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Out Foxed
Steve Wulf
December 27, 1993
Rupert Murdoch's upstart network snatched the NFL from CBS in a coup that will change the face of televised sports
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December 27, 1993

Out Foxed

Rupert Murdoch's upstart network snatched the NFL from CBS in a coup that will change the face of televised sports

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Last Thursday, CBS was told how much the NFL (which had already agreed on a new Monday-night package with ABC and a Sunday-night cooperative with ESPN and TNT) wanted for the NFC. In order to keep the NFC. CBS did not have to match the Fox offer, but it would have had to offer far more than the $265 million it was already paying. "There is no question," says Murdoch, "that if CBS had been $20 million lower than us, the NFL would have taken CBS." The league gave CBS 72 hours to make an offer. But on Friday, the network told the NFL that it would pass. Murdoch, who was on his way to New York's Kennedy Airport, got the news over his car phone.

At that point the AFC, often derided by CBS personnel, still appeared to be a loose ball. In fact, a negotiating team from the NFL had already reached a tentative agreement with NBC, although the decision would not be official until the TV committee's conference call on Monday. That two-day delay led CBS to believe that it had one final opportunity to make a bid. Suddenly the boys at Black Rock, CBS headquarters in midtown Manhattan, wanted it. Hell, they needed it. But late Monday afternoon the NFL rejected CBS's bid, even though it exceeded NBC's by $30 million a year. "At no time before last Friday did CBS say they were interested in the AFC package," explains NFL vice-president Joe Browne. "After saying no to the AFC for weeks, they became interested after losing the NFC to Fox. By then, frankly, the interest was too late. Their offer was too late."

Dick Ebersol, the president of NBC Sports, says that Murdoch established the price for each conference, and it was left to NBC and CBS to rise to the challenge. But only one did. "It became clear to me," says Ebersol, "that whichever network acted first and came north of 210 million for the AFC, or 300 for the NFC, would get football. CBS never responded until it was over. In Murdoch we have someone with a different rationale for being in sports television. This marks the end of the three-network dance for rights to major sports."

It will take a while for the dust to clear and for Madden to put a new logo on his bus, but it's fairly easy to sort out the winners and the losers in this new world.

The Winners:

Fox. Some people think Murdoch was crazy to spend that kind of money on the NFC. Crazy like a fox. The deal not only puts Fox in the same league as the Big Three but is also a preemptive strike against the fifth and sixth networks planned by Time Warner (which publishes SPORTS ILLUSTRATED) and Paramount Communications. Says Kevin O'Malley, senior vice-president for programming at TNT, "That's what prompted the Fox deal: to foreclose on the competition. It's worth $400 million a year to Murdoch to preempt Time Warner and Paramount."

The NFL will also increase the value of each of the 139 stations that carry Fox. And Murdoch hopes that Sunday-afternoon football will do for Fox's Sunday-night ratings what it did for CBS's post-NFL lineup. "If our 7-to-11-p.m. ratings are a couple of points higher," he says, "that's worth a lot of money to us."

The NFL. At the outset of negotiations, both CBS and NBC made it clear that they had lost money on the previous contracts and did not intend to do so this time around. But that was before the hungry Fox entered the picture. The Fox deal also addresses a concern of newer owners such as Jones and Denver's Pat Bowlen, namely that the league has become too staid. Fox's younger audience appeals to them, and so does the global reach of Murdoch's empire.

The Richer Teams. Under the league's new collective bargaining agreement with the players, a salary cap will begin next year that will be based on 66% of each club's designated revenues. Until the Fox deal came along, teams like the Buffalo Bills and the San Francisco 49ers were fretting that they would not be able to keep their squads intact with only $30 million available for salaries. But the Fox-NBC windfall will raise that amount to nearly $34 million. Says 49er general manager Carmen Policy, "Now there's a light at the end of the tunnel for us."

The Flayers. The higher cap will mean bigger salaries for stars and more job security for marginal veterans.

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