, Tampa Bay and other organizations helped prevent blackouts by purchasing unsold tickets, but can't do that indefinitely. The NFL sometimes grants ticket-selling extensions to teams that are close to sellouts and has eased reastrictions on the 17,000 free tickets each team is allowed to distribute to youth groups, military personnel and others.

Sen. Sherrod Brown (D-Ohio) wrote to Goodell recently, urging the commissioner to consider changing the NFL's blackout policy.

"While I understand the need for the league to sell tickets and maintain an attractive television product, NFL blackout policies should be revisited as our nation faces the worst economic crisis in generations," Brown wrote.

Grubman said the league does not intend to change the policy.

"We think the blackout policy protects the league, our partners and the long-term viability of the model," Grubman said.

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