NFL closing in on deal with Comcast
The NFL and Comcast are close to a deal regarding NFL Network
The future of the NFL Network may depend on the agreement with Comcast
The NFL is also close to contract extensions with FOX and CBS
The NFL is about to solve one very, very large television headache, and get some momentum it hopes to carry over into negotiations for a new labor contract with the players.
That isn't the only bit of good TV news on the horizon for the NFL. The league is also on the verge of reaching agreements with its two Sunday afternoon network partners, FOX and CBS, on contract extensions. The deals with FOX, CBS and NBC run through the end of the 2011 season, and it's likely the networks will have two years added to their deals.
Added to the deal the NFL made with DirectTV in March -- a four-year extension of the current satellite deal for Sunday games, worth $1 billion a year from 2011 through 2014 -- the league is riding a strong wave of TV profitability in bad economic times.
Rights fees with CBS and FOX, in addition to the specifics of the deal, were not immediately available. But it's likely the league will get small bumps up from the $622 million it earns from CBS annually, and the $712 million FOX is paying.
Notably absent from the network news: Progress on a new deal with NBC, which wasn't a part of the talks with the NFL. Part of the league's motivation to deal with Comcast and the networks, surely, was its desire to be able to use the Red Zone Channel on cable instead of only on satellite, and NBC wasn't part of the Red Zone deal. (The Red Zone channel is a whiparound channel following teams' scoring chances over the six-hour Sunday period when FOX and CBS have rights. The NFL wanted to make the channel available to cable systems, but could do so only if the two networks agreed to allow it be used on digital cable. When deals got made with FOX and CBS, as Sports Business Journal reported Sunday afternoon, it allowed the NFL to move close to a deal with Comcast, because the league could give the cable giant a valuable chip in the Red Zone Channel to use on Sundays.) NBC has historically been more of a bottom-line entity than other networks. But it's likely NBC, which currently pays $600 million a year for a premier Sunday night package of games, will agree to a similar two-year extension through 2013 sometime this year.
NFL Network had been carried on a pay sports tier for Comcast's 24-million subscribers, and the NFL for years has been arguing its channel should be on the regular digital cable package with the ESPNs and CNNs of the cable TV world. Now that is close to happening. The deal would mean that instead of paying about $7 per month for the channel and other pay-TV sports channels, Comcast subscribers will get NFL Network with its regular digital package -- and it will increase the number of TV homes the Network is seen in from about 35 million to close to 50 million. More importantly, it could well pave the way for the NFL to make deals with other cable companies similarly chapped at the league's demand for huge rights fees for a sports channel with only 24 hours of NFL regular-season game programming per year.
How big is this? Well, some of my acquaintances who work for the Network feared that without wider distribution, some owners tired of the five-year fight for wider distribution of the Network would have soon moved to kill the channel in the current bad economy. Comcast and the NFL had been like Pete Rozelle and Al Davis, seemingly destined to never make peace, and some employees felt the channel would never get major traction as long as league insisted that NFL Network charge cable companies more to carry its product than CNN charged for its channel.
I'm told the key player in the deal from the NFL side has been commissioner Roger Goodell, who has worked personally with Comcast chairman and CEO Brian Roberts to bridge the major differences between the two sides. Comcast, and the rest of Big Cable, has found it ridiculous (as did most sane people) that the league wanted 70 to 80 cents per viewer household for a network that televised only eight live NFL games. "Roger," one league source told me Sunday, "has made it a personal project to build a great relationship with Brian Roberts. The logjam's been broken, and I think that really helped."
Last month, an administrative law judge began hearing the dispute between the two sides, with the NFL seeking to have the channel moved from the pay tier to the digital tier. Roberts told the judge Comcast would accept the league charging a fee of 25 cents per subscriber per month. The league argued its value was much higher.
I'm also told a deal between Comcast the league was close to being done on Thursday or Friday, but it never got done. The two sides were back talking Sunday, working on some final points. These two sides have been engaged in substantive talks that have broken off many times, so it's dangerous to say categorically that a deal will get done. But I think one is very close.
As for what this means to my parent company, Time Warner, I can't tell you. I can guess. Time Warner Cable has 14.7 million cable homes, and the relationship between the league and Time Warner has been as noxious as the one between Comcast and the NFL. It could be that the league is intent on getting the deal done with Comcast first, then moving on to the second-biggest of the Big Cables, Time Warner, with the framework of a concept in place.
The deal with DirecTV, and the imminent ones with Comcast, CBS and FOX, bode well for the start of talks between the league and players this spring on a new collective bargaining agreement. NFL Players Association executive director DeMaurice Smith is expected to begin serious talks with league officials this spring.
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