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When hindsight comes around will Cousins’ FA deal...


SenorGato

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look better or worse than the inevitable Winston and Mariota extensions? Times are a’changin! League salaries are to blow up over the next three years. It’s by design so fear not, our lords the owners will be safe and ready to drop the hammer after 2020.

Winston’s a virtual a lock to become the first NFL player to get $100 million garaunteed when he signs before 2020. Mariota won’t be much cheaper, if at all. 

In that context, what does Cousins at $60 even $90 million look like? 

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28 minutes ago, jetsons said:

With the league revenues taking a significant hit due to low attendance I wouldn't bet anything worthwhile on that.

http://m.sportsbusinessdaily.com/Journal/Issues/2017/03/06/Leagues-and-Governing-Bodies/NFL-revenue.aspx?

 

Quote

The NFL will take in roughly $14 billion of revenue this season, over $900 million more than last year.

....

Those revenue figures are incomplete, as the league does not share every penny with the players, shielding hundreds of millions of dollars in areas such as stadium finance. So the total revenue for the league is almost surely to top the $14 billion mark this year.

 

Cap’s going up for a reason 

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Think salary caps are a joke.But the drop in TV ratings, what ever the reasons, should be cause for concern. Rights fees for the first time ever may not be going up for sports programming across the board. But the NFLPA, s poorly run as it is,  would rather cut off limbs than agree to a cut in the cap. May not happen soon, but it's out there as the broadcast contracts expire.  If ESPN/Disney is losing money of Monday night and the Thursday games are a ratings disaster, that is  an earthquake crossed with a hurricane debacle for the NFL's long term bottom line.

Some things they can change-stand for the anthem, perhaps(as an aside, the demographics-middle and working class white guys- of the NFL audience has made this  stupid; with a commissioner with half a brain it could have been addressed)? But others, like the crapitude of the games, and young people cutting the cord and not watching TV sports, those may be long term realities. 

Taking a huge step back though; Cousins is not coming here if Arizona or Denver or some other south or west based team offer him big money. If the money is all roughly the same (without NJ taxes) this is an awful situation for a veteran QB. 

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8 minutes ago, Titan24 said:

Reports are Aaron Rodgers could get a new deal soon which will set the market.  May be NFL's first $200 mil contract.

Any QB outside of Brady even in same stratosphere of Rodgers money is a disgrace anyway.

The right kind of disgrace THO. People pretending the NFL is going broke doesn’t help anyone but the people at the top laughing to the bank after those deals. Plebs vs plebs yo 

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5 hours ago, SenorGato said:

look better or worse than the inevitable Winston and Mariota extensions? Times are a’changin! League salaries are to blow up over the next three years. It’s by design so fear not, our lords the owners will be safe and ready to drop the hammer after 2020.

Winston’s a virtual a lock to become the first NFL player to get $100 million garaunteed when he signs before 2020. Mariota won’t be much cheaper, if at all. 

In that context, what does Cousins at $60 even $90 million look like? 

**** that IF the 49ers transition tag on Jimmy G I make an offer of 100 million guaranteed, sh*t I’d even go as far as to offer him 5 years 125 million fully guaranteed, now yes it sounds crazy, and stupid, BUT if it doesn’t work out how is it any different then anything the Jets have done the last 50 years at QB.  The 49ers HATE giving more then 2 years guaranteed never mind the full contract they might actually balk at this, and get no compensation, unfortunately you can’t add the poison pill in offer sheets any more, but you can get ridiculous with the offer if nothing else it ****s the 49ers up for a few years, and they would have to let Hyde, and Reid walk maybe, and leave little left to build around Jimmy G, and then the Jets have to go full nuclear offensive draft with first 4 picks AND also sign a weapon and at least 1 OL in FA.

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6 hours ago, SenorGato said:

look better or worse than the inevitable Winston and Mariota extensions? Times are a’changin! League salaries are to blow up over the next three years. It’s by design so fear not, our lords the owners will be safe and ready to drop the hammer after 2020.

Winston’s a virtual a lock to become the first NFL player to get $100 million garaunteed when he signs before 2020. Mariota won’t be much cheaper, if at all. 

In that context, what does Cousins at $60 even $90 million look like? 

