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Les Moonves: Broadcast Will Persevere in Looming NFL Rights Battle Against Big Tech

By Published on .

'The tech giants all want to be involved in the NFL,' said CBS boss Les Moonves. 'It's the best product in television. ... [But] I think the NFL still believes in the sanctity of broadcasting.'
'The tech giants all want to be involved in the NFL,' said CBS boss Les Moonves. 'It's the best product in television. ... [But] I think the NFL still believes in the sanctity of broadcasting.'  Credit: Patrick T. Fallon/Bloomberg

The current NFL broadcast rights package isn't due to expire until 2022, but Les Moonves has already resigned himself to the idea that the next bidding war will pit the networks against the likes of Google and Facebook.

Speaking yesterday at the Deutsche Bank 2017 Media & Telecom Conference, the CBS Corp. chairman, president and CEO said that while a battle with the cash-rich digital overlords is all but inevitable, the NFL will very much remain a TV staple.

"Look, the tech giants all want to be involved in the NFL. It's the best product in television," Mr. Moonves said. "There's going to be a lot of activity. As we head toward that large deal, I think these companies are going to be part of it, [but] I think the NFL still believes in the sanctity of broadcasting."

Mr. Moonves went on to note that broadcast TV remains the most surefire and efficient way to reach a mass audience, which should give CBS, NBC and Fox a leg up when it comes time to hash out a new multibillion-dollar deal with the NFL. "There's a reason there's been no Super Bowl on cable, that the three major packages are still on network [TV]," Mr. Moonves said. "You know, ESPN has ["Monday Night Football"], but I think there's the belief and the knowledge that you can't get 115 million people watching the Super Bowl online."

The evidence would seem to support Mr. Moonves' thesis. While Fox's linear TV broadcast of Super Bowl LI averaged 111.3 million viewers, the Fox Go livestream averaged just 1.72 million viewers. Streaming represented just 1.5% of the total Super Bowl audience, which is in line with the adoption rates for Twitter's livestreaming of CBS and NBC's "Thursday Night Football" broadcasts.

For all that, it would be unthinkable for the NFL to hammer out a new set of rights deals that doesn't include at least one digital behemoth. "I think they'll be part of any further deal that we do," Mr. Moonves conceded. "We will be sharing or splitting or doing stuff, but I still think of broadcast as being really important to the NFL, that it is the national pastime -- sorry, baseball, but football has overtaken that name -- and I think it'll be on the broadcast networks, I really do. I think that's going to be important to them."

Under the current NFL rights package, the three broadcast nets and ESPN pay a combined $39.6 billion for the privilege of carrying live NFL games. DirecTV's exclusive "NFL Sunday Ticket" out-of-market package tosses another $12 billion into the league's revenue stream, and the shared CBS-NBC "Thursday Night Football" suite is worth some $450 million.

Speaking of Thursday nights, Mr. Moonves said that he would be willing to re-up for the shared package before it expires at the close of the upcoming season. "We would do the same deal. The scheduling was a little all over the place with NFL Network, [but] I think that's going to be rectified this year," he said. "Yes, we lose a bit of money, you know, on paper on Thursday night, we make money on Sunday, but there are so many added benefits with the rest of the schedule. Outside of 'Sunday Night Football,' it's the highest-rated program on television, so it's still important, we would like to have it. You know, I liked it better when we had all eight games ourselves, but we'll see what happens."

According to Nielsen live-plus-same-day data, CBS's five-game "TNF" package last season averaged 11.5 million viewers, a 4.6 rating among adults 25-54 and a 9.0 household rating. When the NFL Network simulcast is thrown into the mix, those five Thursday night games averaged 14.7 million viewers and a 5.8 in the demo.

As Mr. Moonves noted, Sunday afternoons in the fall are when CBS really shines. The network's AFC-heavy national window is the second most-watched, highest-rated program on TV behind only Fox's NFC showcase, averaging 22.4 million viewers and a 12.8 household rating. Those numbers were down 11% and 12%, respectively, versus the year-ago 25.1 million viewers/14.6 household rating.

