Is CBS Really About to Offer Fans Free NFL Football?

Lots of fans are happy about Thursday Night Football’s new home. Cable and satellite providers say they should think twice before they cheer.

Not all fans should be cheering the NFL's Thursday night deal with CBS, say cable and satellite providers.
National Journal
Alex Brown
Feb. 7, 2014, midnight

{{ BIZOBJ (video: 4715) }}

Free foot­ball is com­ing to Thursday night.

The NFL this week an­nounced CBS will carry eight Thursday night games next sea­son, ex­pand­ing games to broad­cast that un­til now have been na­tion­ally avail­able only on the NFL Net­work.

But amid all the high fives, one group is sound­ing a dif­fer­ent note. The pay-TV in­dustry — ad­voc­ates for cable and satel­lite pro­viders — says the NFL-CBS deal will raise cus­tom­ers’ cable bill, cre­ate more black­outs, and di­min­ish value for some sub­scribers.

Last sea­son, the league aired 13 Thursday night games on NFL Net­work, which is avail­able in about 70 mil­lion homes. For foot­ball fans whose TV sub­scrip­tion doesn’t in­clude NFL Net­work, the CBS ad­di­tion is a big one. “Our goal is to bring these games to more fans on broad­cast tele­vi­sion with un­pre­ced­en­ted pro­mo­tion and vis­ib­il­ity,” NFL Com­mis­sion­er Ro­ger Goodell said.

Still, not every­one comes out a win­ner in the new ar­range­ment, warn cable and satel­lite ad­voc­ates. Their ar­gu­ment cen­ters around re­trans­mis­sion con­sent agree­ments, which un­der cur­rent law re­quire pro­viders and broad­casters to meet every few years and rene­go­ti­ate how much TV pro­viders will pay to carry a giv­en sta­tion. This can lead to black­outs if the two sides can’t agree on a price — cable com­pan­ies of­ten claim the broad­casters are ask­ing out­rageous prices, while broad­casters say pro­viders won’t pay fair mar­ket value for pop­u­lar pro­gram­ming.

The CBS deal will ex­acer­bate that prob­lem, say the pay-TV folks. Adding an ex­tra night of NFL pro­gram­ming (the league was re­spons­ible for 34 of TV’s 35 most-watched shows this fall) will give CBS af­fil­i­ates lever­age to up their prices when it’s time to rene­go­ti­ate. Pro­viders say they’ll be forced to en­dure black­outs or yield to broad­casters’ de­mands, passing the cost on to view­ers. “As broad­casters con­tin­ue to raise the cost of their pro­gram­ming, ex­po­nen­tially it gets passed down to con­sumers,” said the Amer­ic­an Tele­vi­sion Al­li­ance’s Bri­an Fre­d­er­ick.

It’s not just that CBS will be char­ging more. What really irks cable and satel­lite com­pan­ies is that the NFL Net­work will con­tin­ue to broad­cast the games. View­ers who paid ex­tra for an NFL Net­work pack­age are stuck pay­ing a high­er bill while the same games — or at least eight of them — go out free over the air. And just be­cause CBS view­ers can get the game now too doesn’t mean NFL Net­work will be char­ging less when it comes time to ne­go­ti­ate with pro­viders.

“The NFL has pulled a bait-and-switch here” on NFL Net­work sub­scribers, said one pay-TV ad­voc­ate whose or­gan­iz­a­tion has not taken an of­fi­cial po­s­i­tion on the NFL-CBS deal. “What you paid for the NFL Net­work was based on the value of those games be­ing ex­clus­ively on the NFL Net­work…. [They’re] chan­ging the get, but you’re still go­ing to pay the same amount. You do that in the auto-parts busi­ness and you’ll get a crow­bar through your wind­shield.”

One broad­cast in­dustry source de­clined to com­ment on the deal’s po­ten­tial im­pact to pay TV costs, but em­phas­ized its be­ne­fit to over-the-air view­ers. “[The deal] will keep pop­u­lar NFL pro­gram­ming on a broad­cast plat­form that is avail­able to 100 per­cent of Amer­ic­an house­holds,” the source said. “More im­port­antly, those NFL games will re­main free of charge to the nearly 20 per­cent of homes who have cut the cord or have nev­er sub­scribed to a pay TV ser­vice.”

CBS ad­mits the deal adds to its value. “The NFL is the most power­ful pro­gram­ming in tele­vi­sion,” CBS Sports Chair­man Sean Mc­Manus said in a state­ment. “To add a prime­time NFL pack­age to our suc­cess­ful Sunday AFC pack­age fur­ther strengthens our po­s­i­tion in the sports mar­ket­place.” But broad­casters say any mar­gin­al ef­fects on pay-TV deals pale in com­par­is­on to the the be­ne­fits for foot­ball fans who don’t cur­rently get NFL Net­work.

Still, the cable folks say that’s little con­sol­a­tion to sub­scribers who will see their bill go up. Even view­ers who don’t watch foot­ball will still have to foot the bill when CBS starts ask­ing for more money, said the pay-TV source. “Sixty, sev­enty, eighty per­cent of the mar­ket isn’t watch­ing CBS, but they’re pay­ing for it,” he said. Plus, ad­ded Fre­d­er­ick, NFL Net­work sub­scribers will have to pay more for games they’ve been pay­ing for all along. “The cable con­sumers are get­ting soaked twice on this,” he said.

While the pro­viders aren’t happy about the new ar­range­ment, they sound resigned to its ef­fects. “That’s just a giv­en — death, taxes, and high­er cable bills,” said the pay-TV ad­voc­ate.

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