If TV pot gets sweetened, NBC may fold Network seeks relief in NFL deal

PALM DESERT, CALIF. — PALM DESERT, Calif. -- The stage has been set for the biggest high-stakes television poker game in the history of the NFL.

The NFL's negotiations for its next TV contract will start later this year against the backdrop of network complaints that they're losing money on the four-year, $3.6 billion contract negotiated in 1990.


They say the downturn in the economy has prevented them from charging enough for commercials to offset the rights fees.

The networks even negotiated a deal for a two-year extension of the contract at the current average -- $32.5 million per team -- in 1994 and 1995 in exchange for a $224 million rebate this fall, when the contract will jump to about $40 million per team.


The problem is that the proposal needed 21 owners' votes to pass, but only 18 supported the measure, and it was rejected. The owners did agree to a $28 million rebate in return for not going to an 18-week schedule last year. The networks said they would have had trouble selling another week of games.

The result is that the networks are looking for a big cut in rights fees in the new contract.

NBC is so unhappy that there has been speculation the network will walk away from its AFC contract.

"We're not a charity," Dick Ebersol, the president of NBC Sports, said earlier this year.

NBC Sports spokesman Ed Markey said yesterday that the network's position hasn't changed.

"The current contract is not financially profitable for us, and the NFL knows it," Markey said.

The NFL either doesn't know or won't admit it.

At the league meetings this week, commissioner Paul Tagliabue pointed out that NBC is paying $752 million over the four years of the contract and CBS is paying more than $1 billion. (CBS, ABC and the league's two cable carriers, TNT and ESPN, have expressed far fewer complaints about their deals.)


"In fact, many people in the TV industry think the AFC deal is better because it's more cost effective, but Dick Ebersol will never admit that," Tagliabue said. "The networks made money, and some of them made big money and strong profits in the earlier years."

There's probably a little posturing on both sides as they prepare for the negotiations, but Tagliabue insists the NFL won't get less than the $32.5 million average of the last contract.

"My best judgment at this point is that it's going to be above the average of the last four years," he said. "I don't think we've got a major problem in terms of television in the strength of our product. I think some other sports do, but not us."

Meanwhile, he prepared for the negotiations at this week's meeting by adding two members to the TV committee -- Jerry Jones, owner of the Dallas Cowboys, and Roger Headrick, chief executive officer of the Minnesota Vikings.

The other four owners on the committee are Art Modell of the Cleveland Browns, Leon Hess of the New York Jets, Pat Bowlen of the Denver Broncos and Tom Benson of the New Orleans Saints.

Jones' addition was significant, because he was a leader of the 10-owner bloc that stopped the contract extension last year.


Naturally, Jones brushed off the networks' complaints.

"I think that's part of the negotiations," Jones said. "We've all negotiated enough to understand that. I'm upbeat because the projections for the economy are much better than they've been at any time in the last couple of years."

Modell, who's been negotiating TV contracts for three decades, seems more sympathetic to the networks and concedes they're losing money.

"I'm committed [to the idea] that the networks should make a profit with the NFL," Modell said. "We've got some ideas."

The players will watch the negotiations closely, because they now get a percentage of the gross. The more money the NFL gets, the more bidding there will be for free agents.