CBS is close to re-upping with the NFL for another season of "Thursday Night Football," but in a sign that the league has leveraged its ratings might to the hilt, the network will have to share the two-year broadcast package with NBC.
While neither network disclosed any financial terms, people with knowledge of the particulars of the deal said CBS and NBC are set to sign off on a deal to divvy up $450 million in rights fee in exchange for a 10-game "TNF" slate.
Back in December, the NFL sent out an RFP for bids on an exclusive eight-game schedule and a second bifurcated package that would split the rights for the first 10 games of the coming season between two broadcast networks. Naturally, the participants in the auction were less than elated with the latter proposal, as it seemed likely to wreak havoc with fall scheduling and promotional activity while introducing an unnecessary element of confusion for fans looking to tune in every week.
But Robert Kraft, Chairman of the NFL's Broadcast Committee and the owner of the New England Patriots, was able to leverage the GRP-bestowing might of the league, persuading CBS and NBC to accept this rather unconventional deal in exchange for the relative security of a two-year commitment.
Per terms of the deal, CBS will air the first five "TNF" games from mid-September to mid-October, whereupon NBC will assume the remainder of the broadcast duties. All 10 games will be simulcast on NFL Network. In the latter half of the season, NFL Net will carry eight exclusive prime time games on select Thursdays and Saturdays.
In securing another season of "TNF," CBS locked in a sure-fire ratings draw, a magnet for movie, auto and QSR dollars and a reliable promotional vehicle for its other prime time series. The second season of the Thursday night NFL showcase averaged 17.5 million viewers and a 10.9 household rating, marking a 5% improvement versus the year-ago 16.8 million viewers and a 10.4 rating.
Among the most visible marketers that bought time in and around "TNF" were returning halftime sponsor Lexus, pregame backer Lowe's and postgame sponsor Mazda. FanDuel, Nissan, Apple, McDonald's, Ford and GMC also were among the brands that bought the most units in this season's "TNF" broadcasts, while Lionsgate was the most active movie studio.
The big turnout for the CBS broadcasts helped justify the network's beefy ad rates for its in-game inventory. According to media buyers, TNF last season was the fourth priciest NFL package on the market, boasting an average unit cost of well over a half-million dollars for every 30-second increment of airtime.
"The NFL has the most powerful programming on television, and we are delighted to expand our primetime schedule to 24 regular season games," said NBC Universal CEO Steve Burke, by way of announcing the deal. "The NFL is a terrific partner, and we could not be more pleased about expanding our relationship."
Leading up to today's announcement, CBS had said it would not overbid on a third helping of "TNF," or as CBS Corp. CEO Les Moonves told investors last December, "we won't pay something stupid." At the same time, some insiders feared that the NFL would look to double its rate fee this time around. The league showed far more forbearance when it first renewed with CBS; the step-up between seasons one and two of the "TNF" broadcast package was a relatively innocuous $25 million, from $275 million in 2014 to $300 million this past year.
Under the terms of the new deal, CBS will lose three prime time NFL broadcasts at an annual savings of around $75 million. Of course, in ceding that triad of broadcasts, the network also forfeits a significant chunk of ad sales revenue -- as much as $120 million, given the average unit cost of a 30-second in-game spot.
For all that, CBS was unwilling to turn its back on the franchise it had helped create, and thus it ultimately consented to the hybrid deal. As a ratings draw and a promotional vehicle, there is nothing that can lay a glove on the NFL, and the league isn't shy about taking full advantage of its unparalleled and outsized impact on the media marketplace.
Mr. Goodell added that a standalone over-the-top package is in the works as well, which will result in a "unique tri-cast on broadcast, cable and digital platforms."
The announcement comes just days before CBS kicks off Super Bowl 50 in Santa Clara, Calif. The Carolina Panthers are 6-point favorites against the Denver Broncos, but even should a blowout ensue, a mismatch is unlikely to have a cratering impact on the Nielsen ratings. But for the blackout-delayed Ravens-49ers game in 2013, each of the last eight Super Bowl broadcasts has set a ratings record for overall viewers.
Last year's Patriots-Seahawks showdown delivered a staggering 114.4 million viewers and a 47.5 household rating. Seventy-one percent of all TVs in use at the time of the Super Bowl XLIX broadcast were tuned in to NBC.