For the TV networks and sports media outlets that cover the league, this has been most welcome. But as the calendar flipped to July, with NFL training camps set to open at the end of the month, doubts surfaced about the viability of a football season. Novel coronavirus cases are spiking in states across the country. Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, said football players may need to be in a bubble environment for the season to be played. Los Angeles Rams Coach Sean McVay wondered aloud how teams will be able to both play and take precautions.
“I mean, we’re going to social distance but we play football?” McVay said during a recent media appearance. “It’s really hard for me to understand all this.”
While there remains plenty of optimism the NFL will play — somehow, someway — networks are fixated on the league’s fall schedule given its dominant position as America’s most valuable television property. They are invested, of course, in the planned returns of Major League Baseball, the NBA and other sports, but none carry the importance of the NFL, which accounted for 41 of the 50 top-rated telecasts of any kind in 2019. The lack of certainty has led to uncomfortable conversations among executives.
“It’s practically the only thing on the minds of the networks,” said John Kosner, a former ESPN executive who is an industry consultant. “If you lost an NFL season, you’re looking at a financial hemorrhage.”
All four networks that broadcast the NFL — CBS, ESPN, Fox and NBC — declined to comment on their contingency plans or thoughts about the 2020 season. But a senior ESPN employee recently lamented that there is no fallback plan even worth considering if the NFL cannot play, because nothing can replace the content or revenue that comes with it, according to a person with knowledge of the discussion. At Fox Sports, at least one executive has told an employee that no NFL season would mean trouble for the network, according to multiple people familiar with the discussion.
No network is more dependent on the NFL than Fox, which pays more than $1.5 billion each year for two NFL packages: one on Sunday afternoon and the other on Thursday night. The NFL, including pre- and postgame coverage, accounted for nearly 40 percent of the minutes spent viewing the network last year, according to research firm MoffettNathanson.
For the league’s other broadcast partners, the NFL’s share of minutes viewed was smaller but still a hefty 10 to 13 percent last year. ESPN pays roughly $2 billion for “Monday Night Football,” CBS pays roughly $1 billion for its Sunday package, and NBC pays $950 million for “Sunday Night Football.” All bring in massive amounts of advertising revenue for their NFL games.
Data compiled by advertising measurement firm iSpot illustrates how valuable the league is in terms of ad dollars. Last football season, CBS raked in roughly $1.5 billion in NFL advertising, which represents nearly 25 percent of the network’s total advertising haul for 2019 (not including the Super Bowl). NBC collected shy of $1.5 billion, also more than 20 percent of the network’s ad dollars for last year.
Fox was the most reliant on the NFL, bringing in nearly $2 billion from the league’s games last season, not including the Super Bowl — an amount that would be nearly 40 percent of the network’s overall ad revenue from 2019. Additionally, advertisers that buy into NFL games often also must buy packages for other programming across a network’s schedule.
The NFL numbers at ESPN were somewhat less significant — around $500 million and less than 20 percent of its advertising revenue — but they don’t come close to capturing the importance of NFL highlights and discussion segments to the 24-hour cable network’s studio programming. ESPN is also the network that is likely to be hurt most by a canceled or shortened season for college football, which is considered by health experts to be at greater risk than the NFL because of its lack of a central authority, its varying testing policies and the uncertainty over whether students will be able to return to campuses this fall. ESPN and its Disney-owned broadcast partner, ABC, received more than $1 billion in advertising revenue from the sport last year.
The NBA and MLB are more important to regional sports networks. The entire MLB season and playoffs delivered less than $700 million to national broadcasters ESPN, Fox, Turner and MLB Network in 2019. The entire 2018-19 NBA season and postseason accounted for a total of roughly $1.5 billion for ESPN, ABC, Turner and NBA Network, according to iSpot.
Since the pandemic began, ESPN, Fox and NBC have asked top talent to take pay cuts as they treaded water waiting for sports to return. Current and former executives predicted far more drastic developments without an NFL season — from laying off workers to severely cutting costs to having to take out large loans. One former Fox executive predicted studio shows would be hit the hardest.
“As the recent COVID-19 data points turn more negative, we are growing increasingly worried that the scheduled return of all sports in the coming weeks and into the fall will be impacted in different ways, leading to more pain for our media companies,” read a MoffettNathanson report published in late June.
In the longer term, said David Hill, a former president of Fox Sports, missing an NFL season hurts the broadcast networks in their battle for relevance against streaming services such as Netflix. Their main advantage in that struggle, Hill said, remains the NFL, and sports continue to be one of the key drivers for consumers paying for cable packages. According to MoffettNathanson, traditional paid TV subscriptions fell by 1.8 million in the first quarter of this year as the pandemic hit and live sports were mostly canceled. It was the highest-ever rate of cord-cutting in a single quarter.
“The NFL is absolutely key because it plays into the essence of what the network is,” Hill said. “It’s becoming the only way that networks can talk to consumers. If families are sitting in their living rooms watching the streamers and they’re not turning on the networks for the NFL, there’s going to be less awareness in anything they’re doing.”
Regardless of whether the NFL season goes ahead, the league’s broadcast agreements are set to expire in 2021 and 2022, meaning the same networks will have to pony up what many observers expect to be large increases in rights fees — possibly as much as double the current figures, some industry insiders believe — even as they are potentially scrambling to patch budget holes for the current year. This week, Fox ended its broadcast agreement with the U.S. Open golf tournament several years early, a move that indicates a further commitment to its core properties, the biggest of which is the NFL.
“If you miss the NFL season, I think it makes the networks even more desperate to sign it again,” Hill said.
Still, alongside the simmering concern about what a lost season might do to the networks is the hope for what a season could mean. Given the high ratings for the draft, plus the possibility that fans won’t be allowed to attend games and people could still be limited in what they can do outside, there remains the chance 2020 could be a banner year for NFL broadcasts.
Hill said that, for whatever uncertainty exists now and in the coming weeks, he believes the NFL will find a way to play its season.
“It’s one of the very rare, absolutely must-have items,” he said. “And I would imagine that everyone being locked inside would be good for them, too.”