Tuesday, December 5, 2006

Missing NFL Network? Blame "Sunday Ticket" deal.

Back-to-back matchups of AFC playoff contenders kicked off the NFL Network's Thursday night series of late regular season games in November. These games averaged around 4 million viewers - one-third the average audience for ESPN's Monday Night Football. Take into account that these games also air on broadcast TV in the primary media markets of the participating teams, with the home team's market getting the game as long it is sold out 72 hours before game time, and the numbers provide a glimpse of the uphill challenge the NFL Network faces.

When the NFL was moving forward with the launch of its own network in 2003, did the league and its owners believe that the addition of late regular season matchups to the network's slate of programming would be enough to entice major cable players like Time-Warner and Cablevision to add the channel to basic tiers? The lack of NFL Network on major cable systems can likely be attributed to payback on the part of the cable owners for being shut out of the opportunity to make the NFL's lucrative Sunday Ticket pay-per-view package available to cable customers.

Currently, DirecTV has an exclusive deal with the NFL, making them the sole provider of NFL Sunday Ticket in the United States until 2010. Past history suggests DirecTV will try to renew the contract before the deal expires to hold onto this key marketing piece for continued subscriber growth. Prior to the NFL's latest television deal, other satellite and cable providers were allowed to bid on the rights to carry NFL Sunday Ticket if they agreed to carry the NFL Network. However, DirecTV still won exclusivity for the package, bidding over $700 million a year to do so.

The lack of viewership or interest can be attributed solely to the lack of NFL Network's presence on some of the nation's major cable systems. Both major satellite TV providers - DirecTV and Dish Network - have added the channel on their basic tiers, reaching more than 27 million subscribers. Two major cable providers, Comcast and Cox, are carrying the NFL Network, with Comcast only making it available on its digital tier to less than a third of its total subscribers. Cablevision, Time-Warner and Cablevision have balked at adding the channel in a disagreement over placement (NFL Network wants analog or digital basic carriage, while operators advocate tier positioning) and cost (about a 70-cent monthly subscriber fee).

While the money and will of the NFL owners will be enough for them to wait out this battle with the cable operators, the recent actions by cable giants Cablevision, Time-Warner and Charter must have NFL execs scratching their heads a bit about the decision to ink the exclusive DirecTV deal.

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