Has the NFL Finally Over-Saturated its Viewers?

Thursday NIght Football on CBSThe NFL wants you to watch it. And they want you to watch a lot of it. This season alone, the NFL released two new products.

The first being “NFL Now,” a new online and mobile app video service that allows fans of the NFL to get all types of video directly from the NFL. It also has a $1.99/month premium service, which gives subscribers access to archival footage from NFL Films, ad-free viewing, and “exclusive” game day highlights (which really aren’t that exclusive, because it’s not as if they can show anything that CBS, Fox, NBC or ESPN can’t). All together, this is a very interesting foray into the world of digital for the NFL, and one that I think they executed very well given its seemingly well-thought out user experience.

The second product the NFL released is not so much a product, but it is very popular and very profitable.

As most of you know, Thursday Night Football will kickoff on CBS this week, representing the first time that Thursday Night Football would air on broadcast TV in the middle of a season. This is obviously huge for CBS, as it assures itself victory on Thursday nights. And clearly this is a major win for the NFL, who on top of drumming up an extra $275 million out of its behind, also got CBS to agree to a deal in which the NFL Network is allowed to simulcast the game, and CBS will pay for all of the NFL Network’s production costs–even for the 8 Thursday night games that CBS does not get.

No matter what the exact rating number is for Thursday nights, the $275 million investment will be worth it to CBS. Even if they technically lose money on the deal (which is not impossible given that it has been reported that they missed out on getting the $600,000 per commercial they were seeking), they still can use their NFL programming to promote existing and new TV shows in front of what will undoubtedly be the largest audience of TV viewers on Thursday night.

That said, the NFL’s negotiating power would be sunk if its programming were merely loss-leaders for the networks. Sure, ESPN’s John Skipper said at the Code Media Conference in New York last week that he doesn’t think the NFL is overvalued, despite the fact that his network pays twice as much per year for NFL rights for only half the viewership: math that equates to them paying 4 times as much per viewer. Yet that doesn’t mean ESPN, CBS, NBC or Fox wouldn’t bring up the fact that their ratings are declining in the next round of negotiations.

According to Nielsen, the average number of viewers tuned into an NFL football telecast peaked in 2010 at 17.9 million viewers. After a couple years of dropping, the NFL bounced back last year, averaging 17.4 million viewers per telecast in 2013. If that upward trend turns out to be less of a trend and more of blip, then what next for the NFL? This current deal with CBS is only a one-year trial run, that could be DOA if things don’t go well this Thursday. The former NFL President, Neil Austria, expressed concern about the possible over-saturation that this deal could cause, saying, “You run the risk that the guy who got one piece of the slice that he didn’t pay a whole lot for is getting more [viewers] than the network paying a lot of money. That may change the negotiating strategy the next time around.” Which is to say, there’s a chance that this steep price CBS is paying turns out to make the deal entirely unattractive in comparison to ESPN’s deal, causing the networks to backlash.

Mark Cuban, owner of the NBA’s Dallas Mavericks, thinks not networks, but fans will be the ones providing the backlash. “They’re trying to take over every night of TV,” he said. “It’s all football. At some point, the people get sick of it.”

“I think the NFL is 10 years away from an implosion,” Cuban went on. “I’m just telling you: Pigs get fat, hogs get slaughtered. And they’re getting hoggy…Just watch. Pigs get fat, hogs get slaughtered. When you try to take it too far, people turn the other way. I’m just telling you, when you’ve got a good thing and you get greedy, it always, always, always, always, always turns on you. That’s rule No. 1 of business.”

While Cuban’s apparent anger with the NFL’s decision to broadcast on Thursday nights probably has something to do with the sports behemoth stepping on the toes of the NBA, which has long used Thursday nights as one of their premiere slots for primetime programming, he does have a point. Because as the ratings I alluded to before suggest, the NFL can’t grow forever.

Last season’s somewhat return to grace was due in part to some unique story lines that have now dissipated. That’s why Sunday night football was down 9% in its opener on NBC, as trying to drum up the “Manning v. Luck” strory-line didn’t work the second time around. Then there was the season kickoff game, which was also down 0.1 rating points from last year. And ESPN’s Monday Night Football, due in part to less popular teams, was off 21% from last year’s opener.

Trends like that don’t suggest the NFL is a never-ending growth machine. At some point, the growth will stop, as it does with every media entity and brand out there. But it’s positioning oneself so that when that happens, not everything falls a part. And I think the NFL has done that positioning to this point. Their investment in their own pay-TV network and NFL Now set them up for cable and digital growth that they can control. And this Thursday Night Football experiment on broadcast TV is just that–an experiment. If it fails miserably and viewership, on average, declines as a result of it, they’ll take it away. If Thursdays are a remarkable success, they’ll make CBS pay billions for a long-term deal.

I guess we don’t know whether the NFL has over-saturated its fans with ubiquitous football, but with Thursday night’s ratings report, we’ll begin to find out. And while I don’t see the implosion that Mark Cuban sees coming, I do see a cause for concern. Once upon a time, American Idol was also considered one of those forever entertainment brands. Now it finds itself reducing its programming and fighting to stay relevant and on the air.

The NFL has a built in fan base that will forever prevent it from becoming irrelevant, but if fans get too much of it, the same way they get too much basketball and baseball, perhaps this ever-growing, forever-profitable, ratings-churning machine that is the NFL will lose ratings, and thus their negotiating leverage and revenue growth to go with it. That’s not quite an implosion, but for the 32 owners of the NFL, it’s about as terrifying a picture as they could imagine.

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