The NFL, The Live Sports Bubble And The Networks

The other day, Kevin Draper of Deadspin wrote a column wondering if the live sports bubble is about to burst.

Draper notes that less popular sports haven’t been able to find buyers for their broadcasting rights, and while it’s easy to say that all deals with the fact the sports aren’t popular, there’s some truth to what Draper is saying. More importantly, Draper indicates the impact is more likely to impact the networks, rather than major sports organizations such as the NFL.

Draper isn’t the only one with this observation. Jessie Karangu at Awful Announcing observes that the so-called “skinny bundles” could put the typical cable bundles in jeopardy and that mainstream sports networks are becoming more conservative about what sports packages they will pay for broadcast rights.

Both columns note that the rise of digital media is giving more people options to watch televised programs. It’s led to some people choosing to “cut the cord,” or dump cable or satellite television in exchange for broadband Internet and subscribe to various distributors who offer a wide selection of programs people can watch at their leisure.

So how does this relate to the NFL?

I can tell you I gave thought a few weeks ago to whether or not I should join the cord-cutting movement and consider other options. The one thing that has given me pause is figuring how I could still catch up on Denver Broncos games or other NFL games I might want to watch. But the more I thought about it, the more I saw some alternatives were possible.

First of all, because I live in Kansas, I am not guaranteed to see the Bronco games each week. Second, even if they were on every week, there are TV antennas one can purchased for a reasonable price that you can hook up to a digital TV and still receive signals if you aren’t too far from the reach of a broadcast signal (and because I live just 35 miles from Wichita, I’m within range of the stations there). Third, the NFL offers NFL Game Pass, which allows one to pay $100 to watch any NFL game after it has aired – and while that means watching live isn’t possible, it allows you to catch up on a game if you missed it or wasn’t aired in your area.

Some might wonder why the NFL doesn’t just allow people to pay a fee to watch any game a person wants to watch online. The easy answer: Because CBS, Fox, NBC and ESPN have each paid a considerable sum for the rights to air certain games. DirecTV has also shared out a considerable sum for NFL Sunday Ticket, and even though it requires people to pay a subscription fee for the service, one could imagine the company wouldn’t be happy with the NFL providing an alternative that would allow a current DirecTV subscriber to stop satellite TV service. (Note: DirecTV does provide a version of Sunday NFL Ticket available online but it’s limited to people who would not otherwise be able to get satellite TV.)

I am aware of other options, but most of them have certain restrictions, too. Still, there are reasonable avenues available to legally watch NFL programming without needing to subscribe to a cable or satellite provider.

That brings me to this: As these avenues outside of traditional deliveries become more popular, what happens to everyone who is part of the current model? Focusing specifically on the NFL, here’s what I imagine could happen.

First concerns the NFL. While I don’t think the NFL would get the sizable amounts of money it receives from those who currently deliver its content, it could compensate for that by offering new methods to deliver content to fans. The NFL, for example, will allow Twitter to stream its Thursday night games. Twitter paid about $10M for the entire package, considerably less than the $45M per game CBS and NBC pay to broadcast Thursday games. If the NFL sees enough reason to expand game offerings to Twitter or another online content provider, it remains to be seen how much they would get for it.

There is, of course, the possibility that the NFL could offer people the option of watching live games at its own site, whether they require people to pay a fee or allow them to be broadcast for free as long as people put up with ad breaks, as they do on the TV networks. But would the NFL really want to dive headfirst into that avenue without knowing how well it would work? And does the NFL want to risk making all games available that way when others are paying for rights to provide games to viewers?

Regardless of which way things go, I tend to believe that, while the NFL will feel some impact, it won’t feel the greatest impact and should find ways to adapt as long as the sport remains popular with viewers. The NFL might have to adjust to lower revenues, but it would likely find a way to keep going.

That brings us to the next player in this game: The cable and satellite providers. On one hand, you would think those providers would be hit hard if more people keep cutting the cord and televised programs such as NFL games became available more often through online providers.

On the other hand, most of these cable and satellite providers are in the Internet business. A few of them are already offering “small bundles,” as the Awful Announcing articles notes. DISH Network launched the Sling TV service, which offers a smaller bundles of channels over the Internet, and gained more subscribers to that to make up for the loss of general satellite TV subscribers.

As the AA articles notes, a cable or satellite company doesn’t care how big streaming video becomes as long as customers are watching streaming video through a service that company provides. Thus, if the NFL focuses more on online delivery of games, companies such as DISH, Comcast, AT&T (which currently owns DirecTV) and others will adapt and focus more on Internet services as their means of keeping customers.

That leaves the third player, the networks. And they are the ones that could be affected the most unless they are willing to think outside the box in terms of how they deliver content.

Currently, NBC streams the games it broadcasts online at It does put NBC in a good position to ensure it can gets its share of viewers. CBS plans to expand the number of Thursday games it streams online, so one would imagine CBS would want to get all games it has broadcast rights to streamed online.

The ones to keep an eye on are Fox and ESPN. Again, Fox’s means of streaming games are restrictive and would need to be adjusted to ensure it would keep viewers who find online delivery a more attractive option. I suspect some of that hinges on what the NFL will allow Fox to do, but if CBS is allowed to stream more games online, it’s hard to see Fox not being allowed to do the same, and thus Fox would pull back its restrictions.

ESPN could face the biggest changes, though. It does offer a Watch ESPN app, but you are required to subscribe to a cable or satellite provider. It’s not hard to see that restricting how one can watch its content without subscribing to cable or satellite TV could turn off more people who indicate preference to watching content online without being forced to pay for a cable or satellite TV provider. On top of that, while the first three networks got rolling through so-called “free TV” avenues, ESPN has been dependent on the cable or satellite provider route since its inception. That means ESPN has relied a lot on its share of revenues from cable and satellite subscribers and why its parent company is resistant toward the option of proposals to allow viewers to select which channels they want to pay for, because that would change a major part of its business model. While the other three networks who broadcast NFL games might feel a little impact from that, they haven’t based their business as much on cable and satellite subscribers.

It’s clear, though, that if any of the current networks are going to stay in the game of providing content online, they’ll have to be careful not to overpay for broadcast rights and be sure they have cost-effective measures in place to broadcast them online. They will likely have to continue airing ads during games, as they do with TV broadcasts. And they must also be mindful of the possibility that the NFL and other sports organizations could opt to deliver live content directly to viewers (whether through charging people or just dealing directly with advertisers to air spots during games) and make the networks and their companies a less attractive option for delivering content, even if those companies adjust how they deliver televised content.

And I do wonder how much longer ESPN eventually will be able to keep paying a large amount of money for broadcast rights to Monday Night Football. Given that ESPN is losing subscribers thanks to cord cutters and has had to reduce staff over the past few years (both are noted in the Deadspin and AA articles), you have to wonder how much it can really commit to the NFL, especially if the NFL finds online streaming to be a more viable option of delivering content.

I will admit I don’t know all the specifics of what each network’s company is doing with its online business models. But while I expect the NFL to find a way to adapt, and that cable and satellite providers will do the same, it would not surprise me if at least one network is dealt a heavy blow if online streaming becomes a more popular means of accessing content.

It’s going to be interesting times ahead for the NFL and other sports organizations in terms of how content is delivered. But while I wouldn’t expect a league to fold over these changes, those who deliver that content could find themselves in tough situations if they refuse to adapt their business models.

Published by

Bob Morris

I'm a sports writer in real life, though I've always focused on smaller communities, but that hasn't stopped me from learning more about some of the ins and outs of the NFL. You can follow me on Twitter @BobMorrisSports if you can put up with updates on the high school sports teams I cover.