The Fix Is In, page 17
The influence of television is so powerful it has caused each of the major sports leagues to actually alter the play on the field to make their games more TV-friendly. Every sport has built-in TV timeouts so more commercials can be aired for the folks at home while boring the poor saps in the stands. NFL referees consult with the TV network representatives prior to kickoff to work out the signals and timing for such breaks in the action. Football’s two-minute warning was strictly a TV invention, meant to halt play at a critical juncture in the game so that when the spectator at home was at his most heightened emotional and physical state, he could be hit with an advertisement. Rules have been changed and altered, such as the adding of the three-point basket in the NBA, in hopes of making the game more exciting to the fans at home. Instant replay rules, available in all leagues today, wouldn’t exist if they weren’t so widely used in the televised coverage of their games. The outcry from fans over “bad” calls that seemed obvious on instant replays led the leagues to resort to delays in action to check replays to ensure the calls on the field were made correctly. Playing fields have been made brighter and more photogenic (and covered with more advertisements) for television. Jerseys had TV numbers added to the sleeves to make players more identifiable to broadcasters. Schedules have been changed to fit television ideals, with the adding of Monday Night Football and later Sunday Night Football, and “flex” scheduling that allows both the NFL and NBC to change any Sunday day game into a prime-time night game at their very whim, being the most obvious. Even the scheduling of playoff games is built around what works best for the television networks and their viewers.
Roone Arledge, former president of ABC Sports and the mastermind behind Monday Night Football once said, “Most of what TV does wrong is done to generate more dollars for [team] owners. If we cram 18 commercials into a football game it’s because the owners and the leagues are so damned greedy in what they ask for in rights.”2 His comment begs two questions. The first is, only 18 commercials there, Roone? Maybe that’s all there were in the 1970s, but not today.
A study was conducted in 2003 to see what exactly was broadcast during a typical NFL game. The game used was a CBS broadcast of a regular season contest between the Indianapolis Colts and Denver Broncos. The game featured 133 replays, 141 graphics, 107 shots of coaches, and 80 shots of fans. As for commercials, the couch potato watching at home had to endure 29 commercial breaks featuring 78 ads on top of 34 promos for other CBS broadcasts. During another examination of an NFL game, this time an ABC broadcast of a 2003 playoff game between the Tennessee Titans and Baltimore Ravens, there were 108 replays, 56 shots of coaches, and some 67 commercials as well as 29 promos for ABC’s other programs. For the ABC broadcast, which lasted approximately three hours, only 16 minutes and 48 seconds was actual game play with an average play lasting all of 6.9 seconds.3 This realization should’ve hit anyone owning a VCR or a digital video recorder some time ago. If you just watch the action and skip all the related junk that fills the spaces between it, you can take in just about any sporting event in much less than half the time period in which it was broadcast.
The second and more important question Arledge’s statement brings to mind is just how much money is involved in TV broadcast rights to sporting events? The frightening answer is literally billions of dollars every year.
Television didn’t have an impact on professional sports until after World War II. The first World Series broadcast nationally was in 1949. According to the book Baseball and Billions, author Andrew Zimbalist states that less than 12 percent of households in the United States had televisions at the time of NBC’s broadcast of the 1949 World Series. But by 1953, 15 of the 16 MLB teams in existence had local TV contracts while during that same year ABC introduced the national MLB “Game of the Week.” Just three years later, according to Zimbalist, approximately 17 percent of all money earned by MLB teams came directly from broadcast television rights.
It took time and some convincing on the part of baseball owners to package their television rights and sell them as a single unit. Mostly, MLB broadcast rights were sold independently and on a team-by-team basis with the Yankees being the first to do so in 1946. Football saw the folly in this. The NFL, too, had originally sold its television rights on a team-by-team basis since the 1940s, but by 1960 they recognized the entertainment value of their product and decided to market it as such. However, in order to sell its rights as a unit, the NFL needed help to avoid any antitrust issues. As a result of a little deal-making in congress, the NFL got its wish. Proposed by Congressman Emanuel Celler, the bill that allowed the NFL and the rest of the professional sports leagues to package and sell their broadcast rights while maintaining their antitrust status was signed into law by President Kennedy in 1961.
