RCS Sidelines

April 10, 2009 12:30 AM

NFL Network Still Losing the Battle

The NFL Network has been a complete bust. I’m not talking about from a programming side, but from a business standpoint.

They launched in 2003 and are only currently available to 35 million viewers. Compare that to the MLB Network that launched just over three months ago and already has a reach of 50 million viewers. And the gap may be widening – the NFL’s deal with Comcast is ending at the end of the month and they may lose an additional 2 million people who receive the channel on a digital sports tier.

The NFL Network and the cable operators have feuded since the network’s creation and their stubbornness continues. In The Philadelphia Inquirer, NFL Network’s CEO Steve Bornstein wrote an op-ed piece blasting Comcast for their unfair practices:

Comcast discriminates against networks such as ours because we are independent. Do you know why you get the Golf Channel and Versus as part of your basic cable service? It's because both are owned by Comcast, which makes the company's channels broadly available. Do you wonder why the recently launched MLB Network is, unlike its football counterpart, broadly available to fans without an extra monthly fee? Once again, the answer is that Comcast has an ownership interest in the MLB Network. NFL Network and others like it are not owned by the big cable companies. But instead of negotiating with independent programmers, the cable companies discriminate against them in favor of their own services.
Bornstein makes some valid points. Do you think people would rather have Versus or the NFL Network? Of course, what he doesn’t mention is the fact that the NFL Network is asking for fees much higher than Versus or the Golf Channel. Also, in following with Bornstein’s method of asking questions and answering them… Do you know why you can’t get the NFL Sunday Ticket unless you have DirecTV? It’s because the NFL sold it to DirecTV exclusively.

The cable companies can’t offer their subscriber the package and that has become one of DirecTV’s biggest draws. You think that makes the cable companies angry? Sure does.

How much longer is the NFL willing to dump millions into the NFL Network without seeing a return on their investment? The NFL has justified the network with the thinking that the network has helped raise the prices on their game packages sold to ESPN and NBC. The logic goes that by having their own outlet where they could put the games, it drives up prices because they could keep the package themselves to distribute. But have the games that they’ve had on the network been a success? They have a package of eight regular season games, but very few have had any significance. When they finally had a game of significance in 2007, the Patriots finale against the Giants in their quest to finish the season undefeated, they made a deal for the game to be broadcast on both NBC and CBS.

That package of eight games could only be justified if it caused the cable companies to come back to the bargaining table, but so far it hasn’t happened. Those eight games could fetch a premium if sold to the highest bidder, yet the NFL Network remains stubborn and thinks eventually the cable companies will give up. The problem is, it’s a simple case of who has more to lose? The cable companies are set and are making money hand over fist. They don’t need the NFL Network, but the NFL Network needs them. They need viewers and until they figure out how to work with the cable companies, it will continue to be a fringe channel that loses money year over year.

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