Analyst sees minimal risk for big nets if NFL goes bye-bye


There are a lot of good reasons for broadcast and cable networks to carry National League Football games, but a big profit margin is not one of them. Analysts at Fitch Ratings believe that the networks would weather a work stoppage just fine.

The big networks that carry NFL games are Fox (News Corp.), CBS, ESPN (Walt Disney) and NBC.

Fitch believes that there is ample motivation for the owners to get a deal done in the now likely event that they lose access to their $4B network-provided slush fund that would help them get through a season without a schedule.

The network money would not be lost money – the NFL would have to repay it with interest. The nets would have lower revenue during a lost season, but also face lower expenses and would not have to contend with collecting unpaid advertising accounts.

Fitch says that the fees to carry the games are so high that the loss of profit will be minimal.

Summarizing the situation, Fitch said, “While Fitch does not believe an NFL work stoppage will result in a material direct financial impact, it would encumber the broadcasters’ ability to use the large audiences for NFL games as a promotional tool. As a result, ratings for other network program could be pressured. This would be a modest negative for the broadcasters, particularly in the event of a prolonged lockout, although it is not currently expected to have a negative ratings impact. Nonetheless, Fitch will continue to monitor this going forward.”

RBR-TVBR observation: While the networks might be OK, we suspect loss of an NFL season would be another thing entirely at the local level, where many stations rely on football frenzy for related programming and advertising clients. We remain hopeful that the owners and players will work out their differences peacefully.