Football aside, Mr. Moonves was in his usual high spirits when discussing CBS's entertainment lineup, saying that the new crop of dramas and sitcoms has been so successful that "at least five, maybe six" of them will return for the 2017-18 broadcast season. Given its anticipated return rate and relatively low level of attrition, there's very little room for new shows on the CBS schedule, but the network could use some help in its Wednesday and Thursday 10 p.m. time slots.

"As we look toward next year's schedule, and we've ordered 17 pilots, which is a little below what our normal average is," Mr. Moonves said. "I expect there to be probably four new shows on the schedule. That's what we're looking at right now, probably two comedies and two dramas. But that all could change depending on how good they come in."

Shoe-ins for renewal are the first-year dramas "Bull" and "MacGyver," as well as a crop of freshman sitcoms that includes "Kevin Can Wait." "Man with a Plan," "The Great Indoors" and the consistent Monday night newcomer "Superior Donuts." That would leave "Ransom," "Training Day" and "Pure Genius" out in the cold, and "Doubt" already had been canceled two episodes into its run.

Among the pilots that would appear to have the best shot at earning a place on CBS's roster is the "Big Bang Theory" spinoff "Little Sheldon," which imagines what Jim Parsons' character might have been like as a 10-year-old genius growing up in East Texas. Mr. Parsons is a co-executive producer on the sitcom, where he'll be working alongside "Big Bang" co-creator Chuck Lorre and showrunner Steve Molaro.

Mr. Moonves said CBS is "virtually on the two-yard-line" in its negotiations for an 11th and 12th season of "Big Bang" and that official word of a renewal should begin to circulate soon. "Little Sheldon" is expected to lead out of "Big Bang" in the Thursday 8:30 p.m. slot.

Looking ahead to the summer upfront bazaar, the CBS boss said that while it would be premature to start tossing numerical projections around, he anticipates another strong sales period. "Nowhere else do you get the bang for the buck as you do on broadcast," Mr. Moonves said. "And I think there's a realization that all digital advertising is not terrific. It's not as effective as broadcast advertising. There's a lot of false reports. … Digital's sexy, digital's cool, digital is important, but if you want to go sell a car you better go on 'NCIS,' which is watched by 20 million people. That's how you sell cars."

Mr. Moonves added that CBS would sell more upfront packages based on the expansive C7 currency, noting that the split with C3 deals in last year's sell-off was "probably 50-50." He said that CBS's scatter pricing is currently up 20% compared with its 2016-17 upfront rates, which should bode well for the network's prospects in this summer's bazaar. (A year ago at this time, Mr. Moonves told the Deutsche Bank crowd that the ad market was stronger than it had been in "many, many years." CBS would go on to take in around $2.5 billion in advance bookings, up as much as 5% compared with the relatively tepid 2015-16 upfront.)

Over the course of Mr. Moonves' wide-ranging 43-minute interview, he spoke on a number of subjects, including the late-night wars, the ongoing measurement crisis, TV's rapidly evolving business model and the pride CBS takes in being perhaps the last network to truly live up to the the hoary old "broadcast" label. On the latter topic, the executive was characteristically expansive.

"We are the populist network. We are the big tent. We like viewers from eight to 80," Mr. Moonves said, adding that CBS's status as TV's biggest reach vehicle makes it a magnet for talent that long to have their work seen by the biggest possible audience. "It's harder to get on the schedule at CBS than the other places, because they have more holes, but once you get on your chances at success are much greater. … We've won six out of the last 10 Super Bowls. Or you can go play in Cleveland. Which do you want?

"As we like to say at CBS, 'no, you're not going to win Emmys, you're just going to make a lot more money and get a lot more viewers. You know. They have those nice things on their walls, and you'll buy a bigger house.' That's your choice. I like having the bigger house myself, but…"

CBS will present its fall schedule to buyers and advertisers on Wednesday, May 17, at Carnegie Hall.

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