Analysts have stuck with their NFL pre-lockout analysis now that the lockout is in effect. Any revenue losses suffered by national football-carrying networks will be offset by nearly equivalent decreases in costs, resulting in little or no impact on profitability.
Marci Ryvicker of Wells Fargo Securities noted that developments were anything but unexpected, but that the good news is a player-friendly judge taking lead in the courtroom aspects of the dispute. Wells Fargo says the stoppage will likely be temporary with little long term impact. The biggest impact, in fact, will be in headline generation, not profit loss.
Moody’s believes that stadiums bear the risk of default if the stoppage goes beyond one lost season. It thinks the owners can weather a year off, and that networks carrying football certainly can, again since loss of revenue is offset by decreased costs.
Viewership will be lost as the affected networks will have to plug in replacement programming, and Moody’s suggests the ultimate effect will be loss of lead-in value for programming that usually follows televised football.
“Broadcast networks will lose hundreds of millions in revenues as they replace NFL games and programs that will most certainly attract fewer viewers,” says Neil Begley, a Moody’s Senior Vice President. “However, given that the significant cost that will be paid to the NFL games that will not be played will not be passed through the income statement, but represent a credit for future seasons, only the difference in the profit between what could have been earned from football compared with what replaces football will affect the networks directly.”
RBR-TVBR observation: Any Redskins fans out there? The biggest news from our team last season was getting yet another big name free agent, signing him to a lengthy contract extension, and then promptly benching him. Oh, and the owner made a national laughingstock of himself by suing a local alternative newspaper. A lost season for us means great news – lower blood pressure, less cursing, fewer handy knickknacks hurled in disgust, and hence a safer domestic environment for our pets.