Return of NFL is mood enhancer for broadcasters


Another analyst has weighed in to report what most probably think is obvious – Moody’s says that the return of the NFL is great news for broadcasters. The reason that conclusion isn’t as obvious as it might be is that the actual rights holders enjoyed some financial protection in the event of a lost season – but that didn’t necessarily hold for others. Big winners are DirecTV and local broadcasters.

However, Moody’s thinks even the rights-holders stand to gain over last year. It believes that CBS, Fox, ESPN and NBC “…sold advertising surrounding NFL games with the presumption that games would not be canceled. Advertisers bid up rates and bought up inventory to higher levels than in the 2010 upfront sales market. Therefore, their operating performance should by moderately better than last year and contingency plans for programming will be filed for ten years when the new CBA expires.”

DirecTV needs subscribers to make any money off of its NFL Sunday Ticket offering, so the resumption of normal NFL operation leaves it with the biggest sighs of relief.

Likewise, the local affiliates of the NFL rights holders are breathing huge sighs of relief. Odd years (or as they are also known, off-election years) are always down for TV. But Moody’s notes, “As the games are no longer in jeopardy, non-political core revenues should be up slightly, thwarting the worst case scenario of no NFL games compounding the typical off-election year cycle. With NFL games back to business as usual, overall station revenues will be flat to moderately down in 2011 as expected, but are expected to rise swiftly as the presidential primaries and election, as well as other significant congressional, state and local races drive demand for advertising through 2012.”

Moody’s also believes the NFL improved its own position the next time it negotiates rights packages with networks. “The length of the deal removes uncertainty and also should prove beneficial in attracting higher rights revenues over the period, in our view,” stated Neil Begley, a Moody’s Senior Vice President.
Analysts from Wells Fargo and Barclays Capital weighed in earlier on the end of the NFL work stoppage.

RBR—TVBR observation: All local media benefit from the return of football. Many radio stations carry NFL games, and even more stations make NFL a key conversation piece before, throughout and after the season. Newspapers fill pages and sell subscriptions based on football. While the loss of the season may not have been that big of a problem at the top of the media food chain, it would have put much more strain on media outlets down the line. We are all glad the games are going to go on.