Darren Rovell is on assignment and unable to post today - but Sports Bizlives on. Today's special Sports Biz Guest Blogis from Maury Brown, a sports business analyst and founder of the Business of Sports Network.
How Television Plays a Huge Role in Whether the NFL Sees a Lockout in 2011 by Maury Brown
Flash-forward to 2011.
The NFL is within the throes of a lockout.
Players have formed picket lines.
Stadiums, once teaming with fans, sit silent.
Instead of CBS, FOX, NBC, ESPN and the NFL Network showing you games, you’re getting the likes of tennis or bowling as part of replacement programming.
For the networks, at least they can say that they’re saving themselves hundreds of millions (or, in one case, billions) of dollars while the players and owners hash it out, right?
Well, not entirely.
Believe it or not, in the case of a strike or a lockout, the networks are still on the hook to pay the NFL the same amount as if the games were going to be played.
And, when money pours in, even when games aren’t played, it makes it a very real possibility of a work stoppage in the NFL.
The NFL, of course, will say that they have to pay back the money funneling in during a lockout, with interest, mind you, in the form of rebates.
But, that’s not entirely true.
While the NFL has been keen on outliningthat the billions of dollars that pour into the league’s coffers needs to be paid back, satcaster DirecTV does not have this luxury.
DirecTV pays the NFL $700 million annually to carry NFL Sunday Ticket, the out-of-market subscription package. The NFL and DTV agreed at the time of their five-year contract that in the event that a work stoppage, DirecTV would not be rebated after play resumed based on the NFL’s position that just by having the NFL on their listing, DirecTV gains subscribers.
And when you think about it, the league really has two television-related reasons for locking the players out. Sure, the $3.085 billion a year that CBS, FOX, NBC, and ESPN pay for the right to air NFL games has to be paid back, but if owners are able to get player salaries decreased, a portion of that money gets absorbed.
And then there’s the DirecTV money that doesn’t have to be paid back buffers the owners further.
So, television, that won’t be broadcasting games, yet paying regardless, is a huge player in whether the NFL sees a lockout in 2011 when the current collective bargaining agreement expires. Pass the popcorn, and enjoy the upcoming season.
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Maury Brown is a sports business analyst and founder of the Business of Sports Network, a series of expansive resources dedicated to the business of sports. He can be reached at maury@businessofsportsnetwork.com