Winston sucks and will never get 100 mil guaranteed

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Cousins is the only one with multiple bidders. All the other QBs mentioned are bidding against themselves 

Cousins will become the highest paid QB because of that 

Fans will shake their fists, complain, but it's just the reality. 

If you don't get cousins you have to hope the rookie QB pans out..... In 3 years when you may not have a job anymore. 

If the Jets sign cousins, it will be amusing to see all the armchair GMs that would have been able to get him for less. 

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11 minutes ago, Larz said:

Cousins is the only one with multiple bidders. All the other QBs mentioned are bidding against themselves 

Cousins will become the highest paid QB because of that 

Fans will shake their fists, complain, but it's just the reality. 

If you don't get cousins you have to hope the rookie QB pans out..... In 3 years when you may not have a job anymore. 

If the Jets sign cousins, it will be amusing to see all the armchair GMs that would have been able to get him for less. 

I agree. Dataset is so small for even competent starting QBs to hit the market and Cousins is better than "competent." A bidding war will ensue.

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1 hour ago, jgb said:

I agree. Dataset is so small for even competent starting QBs to hit the market and Cousins is better than "competent." A bidding war will ensue.

He will get midnight visitors just like Bart Scott did lol

I just hope he doesn't turn it into some big media production 

Listen to the pitches and make a call, use the stalking horse to drive up the price and be done with it. 

 

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8 hours ago, SenorGato said:

look better or worse than the inevitable Winston and Mariota extensions? Times are a’changin! League salaries are to blow up over the next three years. It’s by design so fear not, our lords the owners will be safe and ready to drop the hammer after 2020.

Winston’s a virtual a lock to become the first NFL player to get $100 million garaunteed when he signs before 2020. Mariota won’t be much cheaper, if at all. 

In that context, what does Cousins at $60 even $90 million look like? 

First, Winston may get $100M but he won’t get anywhere near the guaranteed $$ that Stafford, Ryan, or eventually Mariota will get.  He has not shown that he is capable of being a leader of an NFL franchise and winning games.

And when the Eagles signed Bradford for $18M the market got reset.

 

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9 hours ago, SenorGato said:

look better or worse than the inevitable Winston and Mariota extensions? Times are a’changin! League salaries are to blow up over the next three years. It’s by design so fear not, our lords the owners will be safe and ready to drop the hammer after 2020.

Winston’s a virtual a lock to become the first NFL player to get $100 million garaunteed when he signs before 2020. Mariota won’t be much cheaper, if at all. 

In that context, what does Cousins at $60 even $90 million look like? 

Winston? He didn't have that great of a season this year due to a lot of factors. When he played he wasn't consistent and still has a long way to go before he gets those large dollars you're talking about. Boom or bust situation if you ask me.

Mariota on the other hand will most likely cash in. How much largely depends on his performance between then and now. If his development continues and the Titans become an upper tier team then Mariota will get that big contract.

Since Cousins hasn't even won a playoff game yet can giving him a record breaking contract be justified? Before the 2017 season his record with the Redskins was 19-21-1. Against teams with 9+ wins was 2-11. Teams with 8+ wins 5-13. This year the trend did continue although the Skins had a lot of injuries. Against 9+win teams 2-8. The Cardinals finished 8-8 and the Skins won that game. The Cards were the only 8 win team they played. 25-30 mil per for that? I'm sure the Cousins guys will point to his stats and the like but after seeing the end results that are there in black and white I'm even more against signing this guy for big money.

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9 hours ago, Bugg said:

Think salary caps are a joke.But the drop in TV ratings, what ever the reasons, should be cause for concern. Rights fees for the first time ever may not be going up for sports programming across the board. But the NFLPA, s poorly run as it is,  would rather cut off limbs than agree to a cut in the cap. May not happen soon, but it's out there as the broadcast contracts expire.  If ESPN/Disney is losing money of Monday night and the Thursday games are a ratings disaster, that is  an earthquake crossed with a hurricane debacle for the NFL's long term bottom line.

Some things they can change-stand for the anthem, perhaps(as an aside, the demographics-middle and working class white guys- of the NFL audience has made this  stupid; with a commissioner with half a brain it could have been addressed)? But others, like the crapitude of the games, and young people cutting the cord and not watching TV sports, those may be long term realities. 

