When the National Football League locked out its players, it put a damper on its own NFL Network's ability to sell advertising for live regular-season games if they are played this fall.
While CBS, Fox, NBC and ESPN, with higher ratings through broader reach, all take in significantly more ad dollars for their live-game commercial time, NFL Network is not only coming off a solid 2010 season where it drew record audiences, its recent four-day coverage of the NFL Scouting Combines (Feb. 26-March 1), before the lockout, also drew record viewership.
A record 63.4 million viewers watched the NFL Network during the 2010 season, up 16 percent over the previous year, and 6.6 million watched the 2011 Combines, a 27 percent increase over the year before.
Keeping the sales momentum going, Keith Turner, senior VP, media sales and sponsorship at NFL Network, said advertising for the three-day telecast of the NFL Draft April 28-30 is pretty much sold out. Heading into the upfront, the network is in solid shape sales-wise.
Meanwhile, Turner remains cautiously upbeat. "Everyone here is optimistic there will be a full NFL season in 2011," he said. "Right now, we are expecting to sell football like we always do, sometime in June after the primetime market moves."
However, the NFL's battle with its players over distribution of $9 billion in revenue, among other issues, is clearly of much greater importance to the league's ownership than how much revenue its own fledgling network will take in for the coming season.
The lockout, which could delay the start of the season and even cost it a few early-season games, may wind up hurting the NFL Network less than the bigger NFL TV rights-holders. NFL Network's schedule of televised games does not start until November, so if early-season games get cancelled, the NFL Network loses no potential ad revenue.
Advertisers spend about $3 billion in ad revenue each year on live NFL telecasts across the five networks that carry the games. The NFL Network, which televises only 8 games, takes in the smallest such percentage.
But to dismiss the eight-year-old NFL Network as not a meaningful player in the battle to get a decent slice of that ad revenue pool would be wrong, say the media buyers who purchase ad time in NFL games for their advertiser clients.
Christine Merrifield, Senior VP, group broadcast director, MediaVest, says the NFL Network's later start of regular-season games, and its full schedule of shoulder programming, means it won't have to scramble as much as the other TV networks to come up with content to sell, should the lockout lead to game cancellations.
There also are some media buyers who believe that if and when money now targeted for NFL games begins to be reallocated, a chunk of it could go to the NFL Network's regular 24-7 football shoulder programming, including its nightly live NFL Total Access show.
"We as an agency have always supported the NFL Network," says Dave Campanelli, VP and director of national television at Horizon Media, whose NFL network clients include GEICO, Corona and Buffalo Wild Wings, among others. "It's a good way to have an association with the NFL and reach their audience at lower CPMs, and they are willing to do a lot of creative things for advertisers on their post-game show and online that you can't do with the broadcast networks."
"Their ratings are lower than the broadcast networks, but their audience is one that our advertisers need to reach," says Kevin Collins, senior VP, director of national broadcast at Initiative, where clients MillerCoors, Hyundai, Lionsgate and Nikon are NFL Network advertisers.
Despite all the concerns about the fate of the season, there is still time for the situation to right itself. Arguments in a federal lawsuit by 10 NFL players requesting that the courts end the lockout will be heard April 6. And the judge can end the lockout or order both sides back to the bargaining table.
The problem buyers face is that if they wait too long to take their NFL-allocated money elsewhere, they could be shut out, or see sky-high last-minute prices to get into postseason Major League Baseball or college football telecasts.
Peter Gardiner, chief media officer at Deutsch, says his agency is "protecting as much money as we can for the NFL," adding that the NFL Network will get a share of that money. "The NFL Network's bedrock is the live game telecasts, but they have also done a good job of building other programming, and it will still be a valuable way to reach hardcore fans."