The NFL is big business.
Even the most lopsided games on NBC's Sunday Night Football package ended up doing solid numbers in the ratings. So it's absolutely no surprise the NFL is looking to expand it partnerships. For years, the NFL has had a Thursday night package of games exclusive to its network, but come this year that may change. The league has gone out to the media and invited them to bid on those selections of games. A number of companies are expected to submit, but realistically it only really makes sense for a handful.
Let's break down the contenders and look at how it would affect their business...but first a few of the ground rules. Reportedly this is a one-year deal with two caveats: the games be simulcast on NFL network and the Thursday night season opener and Thanksgiving night capper remain exclusive to NBC. Other than that, the league is open to negotiations.
ABC (a subsidiary of Disney (NYSE:DIS)) is the most likely network to make a bid -- and probably a big one at that! Of the Big 4 networks, it is the only one NOT to have football on their schedule. Yes, sister network ESPN has the Monday Night Football package, but ABC has been out of the game for a while and can't be content to see its rivals continually cash in every week.
Potential impact on network:
Simply put, it would be a game changer. However it would also cause a chain reaction internally as it would displace the network's current Thursday night slate, which includes Grey's Anatomy and Scandal. While that sounds like a big deal, it could actually be the best thing for ABC.
Kicking off Thursday nights has always been a nightmare for executives. Not since 2006 and Ugly Betty has ABC really launched a successful scripted show in that timeslot. In fact the only thing that has worked there is reality smash Wipepout, but that's a seasonal solution at best.
Taking 8 p.m. out of the equation leaves you with Grey's and Scandal, which are two formidable shows. However both have the same problem, which is the constant start/stop that comes with a season-long show. ABC's solution this year was to break a number of dramas (including them) into two 12-episode chunks that would go uninterrupted with a two-month hiatus between them. It was a actually a smart move. The problem is that the first two of those short-term replacement series were yanked two weeks into their eight-week runs (a 0.7 rating in the 18-49 demographic will do that every time).
Yet, by adding the football package, ABC could shift both shows to midseason and let them run uninterrupted without that hiatus. It also erases the 8 p.m. black hole (temporarily) and gives the network two proven series on its midseason slate. Even if the package is bought by ESPN and the games are simulcast on (or flat out given) to ABC, the added numbers would help it further distance itself from NBC, Fox and The CW, while taking a bite out of current leader CBS. It would be a big deal for both ABC and the primetime TV landscape.
Current NFL license holders (CBS, NBC, Fox)
Obviously all three networks will have interest as the NFL does big business for them and they would love to extend that, but it doesn't make sense for all of them. CBS (NYSE:CBS) for example has spent the last few years quietly becoming Thursday's ratings king and now that it is, the network isn't going to shelve three hours of programming that consistently delivers; it would just be bad business.
Potential impact on network:
Taking CBS out of the equation that leaves NBC (a subsidiary of Comcast (NASDAQ:CMCSA)) and Fox (a subsidiary of News Corp (NASDAQ:NWS)), which both could conceivably ditch their current Thursday lineups -- and to be honest, NBC's Thursday slate is in freefall and will probably be completely overhauled in the fall regardless. Should either of those two get the package, it instantly makes the winner a more dangerous force.
For NBC, the network would then have two nights of football, plus its handful of marquee series to carry it higher in the ratings. Yet, NBC has so far been unable to successfully program the back half of its season for when football ends. As a result, as much of a blessing as this package could be for NBC in the fall, the network could easily end up shooting itself in the foot for the spring (and beyond).
Fox is still committed (for now) to a mix of reality and scripted programming on Thursdays, but football has a way of changing a network's perspective. Still, Fox already has at least six fewer hours of programming a week than its rivals as it turns the 10 p.m. slot over to its local affiliates. Fully abandoning original series on a weeknight could actually put the network at a financial disadvantage in the long run as it could fall behind its rivals in launching (and sustaining) new hit series.
Yes, I said Netflix (NASDAQ:NFLX). Believe it or not, rumors are circulating that Neflix could make a play for the package. As crazy as it sounds it could actually work! Netflix already has become a major TV player and adding the NFL slate would make it an even more formidable opponent for the major networks.
Potential impact on network (and industry):
This could be an ideal situation for the NFL, which would basically have its cake and eat it too. Should Netflix get the package, it would have exclusive streaming rights (at a premium price of course) and the NFL Network would retain sole broadcast rights. It's actually pretty genius, if you think about it. It also puts the other top networks on notice that Netflix is only going to get more dangerous.
Turner Sports is also expected to make a bid, which wouldn't really be as much of a game changer as if a broadcast network or streaming service wins out. Honestly, Turner probably makes the most sense as it continues to build the NFL's presence on cable and it keeps one of the current license holders from getting bigger than the others. In some ways, as a consumer you want and need that balance of power to remain intact.
Bids for the package were due on Jan. 17, and the NFL hasn't announced when it will make its decision. But you can trust that industry analysts are more focused on this outcome than even the final score of the Super Bowl.
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Fool contributor Brett Gold owns shares of CBS. The Motley Fool recommends Netflix and Walt Disney. The Motley Fool owns shares of Netflix and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.