Taking a huge step back though; Cousins is not coming here if Arizona or Denver or some other south or west based team offer him big money. If the money is all roughly the same (without NJ taxes) this is an awful situation for a veteran QB. 

if the nfl wanted to get the tv revenue back up then they should be making sure the large market teams are doing well.  ny is the media capital in this country and having two so-so teams in the market isn't doing anyone any favors.

as for cousins, the bottom line is what impact will such a high contract do to the rest of the team?  they have a few in house free agents and every year another group of players come off their rookie contracts and will want to be paid.  if the team is successful it might be easier to sign those guys.  if it muddles in the 6-10 to 8-8 range fugetaboutit.

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27 minutes ago, JetFaninMI said:

Since Cousins hasn't even won a playoff game yet can giving him a record breaking contract be justified? 

What an odd question but the answer is yes. Is anyone buying Cousins for the Redskins ‘15-‘17 records or to put him in a ‘15-‘17 time loop? Nope! What actually will translate for a buyer is his skills at passing the ball, which most definitely puts this franchise (or any in need with the money) in a position to have success in the playoffs. 

Larz, Luck got $86 million with no suitors because he could say no and hit FA where he gets more. Same thing with the QBs coming up for extension like Mariota and Winston, eventually Wentz and whoever I’m forgetting. 

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10 hours ago, Bugg said:

Think salary caps are a joke.But the drop in TV ratings, what ever the reasons, should be cause for concern. Rights fees for the first time ever may not be going up for sports programming across the board. But the NFLPA, s poorly run as it is,  would rather cut off limbs than agree to a cut in the cap. May not happen soon, but it's out there as the broadcast contracts expire.  If ESPN/Disney is losing money of Monday night and the Thursday games are a ratings disaster, that is  an earthquake crossed with a hurricane debacle for the NFL's long term bottom line.

Some things they can change-stand for the anthem, perhaps(as an aside, the demographics-middle and working class white guys- of the NFL audience has made this  stupid; with a commissioner with half a brain it could have been addressed)? But others, like the crapitude of the games, and young people cutting the cord and not watching TV sports, those may be long term realities. 

Taking a huge step back though; Cousins is not coming here if Arizona or Denver or some other south or west based team offer him big money. If the money is all roughly the same (without NJ taxes) this is an awful situation for a veteran QB. 

Well said except for the aside note. No politics at sporting events, PERIOD.

I would add that when the tv contracts start to fall, the advertisers will follow. The NFL came very close to losing Anheuser Busch this year over the anthem. This is a very important off season for the NFL. If they continue to operate status quo they will suffer. 

If the NFL devalues the qb position by changing some rules and making the running game more relevant  again, the NFL contracts will come down. The league as it stands now, is too reliant on the passing game and its made the game awful.

 

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4 minutes ago, NYJ37/12 said:

If they NFL devalues the qb position by changing some rules and making the running game more relevant  again, the NFL contracts will come down. 

 

Good old fashioned collusion will work for this, just don’t expect those prices coming down over the next three years. Like I said - fear not, our lords will strike back with a vengeance.

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6 minutes ago, SenorGato said:

What an odd question. Is anyone buying Cousins for the Redskins ‘15-‘17 records or to put him in a ‘15-‘17 time loop? 

LOL. You are kidding right? The guy is 8-21 LIFETIME against teams with 8 wins or more. 1 season with a record like that could be discounted due to injuries etc. A career with that record is a trend. To casually dismiss it is reckless and foolish. I understand you want the guy but to not look at the facts is just plain dumb. Committing big dollars to Cousins with the holes this team has is a mistake and will most likely continue that trend. We all are wanting a FQB but they need to DRAFT one and shape that guy. After looking at Cousins career record I am even more against signing him.

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Gato might have smoked peyote because he is speaking wisdom throughout this thread.

Many fans live in this fantasy land concerning professional athlete salaries.  NFL revenues go up every year, the average salary for players goes up every year.  Supply and demand and cap space rule.

