Powerhouse NFL Keeps Tight Control of Digital Rights As Other Leagues Take More Open Approach

By The Myers Report Archives
Cover image for  article: Powerhouse NFL Keeps Tight Control of Digital Rights As Other Leagues Take More Open Approach

Interviews with: NFL's Glenn Adamo and Seth Polansky; CSTV's Brian Bedol; Ray Warren; E.J. Narcise

At a recent media breakfast, an editor of the popular AOL Fanhouse blog asked NFL VP of media relations Glenn Adamo why the league doesn't release more of its video for reporters like Stephanie Stradley. Stradley and other bloggers and sports journalists are livid about a rule instituted before this season that keeps non-NFL media properties from showing more than 45 seconds of video on Web sites and requiring it be pulled down within 24 hours. "How is monopolizing this sort of news ever good for fans?" Stradley wrote on the blog in an open letter to NFL commissioner Roger Goodell. "The types of stories that the NFL wants to highlight may not be the same ones that interest media and fans."

The common wisdom these days is that to grow your brand you have to let it spread organically on a thousand platforms, let content reach every user possible everywhere they want it. But that tactic can conflict with a meticulously crafted rights strategy that brings in billions of dollars. The NFL gets two-thirds of its revenues, some $4 billion, from the sale of media rights to networks such as CBS, NBC, Fox, ESPN and DirecTV. The league is holding onto its digital rights, re-launching NFL.com this August as a league property after licensing it for 11 years to ESPN, then CBS. Adamo told the AOL editor, John Ness, that for more coverage fans could go to the NFL's site. Even as broadcast TV audiences shrink and move to cable, as new nights of football and outlets are added, fans want more access - from video on demand to fantasy leagues sustained by a surfeit of statistics. "There's a difference between simply selling sports rights, and strategically selling sports rights that allow you to position your sport for maximum distribution, maximum eyeballs and continue to create maximum demand," Adamo later told Jack MyersMedia Business Report in an exclusive interview.

The NBA, Major League Baseball and the NHL take a less restrictive approach, allowing use of much more non-game video than the NFL. Smaller leagues sometimes work out revenue-sharing or barter arrangements with TV stations or networks, rather than requiring rights fees. Some teams even pay to get their coach or player interview shows on the air in hopes the promotion will raise their profile in the local market. "Whatever the rights fee is it's almost irrelevant," says E.J. Narcise, a principal at Team Services LLC, a subsidiary of Learfield Communications, which owns the rights to many top college teams. "What they really truly need is the promotional partnership [without which] they cannot possibly get enough coverage or enough promotion."

College teams and leagues go even farther for exposure. "The complexity of college rights is what allowed CSTV to exist," Brian Bedol,founder, president and CEO of the CBS-owned college sports network,told Jack MyersMedia Business Report in an exclusive interview. Bedol's company telecasts everything from football to water polo and wrestling on TV or online, either pay-per-view or ad-supported. Sometimes CSTV pays for rights, sometimes gets them for free. Some schools even pay CSTV tens of thousands of dollars to produce their games. The schools benefit by keeping alumni donors impassioned and by introducing the school to prospective new students. And Bedol doesn't worry about protecting CSTV's rights from fans who shoot their own video. He hires them. "If they're doing it free, why wouldn’t they shoot it for us for $100?" he says.

For their part, the big leagues may not have to worry, at least today, about damage from restricting bloggers or local news sites, where many of the most-viewed stories are about pro sports. If a Yankees game on the YES network has half a million viewers, what's the real risk, asks industry consultant Ray Warren, a former Carat executive with nearly three decades in sports marketing, of keeping bloggers from grabbing the video. The bloggers and their readers won't stop watching, and even if they do, "do the ratings actually go down?" Warren asks. Not likely.

"We believe in protecting our brand," NFL Networks spokesmanSeth Polanskytold Jack MyersMedia Business Report. "That's really what this is about to us: to make sure it does not become a commodity that is meaningless." The NFL may be in a unique position, with the most popular U.S. sport that, unlike music or entertainment, has a scarcity of content - just 268 games per year. Its audiences prefer watching games live, which avoids the TiVo ad-avoidance effect. Nevertheless, it is conceivable that allowing bloggers and others access could over time make incremental advertising and other dollars grow, creating one more important revenue stream. Right now, that's a risk the league is not willing to take with its rights, known to NFL Networks staffers as "mother's milk." Keeping that milk flowing in a networked digital media world will take keen focus and stern policing - and fans who remain loyal through not only strikes and player misbehavior, but also any media restrictions on their access.

Dorian Benkoil, a regular contributor toJack Myers Media Business Report, can be reached at dorian@jackmyers.com.

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