January 31, 2020 / 6:33 PM / a month ago

Breakingviews - NFL ratings spike cuts both ways for TV networks

General overall view of the NFL Shield logo and helmets at the NFL Experience at the Miami Beach Convention Center in Miami, Florida, Jan 27, 2020. Kirby Lee-USA TODAY Sports

NEW YORK (Reuters Breakingviews) - Baltimore Ravens quarterback Lamar Jackson said he doesn’t plan on watching Sunday’s Super Bowl championship game. That won’t stop what may well be 100 million Americans tuning in to see the matchup between the San Francisco 49ers and the Kansas City Chiefs.

Indeed, more people have been watching of late. Ratings for televised National Football League games spiked 5% this season, bouncing back from the lows suffered after the controversy surrounding players’ approach to the national anthem. New breakout stars like Jackson and Kansas City Chiefs quarterback Patrick Mahomes probably helped with that. This is good and bad news for television broadcasters.

NFL games pulled in an average of 16.7 million viewers during the regular season on television or in digital format, the most since 2016. And league games made up 47 of the top 50 telecasts for the season, which runs from September to the end of December. Sure, viewership is still well below the 2015 level, but it’s moving in the right direction.

Fewer off-the-field ructions are part of the reason. In 2016 San Francisco’s Colin Kaepernick started “taking a knee” to protest racial discrimination as “The Star-Spangled Banner” played at the start of games. Other players joined him, and President Donald Trump eventually weighed in to object. Ratings plummeted – just when the NFL was already reeling from the concussion scandal.

Thanks to a new generation of stars, the game is reenergized. Twenty-four-year-old Mahomes just knocked the New England Patriots’ 42-year-old quarterback Tom Brady off the top spot of the list of players whose merchandise is generating the most dollars, according to the licensing and marketing arm of the NFL Players Association.

This presents a dilemma for networks like CBS, Fox, Comcast’s NBC and Walt Disney’s ESPN. They benefit from the ratings uptick because they can charge more for advertising. Fox is pocketing up to $5.6 million for a 30-second commercial this weekend. It also helps retain viewers who may otherwise consider joining many others who have cut the cord.

But the resurgence works in the league’s favor, too. The rights to air the games will soon be up for grabs for many networks. ESPN’s contract with the NFL is set to expire next year. The sports cable network is already shelling out an eye-popping $1.9 billion, according to MofftettNathanson. The game on the field won’t be the only battle heating up this weekend.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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