There is no system in the NFL where the absolute best player gets the most money.  It's need and availability that dictate salaries on a yearly basis.  Cousins is going to get a huge deal, regardless of him never making the playoffs, because teams see him as the best available free agent starting QB, a position where there is a dearth of good talent.

No, the NFL is not changing to devalue the QB position because Case Keenum and Blake Bortles are in the title game.  That just means that if Keenum or Bortles become UFAs, they'll get huge money from a team desperate for a starting QB.

Trying to be "cost conscious" with the most important position in the sport merely leads to your team not signing the QB the team wants.

 

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12 minutes ago, T0mShane said:

From a business standpoint, imagine giving a $130 million dollar contract to a QB that will generate zero excitement in the fanbase. 

The fanbase’s emotions are irrelavent towards improving this team’s ability to pass the ball and will change with the direction of the latest wind. 

14 minutes ago, JetFaninMI said:

LOL. You are kidding right? The guy is 8-21 LIFETIME against teams with 8 wins or more. 1 season with a record like that could be discounted due to injuries etc. A career with that record is a trend. To casually dismiss it is reckless and foolish. I understand you want the guy but to not look at the facts is just plain dumb. Committing big dollars to Cousins with the holes this team has is a mistake and will most likely continue that trend. We all are wanting a FQB but they need to DRAFT one and shape that guy. After looking at Cousins career record I am even more against signing him.

CASUALOL no not kidding. You’re not buying some other team’s W-L record from ‘15-‘17. We are all wanting a franchise QB but attaching magical abilities to the position is not going to do that, getting someone who knows how to pass a football will do that and Cousins has shown that ability. Over the past three years in aggregate he’s a top ten passer, which is far more relevant to future wins than what the Redskins managed to get out if it in the past. 

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The cap goes up every year.

The collective bargaining agreement continually inhibits the development of talent during the pre-season league-wide, forcing most teams to work backwards from zero each season. Which means the supply of great QBs is diminishing, thus increasing the value of good QBs, and even the mediocre. 

The increased popularity and exposure of the NFL has created a heightened level of impatience to "win now", like never before.

All we're talking about here are basic economic concepts like supply and demand, and inflation, and diminished quality of product in a monopolized market.

 

 

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6 minutes ago, SenorGato said:

The fanbase’s emotions are irrelavent towards improving this team’s ability to pass the ball and will change with the direction of the latest wind. 

CASUALOL no not kidding. You’re not buying some other team’s W-L record from ‘15-‘17. We are all wanting a franchise QB but attaching magical abilities to the position is not going to do that, getting someone who knows how to pass a football will do that and Cousins has shown that ability. Over the past three years in aggregate he’s a top ten passer, which is far more relevant to future wins than what the Redskins managed to get out if it in the past. 

Disagree. Cousins has the ability to pass the football. No doubt. What he doesn't have is the ability to win games against the better teams in the NFL. He did put up the #'s but they didn't win. Blame the coaches or circumstance but the reality is that Cousins has too be held accountable for his teams record. One season I would give you but its over the course of his career. I think your passion for a FQB is admirable but for this team, with the holes it has Cousins isn't the answer.

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18 minutes ago, JetFaninMI said:

Disagree. Cousins has the ability to pass the football. No doubt. What he doesn't have is the ability to win games against the better teams in the NFL. He did put up the #'s but they didn't win. Blame the coaches or circumstance but the reality is that Cousins has too be held accountable for his teams record. One season I would give you but its over the course of his career. I think your passion for a FQB is admirable but for this team, with the holes it has Cousins isn't the answer.

That’s not a skill and no he does not need to be held accountable for the Redskins’ W-L record because that’s not what is being bought. 10-12 years ago people were saying Peyton Manning couldn’t win in the playoffs. It’s nonsense, pass the ball well and consistently in this league and you have a shot to win. All these holes on the roster are dwarfed by the franchise’s consistent inability to pass the ball competitively, none come close to the importance and most are probably fixed by fixing the passing offense anyway. The argument that there’s too many holes to secure a passer like Cousins is almost as bad as the W-L record thing, QB is THE hole with everything else coming after. After that fix the OL, get a running game, a TE that can catch for another safety valve, and a premium pass defender this team gets competitive fast. 