CBS promptly gobbled up the rights to NFL games in 1962. They paid the NFL approximately $9 million for the first two seasons. By the time its contract ran out in 1964, CBS had some competition. The resultant bidding war forced CBS to spend just over $28 million to renew its two-year deal with the NFL.
Meanwhile the NFL’s rival, the AFL, was floundering. Having made its debut in 1960, the AFL didn’t seem likely to be in operation in 1965. Luckily for them NBC, which had failed in its bid to steal the NFL away from CBS, was still in the market for professional football. NBC promptly forgot about the NFL and gave the AFL $42 million for the next five seasons’ worth of games. That money saved the AFL. Thanks to that much-needed cash injection, the AFL was able to lure better talent to its league and make itself a viable rival to the NFL. In fact, without that deal with NBC, the NFL today might be a much smaller league as the 10 AFL teams that joined the league in the 1970 merger probably would not have survived without NBC’s money.
The growing rivalry between the competing football leagues was both profitable and infuriating. Both made a good deal of cash from their respective TV deals, but they were treading on each other’s turf. The NFL had a longstanding rule that blacked out a team’s home games, whether a sellout or not, within a 75-mile radius of the stadium. If you wanted to see a Packers home game, either you bought a ticket or moved yourself 75 miles away from Lambeau Field. In fact, the NFL felt so strongly about keeping fans in the seats in those early days, no other games were broadcast into those blacked-out areas. NBC and the AFL didn’t impose such a restriction. They promptly began broadcasting their games nationally, even into areas the NFL had blacked out. Fans now had a choice. And the NFL didn’t like it. Soon they began broadcasting rival, non-home games into areas that would have previously been blacked out. Then the NFL began adding doubleheaders to their schedules, trying anything to maintain its popularity over the AFL. Amazingly, the NFL’s 75-mile blackout radius remained in effect until 1973 when congressmen in and around Washington, D.C. became fed up with not being able to watch Redskins home games. They forced the NFL’s hand into what is today a league standard in which home games are only blacked out if the game isn’t a sellout in the stadium within 72 hours of kickoff.
For these and other financial reasons, both leagues decided they had butted heads long enough. They struck a deal to merge into one unified league. Because of each league’s prior television commitments, the merger did not take place officially until 1970. That is why both CBS and NBC simultaneously broadcast the first Super Bowl in 1967.
Perhaps the biggest addition to the new NFL’s package was the advent of Monday Night Football (MNF). What seems like a tradition of sorts today was in fact a huge gamble when first aired in 1966 by CBS. The league feared oversaturation would cause fan apathy. As an experiment, the NFL and CBS aired four Monday night games between 1966 and 1969. Those first trial Monday night games earned great ratings. They paved the way for ABC’s official weekly Monday Night Football telecasts that began in 1970. What is most important about this is the fact that sports were not seen as “prime time” material in the early 1970s. Sports were a fine afternoon diversion, but were not judged capable of competing with true television programs. Monday Night Football changed that line of thought by making each game a spectacle, a type of must-see TV. With the consistently huge audiences MNF pulled in, spurred in part by gamblers wanting to recoup Sunday’s losses on Monday’s game, the networks began to realize the potential for prime-time sports programming that blurred the line between sports and entertainment. They grabbed that baton and have never looked back. By the time of its 1977 deal with the three NFL network partners, each of the 28 NFL teams was earning $6 million from broadcast rights alone, more than each team’s individual gate receipts from tickets sold.4
However, it wasn’t always sunshine and roses for the NFL and its friends in television. In the early and mid-1980s, the NFL saw its popularity take a hit. Ratings dropped. In 1985, the TV networks lost an estimated $50 million on their investment in the NFL.5 That was just the beginning.
