Losses from NFL worry networks


NEW YORK -- For the three broadcast networks, the NFL is the spigot that provides the most consistent, reliable flow of viewers in television.

And yet, some network executives now say they are thinking about shutting off the tap. The reason, they say: They can't go on getting soaked.

The three networks, citing losses that have collectively exceeded $200 million during the first two years of their deals with the NFL, have quietly sought some concessions to head off even greater losses in the two years remaining on the contract.

League executives have not given any firm indication of what position they will take on either renegotiating the current contract or perhaps extending it, but all sides agree that the league is sensitive to the networks' position. Val Pinchbeck, the NFL's vice president of broadcasting and productions, said the league had had "some dialogue" with the networks about the losses.

The NFL concluded another highly successful season yesterday with Super Bowl XXVI. The ratings for the regular-season games were down only slightly from the preceding season for CBS, NBC and ABC. Once the season moved into the playoffs, the ratings soared.

That performance was remarkable, given the steady declines in the ratings for other network programming and the fact that the NFL, in this contract, actually diluted the value of the network game packages by adding a new weekly game on two cable channels, ESPN and TNT.

"As programming, the NFL is still an island of stability in a sea of confusion," said Howard Stringer, the president of the CBS Broadcast Group. "It's a perfect marriage of network television and programming. It's incredibly valuable. But these are very tough times."

Indeed, the NFL games have turned into a money loser for the networks through a deadly combination of enormously increased rights fees and a steep downturn in television advertising. The football rights fees soared, several network executives have said, as a direct consequence of the huge rights fee that Major League Baseball extracted from CBS. The NFL, knowing its value as the most popular television sport, would not accept a penny less from CBS than the network paid for baseball. That set an inflated standard for all three networks.

Last year, CBS wrote off sports losses of $322 million, attributed to both baseball and football. Baseball has been thought to be responsible for the bulk of that loss.

CBS did not officially break out how much of the write-off was attributable to the NFL contract, for which the network paid the same $1.06 billion that it paid for baseball But analysts have estimated that the CBS football losses exceeded $100 million.

ABC, meanwhile, paid more than $900 million to the NFL for the highly rated "Monday Night Football" and has so far lost an estimated $50 million.

ABC is reticent about the football situation, but one ABC executive said it did hope to get some modifications in the last two years of the deal.

NBC, which has lost about $50 million on the first two years of its $752 million NFL deal, has had the most pointed reaction. Dick Ebersol, the president of NBC Sports, said NBC would decline to renew its contract with the NFL unless it was convinced the deal was "risk free."

Ebersol acknowledged the unparalleled value of the NFL games. But he said: "We'll still walk away, knowing it's the finest product there is. That doesn't lessen the fact that it's a losing ball game."

What the networks clearly want is some changes in the contract to prevent the losses from ballooning in its final two years.

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