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30 minutes ago, Integrity28 said:

The cap goes up every year.

The collective bargaining agreement continually inhibits the development of talent during the pre-season league-wide, forcing most teams to work backwards from zero each season. Which means the supply of great QBs is diminishing, thus increasing the value of good QBs, and even the mediocre. 

The increased popularity and exposure of the NFL has created a heightened level of impatience to "win now", like never before.

All we're talking about here are basic economic concepts like supply and demand, and inflation, and diminished quality of product in a monopolized market.

 

 

EXACTLY

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17 minutes ago, Bugg said:

Sadly as to Winston and Cousins both, this may be true. 

Considering they have/had you convinced the league is growing broke as revenues went up almost a billion dollars, maybe they’re not so stupid? These owners are alot of things bad but stupid isn’t one of them. They’re making money on these deals, lots and lots of money. Its not like these are all one year deals for the players, $100 million spread out over years is nothing when each franchise is pulling in multiple times that lump in revenue every year. 

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33 minutes ago, SenorGato said:

Considering they have/had you convinced the league is growing broke as revenues went up almost a billion dollars, maybe they’re not so stupid? These owners are alot of things bad but stupid isn’t one of them. They’re making money on these deals, lots and lots of money. Its not like these are all one year deals for the players, $100 million spread out over years is nothing when each franchise is pulling in multiple times that lump in revenue every year. 

Not going broke, but some bad trends. Some can be reversed but some cannot. Let's see what happens next time the broadcast deals come up. The current ones run through 2022. On strictly a plus/minus basis only Fox makes money. But the networks have always used the NFL to promote their other shows,  a loss leader. Which is why you KNOW every crappy CBS show from watching Jets games. 

 How Much Do the NFL and TV Partners Make a Year?

 

The NFL makes over 7 billion a year for the NFL Sunday Ticket, the NFC, the AFC, Monday Night Football and Thursday night football television packages from CBS, NBC, Fox, DirecTV and ESPN/ABC.  

Those numbers look like this:

ESPN pays $2 billion a year for Monday Night Football and one wild card NFL playoff game that airs on ABC and ESPN.

Fox pays $1.1 billion a year for the NFC television package and its playoff games.  

CBS pays $1 billion a year for the AFC television package, its playoff games, and an additional $230 million for five Thursday night football games. 

NBC pays $950 million for Sunday Night football, some playoff games, and an additional $230 million for five Thursday night football games.  

In addition to this, Fox, CBS, and NBC all rotate the Super Bowl every three years, which is a massive revenue generator worth several hundred million dollars a year. 

Finally, DirecTV pays $1.5 billion a year for the NFL Sunday Ticket. 

Add it all up and the NFL is making roughly $7 billion for its football games just off television rights. The explosion in TV revenue is why the NFL’s salary cap per team has soared from $36 million a year in 1994 to $167 million a year for 2017.  

But how much, if anything, do all these networks actually make off NFL games? Forbes has an interesting article that projects total ad revenue per game and totals up everything for the 2016 season. Here’s their NFL Ad Revenue projections (including playoffs) for the 2016 season. 

Fox: $1.44 billion 

NBC: $909 million

CBS: $867 million 

ESPN/ABC: $285 million

(DirecTV’s business model here isn’t that complicated, but it’s much different than the network models. DirecTV figures that in addition to the $500 million or so they make off selling the NFL Sunday Ticket to the two million yearly subscribers for the network, they also need to have at least 1 million people sign up for DirecTV that otherwise wouldn’t. Because then DirecTV gets 12 months of subscriptions off of offering the NFL Sunday Ticket.)  

Now these numbers are estimates, but what immediately jumps out at you is that in non-Super Bowl years it would appear that Fox, NBC, and CBS are all roughly breaking even on the NFL television packages. Every third year Fox, NBC and CBS get an additional $400 million or so off carrying a Super Bowl. Given that putting on these games has to cost several hundred million a year, NFL games are not huge money makers for Fox, NBC and CBS. 

But look at the ESPN/ABC number, wow. 

ESPN/ABC pays $2 billion a year for the NFL and only makes $285 million back on advertising revenue. Given that you’re talking about a couple of hundred million a year to produce these games, you’re talking about ESPN losing $2 billion a year on the NFL. 

