Football has come a long way -- and I'm talking about a lot more than just the hundred yards that separate the goal lines. Last night DirecTV (NYSE:DTV) announced a $3.5 billion deal with the National Football League that will extend its killer app -- the NFL Sunday Ticket -- another five years.
Just 25 years ago the league received a mere $8.8 million from television networks for broadcasting rights. This year that sum will top the $2.25 billion mark, as Fox (NYSE:FOX), Viacom's (NYSE:VIA) CBS, and Disney (NYSE:DIS) help the NFL keep its owners and players happy and wealthy.
Obviously things will only continue to get better with DirecTV's new deal. So my nickel advice to NFL owners is to hurry up and offer extended contracts to your players. My nickel defense advice to NFL players is to ignore the owners and keep those deals short as there will be more and more money to be had in the coming years.
Last December it seemed as though satellite radio specialist Sirius (NASDAQ:SIRI) was overpaying the NFL to the tune of $220 million over the next seven years for the right to air the league's gridiron duels. The NFL revenue streams are pouring thick, and that is likely to continue.
The new deal has DirecTV also receiving the rights to broadcast contests throughout the playoffs -- including the Super Bowl. That may diminish the value to network bidders for the games, since sponsors may be reluctant to bid up those coveted commercial spots to an incomplete, divided audience.
CBS and Fox also extended their pacts with the league, paying 25% more for the extra years. However, the league yielded more flexibility. The strategy of providing more non-Sunday broadcasts, and reserving the right to switch games late in the season so the more attractive match-ups receive prime-time coverage, should improve ratings late in the gridiron calendar.
Who loses? Well, the fans that actually pay for the stadium tickets to attend the games will come up short. The NFL has been cruel to its most ardent supporters by forcing them to sit through the lull of television time-outs. Now they also face the possibility of late-season tweaks throwing a wrench into their tailgating plans.
Then again, with the money that the satellite and network broadcasters are throwing around these days, they can practically afford to play in empty stadiums. The NFL is now a game for the armchair quarterback. Let's hope the league doesn't fumble its priorities in the process.
How is your favorite football team doing at the midway point of the season? Are you playing fantasy football this season? Will the New England Patriots repeat, or is the amazing resurgence of the Pittsburgh Steelers or the T.O.-powered offensive renaissance in Philadelphia the better call? All this and more in the 77's House of Foolish Pigskin discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz realizes that his home team Miami Dolphins have won just one game this year. He still supports them in a half-empty stadium. He owns shares in Disney but in no other company mentioned in this story.