In 1990, CBS was responsible for approximately 50 percent of all sports coverage available on TV including the Super Bowl, the NCAA Final Four tournament, Major League Baseball’s Division Championship Series and the World Series, and NASCAR’s Daytona 500. All of that didn’t amount to a hill of beans for the network. They continued to trail both NBC and ABC in the ratings war. Plus, the network lost somewhere between $55 and $100 million on its deal with MLB alone.6 That led CBS to practically beg MLB to restructure the $1 billion deal the two had just recently signed. The debacle led CBS Sports president Neal Pilson to ask, “How far can free TV go to support the major sports leagues?”7 Apparently, much further than anyone expected. The very next year, the NFL’s new broadcast rights contract cost the networks $3.6 billion. Factored into that was $260 million in losses.8 Meanwhile, the revenues from that same TV deal accounted for 64 percent of each NFL team’s annual income.9 The NFL wasn’t alone in reaping massive T V profits.
The NBA’s sweetheart deals with NBC brought in truckloads of cash the league desperately desired. It wasn’t long ago that the NBA was considered to be adjunct programming. In the 1970s, the NBA had a paltry $74 million contract for four years with CBS. CBS in turn focused primarily on the four big-market NBA teams it thought were worth broadcasting. It didn’t help raise the ratings as NBA games barely registered on the Nielsen charts. It was so bad the 1981-1982 NBA Finals were broadcast by CBS… when they felt like it. Game Six, the deciding game of the series between the Los Angeles Lakers and the Philadelphia 76ers wasn’t broadcast live. CBS refused to interrupt their normal broadcast schedule (which was showing a rerun of Dallas) for the game. Instead, it aired the game tape-delayed starting at nearly midnight on the East Coast. But once NBC got its mitts on the NBA, the two worked hand-in-hand massaging the league into a ratings powerhouse. It didn’t come cheap. By 1989, NBC was paying the NBA $600 million for four years. In 1993, they re-upped for another four-year deal tallying $750 million. Plus, the NBA received an additional $275 million for four years from the TNT cable network. Some NBA teams also supplemented their income by producing their own TV broadcasts, raising their collective incomes from an estimated combined total of $63 million a year in 1987-1988 to some $130 million by the 1992-1993 season.10
Baseball wasn’t doing too shabby for itself at this time, either. By 1990, approximately half of the money a MLB team earned came directly from broadcast rights. In 1996, MLB signed deals with FOX, NBC, and ESPN tallying a grand total of $1.7 billion for four years. Through that contract, MLB teams received about $28 million apiece, an amount equal to the average MLB team’s payroll at the time.11
Despite that early to mid-1980s hiccup in televised sports’ ratings, the numbers for sports on TV continued to rise throughout the 1990s and into the new millennium. With that came a ridiculous increase in revenue that each league raked in with each new TV contract. For example, here are the numbers the NBA took in with each successive television revenue deal: In 1994, NBC and TNT paid the NBA a combined $1.1 billion. Four years later, with their next contract in 1998, that amount doubled to $2.64 billion. When that deal expired in 2002, ESPN, ABC, and Time Warner stole NBC’s thunder, gobbling up the rights to televise the NBA’s games for an amazing $4.6 billion. The new contract signed between ABC/ESPN and the NBA in 2007 will bring $930 million a year to the NBA for the next eight years. This latest deal also includes the NBA’s digital media rights, the first sale of this sort for a professional sports league.
