NFL Squanders hundreds of millions of dollars with NFL Network

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November 27th, 2008

Ok, It's possible that the Detroit Lions could pull off a dramatic upset.  Not freaking likely, but possible.  More likely, but still not likely that the Seattle Seahawks could upset the Dallas Cowboys.   More likely still is that the best game of the day will be the Arizona Cardinals taking on the Philadelphia Eagles, and almost nobody -- except those in Arizona and Philadelphia, where the game will air for free on one of the local channels -- will get to see it.

I love football, and I love NFL football most of all.  But the entity that is the National Football League has a lot of hubris.   When the economy was very good, I understood the hubris a little bit more.  When you're making a gazillion dollars no matter what you do, squandering a few hundred million while you try to build something like the NFL Network could actually make some sense.

But in a bad economy?  In a bad economy squandering hundreds of millions of dollars is a little harder to take. The NFL cries like a little girl who dropped her ice cream cone when it comes to cable companies and the NFL network.   I love a lot of services that Comcast provides, but I don't necessarily love the entity that is Comcast.   But I'm on the side of Comcast and other cable companies when it comes to the NFL Network.

The NFL comes to Comcast and other cable companies and says, "look, we want to be on your basic cable lineup, but we want to charge you a fee for EVERY ONE OF YOUR SUBSCRIBERS in the same way ESPN does!"

Quite naturally, Comcast says, "Uhhhh...no.   The only thing our customers are going to watch in large numbers are the football games you air.  You wind up airing like 8 games a year and you want fees from all of our subscribers every month?  NO. F-NO!  That's dumb and we're not going to pass those charges on to our subscribers every month when even the ones who will watch will only watch EIGHT TIMES A YEAR over a two month period.  NO!"

And so the NFL Network is banished to the digital tier.  It's available for everyone with digital cable, but it costs extra.  Since we're mostly cheap, that means almost nobody gets it.  There are some markets where the NFL Network itself is on the basic cable lineup,  but without the games.  In other words, all the content that nobody watches is available at no extra cost, but you have to pay extra for the content you really want to see:  the GAMES.

The NFL has this dream that someday it will charge everyone for every game.  But in this economy that dream is pure vapor.  It wasn't likely going to happen for years and years, if ever, anyway, and it certainly won't happen in the current environment.  The best way for the NFL to make money is the same way it always has:  get HUGE BUCKS from the TV Networks.

The NFL probably has too much hubris, even now, to fold up shop with the NFL Network and package the games it kept for itself up back to the TV Networks.  The CW in particular might be very interested in spending a lot of money for the rights to those games, but ABC, NBC, FOX and CBS (which owns 50% of the CW) would likely be willing to pay too.  Particularly FOX which doesn't have much in the way of a Thursday night lineup (for ABC, CBS and NBC, Thursdays are one of the biggest, if not the biggest night).

I understand greed and hubris as much as the next guy.  Sometimes it pays off.  But this isn't one of those times.  The good old fashioned greed of extorting the television networks, who will in turn extort the advertisers, who will gladly be extorted since they cherish the demographics of people who watch NFL games, seems to be the way to go.

On Thanksgiving night, as many as 20 million might have watched the Eagles/Cardinals game.  As it is, outside of the local Philadelphia and Phoenix markets where the game will air freely, it's quite possible that less than two million people will see the game.  Last Thursday's Bengals/Steelers game, even with the free local market viewing drew only 3.226 million viewers.  Meanwhile, a below average game in terms of viewers still drew over 15 million viewers on NBC last Sunday night (Colts/Chargers).

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