McAdams On: Football
10/2/2009 1:06:11 PM
We’ve already seen what happens to the broadcast
TV business when its primary cash cow gives out. The demise of the auto
industry slashed broadcast ad revenues by 25 percent. Stations circled the
wagons, laying off staff left and right, cutting costs, combining operations
with competitors across town.
Finally, there were a few signals this week that suggesting the worst was over.
New Vision Television exited bankruptcy debt-free, and two more broadcast
groups--Gray and Entravision, came back into compliance with the New York Stock
Exchange. Moody’s deemed the broadcast TV segment “stable,” and Wells Fargo
raved about CBS after the company had taken a pummeling from Wall Street all
The hope now is just to get through the rest of the year without any more blood
loss. The market is already braced for the absence of political ad revenues and
the Olympics bonanza. The football effect is another story. National Football
League games yield some of the highest ratings and related revenues for
networks and local TV stations. The networks, and by association, the stations,
pay dearly for the rights to broadcast the games, but the upside includes
higher ratings for lead-ins and post-game programming.
Clearly, football is good for broadcasting, and the business could use a ray of
sunshine right about now. But football depend mostly on ticket sales, and
ticket sales depend on people who have jobs to pay for them. There are fewer
such folks around these days. Ticket sales are down. As many as 10 teams aren’t
sold out, meaning more local broadcast black-outs, meaning less revenue for
The ultimate effect of NFL black-outs remains to be seen. It may not be
substantial, but it won’t take a huge hit to have an impact on some stations.
Many are clawing their way back from leveraged, DTV capital upgrades, the
related fixed expenses of running two facilities for so long, and then losing
one of their biggest sources of revenue just as those bills come due. It might
be a good time to implore PBS member stations to replace those coffee mug with