Amazingly, to the NFL, that $1 billion a year is chump change. They’ve been making that since their 1994 contract with the TV networks. In 1998, the new TV deal brought the NFL $17.6 billion, which equated to $2.2 billion a year for eight years. With that, the average NFL team earned $73 million alone in broadcast rights fees.12 The NFL’s salary cap—the maximum amount any team was allowed to spend on its roster—was $85.5 million in 2005. With the new TV contract for 2005, the NFL took in $11.5 billion from CBS, FOX, and DirecTV. Seems like less, but when you factor in another $1.1 billion a year alone from ESPN for Monday Night Football (which is bizarre since ABC was reportedly losing $150 million a year on MNF) and some $600 million a year more from NBC for Sunday Night Football (SNF), in reality, both CBS and FOX are paying 25 percent more for the NFL with this contract while DirecTV is paying a whopping 75 percent increase in its fee—mainly so DirecTV can maintain solitary control of its NFL “Sunday Ticket” package.13 In 2009, DirecTV again upped its ante to maintain control of that “Sunday Ticket” package, promising to pay the NFL $1 billion a year for its rights. CBS, too, re-upped with the NFL in 2009 to maintain control over AFC games through 2013 while obtaining broadcast rights to Super Bowl XLVII in the process. Terms of the new CBS deal were not disclosed, but it is believed to be a new record price.
While MLB doesn’t command such lofty numbers, it isn’t lacking. In 2001, FOX dropped some $2.5 billion for five years worth of MLB. Oddly enough, FOX declared a $909 million loss on that deal, while at the same time, MLB teams profited nearly an additional $700 million from the sale of local TV rights.14 Surprisingly FOX re-signed a seven-year deal with MLB in 2007 to the tune of another $3 billion.
The primary reason TV networks are so willing to dish out billions of dollars is because they can make that money back and more through advertising. Granted, having the rights to certain major events like the Super Bowl or World Series is a feather in any network’s cap. These events bring in a certain amount of added viewers along with a short, but massive ratings boost for the broadcast. TV networks can’t survive billion-dollar hits just to use professional sports as promotional tools for other programs. Especially when the money laid out to buy the rights for those athletic contests is greater than the money spent on the entire network’s other scripted programming content combined. The only way to recoup those costs is through ad revenue (for Super Bowl XLIII played in 2009, NBC raked in a reported $260 million in ad revenue on that day alone).
Advertising dominates sports programming, and these days it’s not just the typical commercials to which the average viewer is subjected. Games will be “brought to you by” certain companies. Halftime shows are “sponsored by” other companies. Pregame shows will have certain facts and stats highlighted “courtesy of” even other corporations. Heck, if you watch an episode of ESPN’s SportsCenter these days, it’s hard to tell the commercials apart from the actual show thanks to such segments as the “Budweiser Hot Seat” or the “Coors’ Cold Hard Facts.” The obtrusiveness of these advertisements and sponsorships exists because the networks need to get their money’s worth from every second of broadcast time.
There are many more revenue gimmicks that the networks and leagues use to get money out of their advertisers. Certain companies are willing to pay more for an “official product” designation. In 2007, Coors was the “official” beer of the NFL even though Coors hasn’t always been the NFL’s beer of choice. They had to pay for that honor. Many other companies are more than willing to do likewise. Look at NASCAR. The racing league is the ultimate advertising sell-out with their drivers appearing as walking billboards for their sponsors while eager fans, wanting to look like their driving heroes, do likewise. NASCAR was even willing to change the name of their championship title for a few extra bucks. What was once the Winston Cup became the Nextel Cup, then the Sprint Cup. They are willing to slap an advertiser’s sticker anywhere there is space to fit one (and anywhere a camera can film one) while their drivers are obligated to mention and thank sponsors’ names during interviews. How long will it be before other leagues take NASCAR’s lead and have their victorious athletes thanking Nike, Budweiser, and Chevy for helping them achieve their lifelong dreams? We’ve already had to endure years of newly crowned champions exclaiming to the nation, “I’m going to Disney World!” What’s next?
While watching a game, you may have noticed that certain ads are more repetitive than others. Corporations are willing to pay extra money to the networks to ensure theirs is the only such product type shown during a game. Sometimes purchased for a quarter, a half, or even an entire game, such exclusive ad time will guarantee a corporation like the Ford Motor Company that theirs is the only car company advertised for that time period. So when you’re starting to get hungry before the first half is over, McDonald’s may have been the only food commercials you’ve been subjected to, and really, doesn’t a Big Mac sound pretty good right about now? There is no democracy when it comes to selling ad time, just money and the greed for more.
