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CBS, ABC win NFL rights
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January 13, 1998: 8:31 p.m. ET
In a stunning upset, NBC loses rights to NFL games; Fox contract renewed
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NEW YORK (CNNfn) - In a major defeat for top-rated network NBC, the National Football League Tuesday signed lucrative broadcast rights with CBS and ABC, leaving NBC without football for the first time in 33 years.
According to sources familiar with the deal, ABC's parent company, Walt Disney Co. bid $9.2 billion for both the Monday Night Football games and the entire slate of NFL Sunday night games. The Sunday night games will be broadcast by Disney's all-sports network ESPN.
Previously, the Sunday night games were split between ESPN and Time Warner Inc.'s TNT network. The move leaves NBC and TNT network out of the National Football League for at least five years.
Along with contracts already signed by CBS and News Corp.'s Fox network, the NFL will receive $17.6 billion over the next eight years, doubling its annual take from its previous broadcast deal.
Earlier, CBS, which lost NFL broadcast rights following the 1993 season, said it would pay $4 billion over the next eight years for the NFL's American Football Conference games and two Super Bowls. The price tag is more than double what NBC is paying for the 1997 season.
Mel Karmazin, chairman and chief executive officer of the CBS Station Group, said the network has learned from experience the value of having the NFL. (293K WAV) or (293K AIFF)
He said the network was not as concerned about making money on the deal as it was about putting pro football back on the network. (190K WAV) or (190K AIFF)
Industry observers said the interception represented a boon for the rebounding CBS, which already has surpassed long-time leader ABC in the prime-time ratings game.
"It certainly gets them back as a major player in sports, gets them back in stronger relationships with their affiliates and advertisers, gets them back a lot of what they lost four years ago from an image standpoint," said Robert Gutskowski, president and chief executive of Marquee Group, a sports management firm.
ABC will pay $550 million a year, a 139 percent increase from the previous deal. ESPN will pay $600 million, 135 percent more than ESPN and TNT paid, industry sources said.
For ABC, the risks of losing Monday Night Football would have been huge. Ratings at the Disney-owned network have been in a severe slump and "Monday Night Football" is the highest-rated program in ABC's prime-time schedule.
If NBC had won the bidding war, the No. 1 network in prime time would have locked up another night of dominance at a crucial time for the network. NBC's Thursday night schedule for next fall is unsettled, with "Seinfeld" ending production and the contract for "ER" expiring at the end of this season.
"Even though the Monday night ratings are off a little bit, it is still one of the top ranked programs in prime time every year," said Ron Frederick, a media buyer at J. Walter Thompson advertising agency. "It is three hours of guaranteed quality programming."
General Electric-owned NBC -- which had a $868 million, four-year contract -- has held the AFC broadcast rights since 1970 when the American and National leagues merged and has been broadcasting professional football games for 33 consecutive years.
Meanwhile, Fox has renewed its NFC package for $2.75 billion over the next five years, with the NFL holding the option for three more years.
Despite the soaring fees, advertisers regard sporting events as one of the premier locations for reaching young male viewers.
More than one quarter -- $3.7 billion -- of the $14.5 billion in ad sales generated by the four major networks in 1996 was generated by sports events, said Brian Schecter, an analyst with Paul Kagan & Associates Media Sports Business. Of that total, 40 percent came from the NFL.
"There is too much focus put on ratings, because they are so easy to look at," Schecter said. "But ratings comparisons miss the point because the landscape has changed so much. You need to look at ad revenues, how many affiliates sign up and other benefits networks get from football."
Indeed, NBC, which has broadcast rights to the upcoming Super Bowl game, had little trouble finding sponsors willing to ante up a record $1.3 million for a 30-second spot.
NBC is a unit of General Electric. ABC and ESPN are owned by Disney. Fox is a unit of News Corp. and Turner is a wholly owned subsidiary of Time Warner -- the parent of CNNfn.
-- from staff and wire reports
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