You may remember from a few months ago that both the NFL Players Association and the NBA Players Association had organized labor strikes this season, disrupting the NFL’s typical pre-season practice regimen and truncating the NBA season. What you may not know is that the networks were on the hook to pay the broadcast licensing fees to the leagues even if negotiations between the leagues and players associations broke down and they couldn’t work out a deal.
That’s right, on those big time $4.3 billion network carriage fee deals (which go to $7 billion in 2014), the networks had to pay the leagues even if their employees (players) didn’t show up for work!
Are the networks overpaying? Doubt it. Twenty-three of the top 25 broadcasts this past fall were NFL games and one of three people watching TV this past Sunday were watching the NFL playoffs, and Tim Tebow wasn’t even in any of the games. Those viewers weren’t watching the network, they were watching the game and the players. (The “content.”)
So do the networks have any power? Of course they do. They call the shots when they take risk on distribution of unknown content, which has license fees that at the very least equate to the production and development costs.
But what if you can’t get one of the executives giving “green lights” to say yes to your content? Is content still king?
PS. If you think content is king only for big time brands like the NFL and NBA, read my blog post “Bootstrapping Your Content.”