With ESPN’s “Monday Night Football” viewership still falling after the presidential election, I began to think about what it meant to be the network that pays, by far, the most for its NFL rights.
ESPN gets a less-impactful schedule than NBC’s “Sunday Night Football.”
ESPN never gets a Super Bowl and only began to carry a single annual playoff game in 2015.
ESPN lacks the flex rights of NBC, which can swap a suboptimal matchup for one that is more promising on CBS or Fox, as it did on Sunday. Instead of carrying its scheduled Jets-New England game, NBC took the Denver-Kansas City game from CBS.
For that lesser deal, ESPN pays the NFL $1.9 billion annually, nearly twice what any of its network rivals shell out. Yes, the contract includes the extremely valuable video and highlights rights that sustain the network’s numerous programs and platforms, as well as the draft and other goodies. But it hardly seems like a bargain.
“Our deal is so much more than ‘Monday Night Football,'” said Burke Magnus, an executive vice president of ESPN. “For us, it’s a year-round proposition.” Comparing ESPN’s and other networks’ NFL investments, he said, “is apples and oranges to the nth degree.”
He added: “I understand the comparison, but we don’t agonize over it.”
ESPN’s profitability has long enabled it to pay $1.9 billion a year. The league understood ESPN’s ability to pay a decade ago when ESPN succeeded ABC as the home of “Monday Night Football” and NBC took over on Sunday nights from ESPN. The NFL shrewdly, even cravenly, acknowledged that even as it sold NBC the premier prime-time package, it could still soak ESPN. More than any other network, ESPN needed NFL games to help sustain its monthly subscriber fees, the foundation of its financial structure.
So, in the contract that began in 2006, ESPN agreed to pay $1.1 billion annually, nearly twice NBC’s $600 million. When it came time to renew the deal through 2021, the price rose to $1.9 billion a year. NBC is paying $950 million.
No one has laid out the ESPN-NFL relationship better than the Denver Broncos owner, Pat Bowlen, who was the chairman of the league’s broadcasting committee when that deal was signed. He was blunt about why ESPN was paying so much more than other networks, and he did not dwell on the dual stream of subscriber and advertising revenues that the others lacked.
“We felt we deserved a larger share of that money because the NFL is a big part of their programming,” he said. “They wouldn’t be anything near what they are without us.”
Ten years later, “Monday Night Football” is not the powerhouse it once was — and you cannot really blame it on the announcer Jon Gruden confusing viewers with his play-calling arcana. Viewership is down 17 percent to 10.7 million, and the decline at ESPN has continued in the two games after Donald Trump was elected president.
By contrast, NBC’s audiences increased in each of the two weeks after the election, cutting the season’s decline to 14 percent. But on Sunday, the preliminary overnight rating for Kansas City’s 30-27 overtime win over Denver tumbled 27 percent from last year’s Week 12 game.
Perhaps it was premature to think that Election Day would magically lift the cloud over NFL ratings when so many other factors were also in play, such as the absence of a super team, the national anthem protests, concerns about concussions and domestic violence and the early-season suspension of New England quarterback Tom Brady. In addition, the legal problems of the daily fantasy companies FanDuel and Draft Kings have prevented those companies from focusing their customers’ attention on this season. The loss of millions of subscribers over the years to cord-cutters and internet services may also be hurting ESPN.
Oversaturation is another possible problem: Three windows of Sunday games, Monday and Thursday night games and a few early Sunday games from Europe may be more football than most people need. Pro Football Talk reported recently that the league was considering whether to reduce or eliminate Thursday games. Players and coaches have long disliked the short preparation time for those games, but the league enjoys the $450 million that CBS and NBC are paying for them this season and next.
There will, of course, be no reduction in Monday night games. So ESPN must endure a schedule that this season, for instance, features only one appearance each for Green Bay, Denver and Dallas, while NBC has three for the Packers and the Cowboys and four for the Broncos. NBC has yet another advantage: While teams can play on prime-time five times a season (four total on NBC and ESPN and one on Thursday night), three can play a sixth time — but all have to be shown by NBC.
“NBC’s advantages have been there since the deals were done,” Magnus said. “They’ve been a constant since the beginning.”
Perhaps Monday night’s Green Bay-Philadelphia game would bring positive news for ESPN. The Packers are usually a good national draw, but it was ESPN’s misfortune to carry a Packers game when they were 4-6, facing a 5-5 Eagles team.
“If you told me at the beginning of the year that Green Bay would be 4-6 when we carry them, I still would have said, ‘I’ll take another Packers game,'” Magnus said.