Key NFL and team execs are deep into a project of rewriting the handbook dictating how the league and clubs make money on the internet. Their decisions carry potentially far-reaching ramifications for teams’ media and sponsorship divisions — and key league strategies.
At issue is the “internet resolution,” a document first written in 2001, which by digital content standards may as well be before the Gutenberg Bible. Put briefly, it dictates what intellectual property belongs to the NFL and what belongs to teams, how and when each entity can monetize it online and who controls the message. It’s been updated over the years, but the underlying document is badly in need of a refresh — and the stakes are high.
Here are a few of the questions on the table:
This tug-and-pull between teams and the league is natural, and nobody’s suggesting the NFL abandon the basic notion of league supremacy in media. But teams’ local revenue hasn’t grown at nearly the pace that league revenue has, one source said, and some insiders think they can address that problem by giving teams more freedom while not undermining the league content business.
To be clear, the total revenue generated by all this activity is still dwarfed by the NFL’s bread and butter — the licensing of live game rights to giant media networks. But some people think the status quo approach to digital and social content is leaving a lot of money on the table.
Watch this space for more.
The NFL’s long-term Super Bowl tickets license to On Location Experiences won’t be renegotiated because of TKO’s acquisition of the company from Endeavor, a source familiar with the terms said. Also, the NFL won’t own any part of OLE after these deals. It will be paid out for its stake in Endeavor, a relic of its original 100% ownership of On Location, when Silver Lake’s go-private acquisition is completed.
When talk of Endeavor’s divestments and going private first peaked around the Super Bowl, I speculated in February that the NFL could use its Super Bowl ticket license — the backbone of On Location’s business — as a means of influencing the ultimate buyer. But that analysis was mostly predicated on an assumption that an On Location would be a totally new entity, not TKO, which shares key executive leadership (and their close ties to NFL owners and execs) with Endeavor.
Monday’s Chargers-Cardinals game on ESPN+ was the first time an NFL game drew fewer than 2 million viewers since 2008. At least, it’s the first time we know about it. An industry source said that ProFootballTalk’s report of 1.8 million viewers for the “Monday Night Football” ESPN+ exclusive is relatively accurate. The last reported viewership number under 2 million came for an NFL Network exclusive broadcast of Raiders-Chargers in December 2008.
There have been other streamed games that have not reported audiences, such as ESPN+’s popular Toy Story Funday Football last season (a Jaguars-Falcons game from London on a Sunday morning). Yahoo back in 2015 even had an exclusive Bills-Jaguars game. For the first few years of Amazon simulcasting “TNF” games, those numbers also were not distributed. For all we know, audiences for those games might have been especially low and we just didn’t know it. Don’t forget this important context: The leaguewide, top-line viewership trend averages that drive so much discourse don’t include these experimental one-offs.
Another important caveat for all of this: Every streaming-first NFL game, as well as games on cable TV, gets shown locally over-the-air in the participating markets.
This number is also important because it’s the first to come out for any exclusive ESPN+ game, and shows the uphill climb the platform has to grow audience numbers. This clearly wasn’t an ideal week for an ESPN+ number to come out. Bristol execs were again experimenting with staggered “MNF” start times in Week 7, and ABC/ESPN/ESPN2 carried the Ravens-Buccaneers game that took the bulk of the audience (16 million viewers for that shootout, which was enough for second-best “MNF” Week 7 audience over the last 14 years).
But for a streaming comparison back in Week 1, Peacock drew 14 million viewers for an exclusive Packers-Eagles game. However, that matchup was on a Friday night with no other NFL competition, and had the allure of being the NFL’s first game in Brazil (not to mention being a more appealing matchup).
Depending on your definition, about one-quarter of the NFL has shared ownership with another major U.S. pro sports property. Many are part of a holding company that manages the teams with an eye toward economies of scale. Their strategies all differ, but most have tried to sell the marketplace on sponsorships covering all the properties.
So, why haven’t we seen more packages like last week’s enterprise-level deal between Campbell’s and Harris Blitzer Sports & Entertainment, which includes the Commanders, in an arrangement that pairs up 16 brands and five properties in a single contract? It’s not exactly unique, but it’s still uncommon to see it get to the finish line. Why?
There are structural barriers on both sides, said HBSE CEO Tad Brown and Campbell’s CEO Mark Clouse. A good sponsorship deal is highly specialized to the precise audience and market, and every venue is different. Teams are also used to selling themselves that way.
“You have to be very proscriptive, and you have to do it,” Brown said. He said Josh Harris and David Blitzer have pushed the HBSE team to develop the capability to leverage their assets’ scale. “And you really have to put the resources into it. You have to put the people behind it, and you have to get strategically focused on why it’s going to be a difference-maker for you.”
Clouse agreed that it must be a concerted effort. “You’re asking team management to kind allow themselves to be laddered up into a scaled architecture,” he said. “And as Tad said, you have to create and invest in some infrastructure at the corporate level that can service the global customers.”
Clouse continued: “There are groups out there that are trying to leverage the portfolio, but if you don’t have the commitment to interface that way, you may be able to have a conversation, but by the time you get to execution, you’re backed down into every silo. And this doesn’t work well for us.”
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