NFL Costs More Than Related Revenues

NEW YORK: Professional football is among the most-watched programming on television. Games often drive development in broadcast technology, from cameras to displays. Football games represented the first programming to be telecast in hi-def and in 3D. The events bring in billions in advertising revenues, but the steep cost of the rights appear to exceed the return on investment.

That’s the conclusion of “So Networks Make or Lose Money Broadcasting the NFL,” at The Biz of Football. BoF reported that the NFL generated more than $2.6 billion in ad revenue last year. However, the combined annual rights fees for CBS, Fox, NBC and ESPN was more than $3 billion. The slack is said to be made up in the programming around the games.

“This season should be an interesting look inside television advertisement budgets as a whole for the industry as belt tightening, due to the recession, have hit some sectors hard,” the article said. “How that impacts the NFL is uncertain, but it’s very possible that TV ad dollars will be down for 2009, especially with the government running General Motors, having the highest regular season advertising total, and second overall to only A-B InBev which spent heavily on the Super Bowl.”

CBS has the next Super Bowl. Reports emerged last week that the network’s ad inventory for the game was 70 percent sold out. This time last year, NBC had sold 80 percent if its inventory, commanding $3 million for a 30-second spot. Crain Business said CBS’s top prices are “between $2.5 million and $3 million.”