News

Tagliabue Eyes Network for Games

2/06/2005 3:56 PM Eastern

Talk of a new national sports service resurfaced during National Football League Commissioner Paul Tagliabue’s state of the league address Friday during a pre-Super Bowl press conference in Jacksonville, Fla.

“We’re giving very serious consideration to being part of the launch of another major sports network on cable and satellite television,” Tagliabue said. “We’re also talking to other television networks and companies about the packages we have to sell, including the Thursday night/Saturday package we’re creating. And there’s strong interest in other companies, some of whom already have contracts with us and some who don’t.”

Tagliabue declined to elaborate during his remarks. However, Fox has expressed interest in going this route, while previous reports indicated that Comcast Corp. might also be interested in pursuing such a service.

Last year, News Corp. leader Rupert Murdoch said at an industry conference that he’d love to launch an ESPN competitor, but couched that desire with the need to acquire more sports programming — particularly National Football League games — to make any such launch viable.

During a Feb. 2 conference call discussing News Corp.’s second fiscal quarter earnings, Murdoch said that wouldn’t happen without a significant NFL game presence.

“Will we be taking on ESPN? We would not do that without a pretty full NFL franchise,” Murdoch said.

Comcast officials could not be immediately reached for comment.

Some view Tagliabue’s new-network comments as a play to get ABC Sports and ESPN to conclude their current rights fees negotiations. Although he said The Walt Disney Co. properties “have tremendous interest in staying with the NFL, both on cable television and broadcast television. We have an interest in them staying with us. We have a disagreement about what the rights fees should be.”

The parties have met on a number of occasions — most recently last Wednesday in New York — to discuss the rights extensions. Following major price hikes for last fall’s renewals of DirecTV Inc.’s out-of-market “NFL Sunday Ticket” package, Fox’s Sunday afternoon NFC package and CBS’s AFC slate last fall, the NFL, according to published reports, is asking for some $900 million and well over $600 million annually for its current Sunday (ESPN) and Monday (ABC) night packages.

While ESPN’s dual revenue stream of advertising and cable subscriber fees putatively enables it to turn a profit on the deal, ABC is said to be losing $150 million to $200 million per year on its present $550 million Monday Night Football allocation. Speculation persists that the Disney networks might switch nights.

An ESPN spokesman issued the following statement: “We will continue to have conversations with the league about renewing the ABC and ESPN rights.”

Failing contract consummation, Fox or NBC might be willing to step in. Disney’s exclusive negotiating window with the league, though, doesn’t end until October, something that News chief operating officer said renders such speculation moot — at this juncture.

“We don’t even have the right to bid against them until they end the formal negotiating period. So, there’s really nothing to say about a sports channel,” he said on the aforementioned earnings call.

In November, DirecTV signed a five-year, $3.5 billion (a 75% jump) NFL Sunday Ticket renewal covering the 2006-2010 seasons, which again shuts cable out from offering that attractive package. To secure the NFC package, Fox paid 30% more per year over current rates to $712.5 million for each of six years through the 2011 season.

CBS increased its outlay 25% to $622.5 million annually over the same span.

The league’s contract with the broadcast carriers, like its pacts with ESPN and ABC, were set to expire after the 2005-06 season.

As for the new late-season primetime package of Thursday/Saturday games the league is proposing, NBC/USA Network, Fox, Turner Network Television and NFL Network are all said to have interest.

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