Not Even Covid-19 Can Come Between the NFL and TV Money
(Bloomberg Opinion) -- I’m sure glad professional sports are back. It’s been a nice reprieve from the pandemic.
At the U.S. Open, the empty stands have given tennis an unusual intimacy, and the lack of some of the biggest stars like Roger Federer and Rafael Nadal, who opted out, and Novak Djokovic, who was bizarrely defaulted, has allowed fans to focus on the next generation of stars like Dominic Thiem and Daniil Medvedev. They have provided plenty of great shot-making.
The National Basketball Association playoffs have been equally thrilling, establishing Luka Doncic, the Dallas Mavericks’ 21-year-old star, as the league’s next marquee player, with Portland’s Damian Lillard right behind him. Meanwhile, the Lakers star LeBron James, at the ripe old age of 35, is trying to prove one more time that he still deserves the title King James.
Both sports have been played in bubbles — basketball in Walt Disney World in Orlando (along with professional soccer and women’s basketball), while the tennis players are essentially confined to their hotel rooms when they are not at the Billie Jean King National Tennis Center in Queens. There have been almost no outbreaks of coronavirus in any of the “bubble sports.”
But now comes the sport Americans love above all others — the National Football League — which begins tonight with the Kansas City Chiefs, led by the league’s brightest star, Patrick Mahomes, against the Houston Texans. Although the league has enacted plenty of Covid-19 protocols, including regular testing of the players, the games won’t be played in anything approaching a bubble.
Visiting teams will fly to the home teams’ cities, stay in hotels, eat meals together and, one hopes, stay away from post-game clubbing. During the off-season, more than 100 players tested positive, but that number has since dropped drastically. In the most recent round of testing, only one player tested positive. Still, in anticipation of more positive tests during the season, the NFL has created a special category on its injured list called “Covid-19 reserve list.”
Meanwhile certain teams, including Kansas City and Dallas, will allow limited tailgating. Some teams will also allow fans in their arenas, selling tickets to six-person “pods,” which can cheer together — but socially distanced from all the other fans. For the game tonight, Kansas City is going to sell 22% of its seats in Arrowhead Stadium — that’s 17,000 fans in a stadium with a capacity of 76,500. Fans will be required to wear masks (except with eating or drinking); there will be plenty of hand sanitizer on hand; and so on.
Still compared with the sports being played in bubbles — or even baseball, which is being played in empty ballparks — the NFL is taking more coronavirus risk than any other professional sport. Just picture the offensive and defensive lines, face-to-face, panting, puffing and growling at each other during every play. Or think of the fans after a few drinks when their team scores a touchdown. Are they really going to stay in their pods? I know people who fear that football games could be super-spreader events. I think if the stadium officials enforce the protocols, that’s unlikely. But it is equally unlikely that neither players nor fans will be able to avoid Covid-19 entirely.
So why take the chance? You know the answer to that: money. More specifically, television money. For all the devoted fans in the stands on Sundays in the fall, the relationship that truly matters is the one between the league and the legacy television networks, which pay them $3.1 billion for Sunday games, while Fox throws in an additional $650 million a year for Thursday Night Football (though NBC will have tonight’s game), and ESPN pays $1.9 billion a year for the Monday Night Game.
In other words, without selling a single ticket, each of the league’s 32 teams is guaranteed $176 million just from the NFL’s television contracts. That is just $22 million under the current salary cap. Bring in 17,000 or so fans, sell them some beer and charge for parking, and the financial pain diminishes. Pull the plug on the season, on the other hand, and you’ve got a financial crisis on your hands, because the networks aren’t going to pay if there is no product to air.
On the flip side, if the league had canceled the season, it would have been a bigger disaster for the networks than for the NFL. According to Variety, “Live NFL broadcasts generate TV’s biggest consistent audiences and the medium’s highest ad prices. In 2019, the average cost of a 30-second ad on NBC’s ‘Sunday Night Football’ was $608,625, according to Standard Media Index, a tracker of ad spending. The equivalent on Fox’s ‘Thursday Night Football’ came to $496,232.” Twenty of the top 50 most-watched prime-time shows last year were football games, with the No. 1 Super Bowl attracting an audience of nearly 100 million. No TV drama can come close to those numbers.
More than any single thing, the NFL is keeping sports fans from cutting the cord. It is holding the cable bundle together. It is just about the only televised entertainment left that can promise advertisers a big audience that can’t click through the ads. According to Variety, Disney is considering moving Monday Night Football from its ESPN network to its ABC network to help shore up the latter. That’s how much football matters. Variety also reported that when its television contracts expire next year, the NFL is likely to seek increases of 50% to 80%. It’s just as likely that the league will get what it wants. That’s also how much football matters.
Will I be watching pro football games this fall? Of course I will. I want to see what Tom Brady will do in Tampa Bay, and whether Cam Newton can be an effective quarterback in New England. (I’m a New England guy.) But I’ll admit to being a little squeamish about it. Doctors who have consulted with NFL teams say that the protocols the league and the players’ association have agreed upon are about as good as they can get, and they are optimistic the season will be successful. I hope they’re right.
They say that in many instances, the pandemic has simply accelerated trends that were already emerging. So it is with football. The NFL and the legacy television networks have long been financial partners, but now they are even more than that: their financial interdependence is so complete it can be hard to know where one ends and the other begins. As for Covid-19, the NFL is assuming some risk to get back to some sense of normalcy. Maybe it will turn out to have acted too hastily, or maybe its judgment will turn out to be right and the games can be played with relative safety during a pandemic.
Money is going to make sure we find out.
College football is taking a lot of risks, too, but that’s a column for another day.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."
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