Tech startups are stridently warned these days not to become too dependent on giant online platforms such as Google and Facebook. Your page or video views might be sky-high right now, but if your business model can be undone with the mere tweak of an algorithm, you don't really have much of a business.
This paradigm, at least in some sense, applies to the broader U.S. television business' increasing reliance on NFL programming. This is a case of hating the player, not the platform.
With business models for pay-TV companies, broadcast and cable networks and even wireless giants now underpinned by huge ad sales and subscription revenue from pro football broadcasts, and with these companies paying the National Football League billions of dollars in licensing rights each year, it has to be disconcerting to top media executives when they see some of the headlines the NFL is making these days beyond SportsCenter.
None of this is to say that the most powerful sports league on earth is as shaky as a Dallas Cowboys goal-line stand, ready to give at any moment. We're talking about an enterprise so powerful, the $49 billion merger between AT&T and DirecTV depended on the latter's renewing its NFL Sunday Ticket broadcast deal at the astoundingly high price of around $1.4 billion a season. Separately, NFL football just single-handedly ended DirecTV's nasty broadcast-retransmission impasse with Raycom Media, with the luming spector of consumers--gasp!--missing opening-weekend games if a deal didn't get done.
As one of the precious few programming assets left that draws audiences of 20 million people or more to a singular live-television event, football has achieved outsized influence, a catalyst that gets media deals moving and made.
But there have been enough foundational issues in regard to pro football lately to make you wonder if its underpinnings are capable, in the long term, of supporting so much ever-growing cultural weight. Like everything else that gets enormously powerful, NFL football is subject to entropy.
What would happen if, say, the egregious mishandling of a player domestic-violence issue were to destroy the reputation of top league executives, undermining the league's soaring popularity with women? What would happen to the long-term popularity of football in general if legions of retired players began to show significant brain damage caused by playing the game? What if the growing concerns of parents about the long-term health impacts of football steered future generations away from playing the game? What would happen if, collectively, all these issues were to begin erroding the popularity of pro football in America?
And might media companies like DirecTV, Disney and Verizon be left holding the bag, paying billions for a suddenly devalued asset, and—perhaps worse—having not developed an alternative live-programming source capable of producing the increasingly rare feat of drawing massive audiences and premiere sponsors to live television?
As I flipped around the AM sports-talk radio spectrum during a Monday night drive to the airport, the discussion wasn't focused on the ongoing, hard-fought game between the Arizona Cardinals and San Diego Chargers, but rather the resurgent scandal involving a shocking hotel-elevator video of running back Ray Rice savagely beating his fiancé.
Substitute TMZ for the Washington Post and NFL commissioner Roger Goodell for Richard Nixon, and you had a scandal that felt like Watergate. As I listened, I had several questions: How long did Goodell know about this horrific video? And what will happen if the tabloid makes good on its promise to expose Goodell the following day? Could this scandal grow to end the popularity of the NFL as we know it?
Probably not. The massive popularity of the NFL can't be stopped by any one player scandal, no matter how ugly, or even a powerful algorithm.
But if I'm, say, the chairman of DirecTV, I'm keeping a close eye on the scoreboard over the next few years before the NFL jacks up my rate again during the next round of talks.--Dan