So how in the world can ESPN justify paying the NFL $2 billion a year?

The cable bundle.

ESPN makes roughly $8 a month from each of the 88 million cable and satellite subscribers it has in the country. That adds up to over $8 billion a year in revenue. The problem with the math here is that ESPN is losing millions of cable and satellite subscribers a year. This is why I continue to say that cable sports rights fees are a bubble. The Fox, NBC, and CBS payments to the NFL require some semblance of connection to economic reality — the networks have to make their payments connect somewhat to what they can make off advertising. ESPN, meanwhile, is simply handing over your cable subscriber fees to the NFL. The airing of the games themselves on ESPN costs the network nearly two billion a year. 

In fact, how much does Monday Night Football and the resulting NFL programming on ESPN cost each of ESPN’s 88 million cable and satellite subscribers a year?

$19.50!

Think about that for a minute, every single cable and satellite subscriber in the country is paying $19.50 a year, whether they watch or not, for Monday Night Football and ESPN’s NFL content. Given that average viewership for a Monday Night Football game is around 12 million, that means that the vast, vast majority of cable and satellite subscribers in this country are paying nearly $20 a year for content they never watch.

So what happens when these TV deals expire?

Well, the NFL’s money from Fox, CBS and NBC is probably safe when the next TV deal starts getting hammered out in a few years. Now the amount of money each of these networks pays might not increase as much as it has been because the networks all have to avoid losing too much money on NFL games, but the amount of money on the table isn’t going to go down when it comes to network television.

But here’s the big question that I’ve been asking for a couple of years now — can ESPN, which is losing hundreds of thousands of subscribers a month, still afford to pay $2 billion a year for Monday Night Football in the next television deal? And that leads to several more questions: Is it possible ESPN might have to shift these games to ABC in order to make a competitive bid? And if that happened would ESPN still be able to justify the $8 a month that every cable and satellite consumer pays for the network? Would the NFL take less than $2 billion if there is no other cable bidder who can approach what ESPN pays? Or could Facebook, Google, Apple, Netflix or some other large tech company decide to enter the sports business and fundamentally alter the league’s economic trajectory?

The sports rights bubble has popped when it comes to cable sports exclusivity. And as you can readily see from the above data, ESPN’s business model is much different than CBS, Fox, and NBC’s. 

With the cable bundle fraying what happens in the years ahead is by far the biggest story in sports. 

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11 minutes ago, Bugg said:

Not going broke, but some bad trends. Some can be reversed but some cannot. Let's see what happens next time the broadcast deals come up. The current ones run through 2022.

 How Much Do the NFL and TV Partners Make a Year?

 

The NFL makes over 7 billion a year for the NFL Sunday Ticket, the NFC, the AFC, Monday Night Football and Thursday night football television packages from CBS, NBC, Fox, DirecTV and ESPN/ABC.  

Those numbers look like this:

ESPN pays $2 billion a year for Monday Night Football and one wild card NFL playoff game that airs on ABC and ESPN.

Fox pays $1.1 billion a year for the NFC television package and its playoff games.  

CBS pays $1 billion a year for the AFC television package, its playoff games, and an additional $230 million for five Thursday night football games. 

NBC pays $950 million for Sunday Night football, some playoff games, and an additional $230 million for five Thursday night football games.  

In addition to this, Fox, CBS, and NBC all rotate the Super Bowl every three years, which is a massive revenue generator worth several hundred million dollars a year. 

Finally, DirecTV pays $1.5 billion a year for the NFL Sunday Ticket. 

Add it all up and the NFL is making roughly $7 billion for its football games just off television rights. The explosion in TV revenue is why the NFL’s salary cap per team has soared from $36 million a year in 1994 to $167 million a year for 2017.  

But how much, if anything, do all these networks actually make off NFL games? Forbes has an interesting article that projects total ad revenue per game and totals up everything for the 2016 season. Here’s their NFL Ad Revenue projections (including playoffs) for the 2016 season. 

