When the NFL announced that it would keep a stable of games - including the Thanksgiving Day game - for its NFL Network, many thought that it was a precursor to moving games away from the likes of Disney's ABC/ESPN, DirecTV, Fox, NBC and CBS. This has not been the case, however. Instead, the network has focused on commentary and providing additional content of relevancy to fans. The contest between the Baltimore Ravens and San Francisco 49ers has now justified the network's move, with the Thursday game bringing in an average of 10.7m viewers on the NFL Network, the highest in its eight-year history
The game constituted a 50 per cent rise in viewership over 2010's Thanksgiving Day game on NFL and did not include results from broadcast affiliates in the Baltimore and San Francisco regions. The NFL Network is available in approximately 65m homes, and receiving approximately $0.50 - $0.60 per subscriber per month in affiliate fees.
Analysis
The NFL Network is executing a sound strategy to promote its carriage on lower tiers on pay TV operators' lineups, but there isn't a huge demand for non-ESPN non-action commentary and filler. On the other hand, the growing success of exclusive NFL Network games is likely a part of the network's overall strategy to gain carriage.
The network received its biggest boost in subscribers in 2009 when it finalised a deal with Comcast, but the deal did not include placement on Comcast's basic tier, rather its basic digital tier.
We think that the wholesale moving of games away from current lucrative deals will not happen, especially given Disney's ABC/ESPN renewal which was signed at $1.9bn per year through to 2021. As the NFL seeks to monetise its assets, we think that it will continue to broker deals with top broadcasters rather than sacrificing the contracts in hopes of boosting the NFL Network.
The NFL is rumoured to be shopping around an additional eight brand-new Thursday night games. In order to boost its value, the league may opt to keep the games for NFL Network. If the games stay with NFL Network, the network would have access to 16 games.
As the NFL Network continues to ink carriage deals, its appeal is growing. The question is whether or not the team owners will decide that the NFL Network's limited exposure will justify its continued carriage of Thursday night games. Although the package didn't sell earlier this year, and if a buyer could be found we think that the deal could bring anywhere from $275m to $350m to the league, given the current economic climate and appetite for NFL content.
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