October 25th, 2007

The day when the NFL’s greed reaches the tipping point

Posted in  Technology 
Author: Tom Giovanetti || Location: Lewisville, Texas, USA

American football is the coolest sport in the world. I'm a big Dallas Cowboys fan. But America's professional football league, the National Football League (NFL), has to be the greediest league of any major sport.

The NFL's greed leads them to things like speculating about holding a Super Bowl in China, depriving Americans of their championship game in order to try to crack a new market. That's long into the future.

But the NFL's greed will reach the tipping point this year, on November 29th, when the Green Bay Packers visit the Dallas Cowboys for one of the more anticipated games of the season, and more than half of Americans won't be able to watch the game.

That's because more than half of Americans don't get the new NFL Network. (I DO get the NFL Network, by the way, as part of my Dish Network subscription. So this blog entry is not a personal gripe)

Not too long ago, pretty much every NFL game was available through the broadcast networks. Then, some of the games moved to ESPN, which wasn't a huge problem for football fans since ESPN is part of every video provider's basic package or basic tier of programming. So no big problem.

But soon the greed of the NFL led them to create their own network, to reserve programming (games) for its own network, to demand that video providers pay them more money for the NFL Network games, but also to demand that the NFL Network be carried as part of the video provider's basic tier of programming.

In other words, the NFL Network wants to create a new revenue stream which will be entirely subsidized by the video providers.

The video providers, of course, have responded rationally by telling the NFL that they are happy to carry the NFL's new sports network by including it in a sports tier of programming, for which consumers who value the programming would pay a little extra for it each month. This is the rational thing to do. If you want to create a new revenue stream, there has to be some source for this new revenue other than to just expect the video providers to absorb the costs.

We've commented on this before. The point here is not to say that the NFL is wrong to create a new network. The games are their property. They can do with them what they wish.

The point is also to not argue that such networks ought (or ought not) to be part of a sports tier--these are not policy issues, they are simply hard-nosed negotiations between private companies.

What's important here is that no one decide that somehow they have a "right" to anything involved here, and to then turn to government to protect their supposed right. The NFL Network does NOT have a "right" to be in the video provider's basic tier. They also do not have a right to the eyeballs of video consumers.

And consumers don't have a "right" to see the games, either.

So there are no policy issues involved here, other than that these disagreements need to be worked out among the companies themselves without resorting to government intervention.

But consumers need to understand the real issue, and should not be fooled by all of the advertising urging them to call their video provider and demand that they carry the NFL Network, or one of the other new sports networks.

If anyone is to blame for sports fans not being able to see a game, it's not the video provider, who is essentially being squeezed. It's the NFL, who has taken the content off the table, and is expecting to be paid additional fees for content that was once widely available.

This trend for sports leagues to take programming off the table, create their own network, and then demand that video providers pay them extra for the new network but not charge their customers extra is spreading. We now have several college leagues doing the same thing, like the Big Ten Network. I even heard a commercial on the radio this morning from the Mountain West Network, asking people to call Dish Network and demand that they carry the Mountain West Network.

Consumers need to be wise to what is going on. When sports programming is taken away from you by the league, or by the college conference, and repackaged into a new network so that the league or conference can create a new stream of revenue, don't get mad at the video provider. Don't get mad at Dish Network, or TimeWarner Cable. Get mad at the league, or the conference.

When you can't see one of the better football games of the season, the Packers against the Cowboys, get mad at the NFL, not at your video provider. It's the NFL that took the game away from you and put it on their own network.