Fox: $1.44 billion 

NBC: $909 million

CBS: $867 million 

ESPN/ABC: $285 million

(DirecTV’s business model here isn’t that complicated, but it’s much different than the network models. DirecTV figures that in addition to the $500 million or so they make off selling the NFL Sunday Ticket to the two million yearly subscribers for the network, they also need to have at least 1 million people sign up for DirecTV that otherwise wouldn’t. Because then DirecTV gets 12 months of subscriptions off of offering the NFL Sunday Ticket.)  

Now these numbers are estimates, but what immediately jumps out at you is that in non-Super Bowl years it would appear that Fox, NBC, and CBS are all roughly breaking even on the NFL television packages. Every third year Fox, NBC and CBS get an additional $400 million or so off carrying a Super Bowl. Given that putting on these games has to cost several hundred million a year, NFL games are not huge money makers for Fox, NBC and CBS. 

But look at the ESPN/ABC number, wow. 

ESPN/ABC pays $2 billion a year for the NFL and only makes $285 million back on advertising revenue. Given that you’re talking about a couple of hundred million a year to produce these games, you’re talking about ESPN losing $2 billion a year on the NFL. 

So how in the world can ESPN justify paying the NFL $2 billion a year?

The cable bundle.

ESPN makes roughly $8 a month from each of the 88 million cable and satellite subscribers it has in the country. That adds up to over $8 billion a year in revenue. The problem with the math here is that ESPN is losing millions of cable and satellite subscribers a year. This is why I continue to say that cable sports rights fees are a bubble. The Fox, NBC, and CBS payments to the NFL require some semblance of connection to economic reality — the networks have to make their payments connect somewhat to what they can make off advertising. ESPN, meanwhile, is simply handing over your cable subscriber fees to the NFL. The airing of the games themselves on ESPN costs the network nearly two billion a year. 

In fact, how much does Monday Night Football and the resulting NFL programming on ESPN cost each of ESPN’s 88 million cable and satellite subscribers a year?

$19.50!

Think about that for a minute, every single cable and satellite subscriber in the country is paying $19.50 a year, whether they watch or not, for Monday Night Football and ESPN’s NFL content. Given that average viewership for a Monday Night Football game is around 12 million, that means that the vast, vast majority of cable and satellite subscribers in this country are paying nearly $20 a year for content they never watch.

So what happens when these TV deals expire?

Well, the NFL’s money from Fox, CBS and NBC is probably safe when the next TV deal starts getting hammered out in a few years. Now the amount of money each of these networks pays might not increase as much as it has been because the networks all have to avoid losing too much money on NFL games, but the amount of money on the table isn’t going to go down when it comes to network television.

But here’s the big question that I’ve been asking for a couple of years now — can ESPN, which is losing hundreds of thousands of subscribers a month, still afford to pay $2 billion a year for Monday Night Football in the next television deal? And that leads to several more questions: Is it possible ESPN might have to shift these games to ABC in order to make a competitive bid? And if that happened would ESPN still be able to justify the $8 a month that every cable and satellite consumer pays for the network? Would the NFL take less than $2 billion if there is no other cable bidder who can approach what ESPN pays? Or could Facebook, Google, Apple, Netflix or some other large tech company decide to enter the sports business and fundamentally alter the league’s economic trajectory?

The sports rights bubble has popped when it comes to cable sports exclusivity. And as you can readily see from the above data, ESPN’s business model is much different than CBS, Fox, and NBC’s. 

With the cable bundle fraying what happens in the years ahead is by far the biggest story in sports. 

This is more a problem for cable than it is the NFL, who continues to make more and more money, and even then the problem isn’t that the broadcast companies are losing money but rather not making enough. Live sports is still something people will always pay to watch so long as sports remain a thing, cable is slipping but not dead, and the long term solution already exists in subscription streaming.

 

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3 minutes ago, SenorGato said:

This is more a problem for cable than it is the NFL, and even then the problem isn’t that they’re losing money but rather not making enough. Live sports is still something people will always pay to watch so long as sports remain a thing, cable is slipping but not dead, and the long term solution already exists in subscription streaming.

 

Only problem with the streaming model is younger people don't want to pay for anything. Heck, not even porn. They work from an assumption they should not pay for anything, and even then look for a workaround. Facebook and Google took a very long time to turn a profit, Twitter never has. 

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