NFL Network’s Desperation is Starting to Smell a Little Bit

But the cable companies haven’t responded like a meek, beaten left tackle, which brings us to the dangerous flip side for the NFL: If Comcast, Time Warner etc. don’t suddenly see the light and cave in the next nine days, the NFL Network’s negotiating power is gone. Poof. Kaput. Probably forever. If fans have been so blase about this “raging controversy” for two years, are they suddenly going to go bonkers in Year 3? Besides, public opinion has formed squarely against the NFL because people have noticed that up until two years ago, these access issues simply didn’t exist, and now they do, and no matter how many times the NFL says it’s all for you the fan, people can see it’s all geared toward building their multibillion-dollar network. 

They’ve succeeded where I thought it was impossible: They’ve made the cable companies look something less than pure evil.

It’s already debatable how many fans even want the channel for those eight regular-season games. For the off-season and the other programming? Even the NFL has learned most fans don’t care that much, I think. That’s why there wasn’t a peep of publicity about this leading into the draft or the regular-season, only around the Thanksgiving return of the great Bryant Gumbel. Their P.R. strategy has basically confirmed what the cable companies have been saying all along — the NFL Network general-interest programming eight days a year and niche the other 357.

Also, the legal and congressional avenues are drying up, and on Wednesday two senators threatened to revoke the league’s antitrust exemption if they keep holding these games out. Thursday, the NFL responded with an arbitration offer to Time Warner so ridiculous and self-serving that I imagine the folks at Time Warner are getting a good chuckle over it. (In fact, the Associated Press already has quoted a rep saying the company has no interest in arbitration.) I’ll paste Roger Goodell’s plea below — sent out by the NFL Network’s publicity arm too – then comment: 

In an effort to end the NFL Network’s carriage dispute with Time Warner as quickly as possible so that our fans and your customers are able to watch our network – including the December 29 Patriots-Giants game – I am now reaching out to you directly with a new and specific proposal to resolve our impasse in a way that will put the interests of our fans, and your customers, first – and do so in time for the December 29 game.

I have attached a term sheet for a binding final-offer, “baseball style” arbitration process into which NFL is prepared immediately to enter with Time Warner.  The objective is to have a neutral third party determine the price and tier for NFL Network distribution on Time Warner systems, based on the fair market value of the NFL Network program service.    

Because we recognize that final-offer arbitration pursuant to the attached proposal will take time, we will allow you to provide NFL Network to all Time Warner customers immediately upon your written agreement to participate in the arbitration process and to be bound by its result. 

You should know, Glenn, that we do not view this proposal as a way to “force” NFL Network carriage “on our terms.”  We view it as a way to make sure that your customers can view our programming on fair terms – which the arbitrator could decide are those proposed by us, or those that Time Warner proposes.  Either way, however, consumers – including our fans – will be the winners.

We are prepared to leave this arbitration offer open through December 28.  I will be available to discuss it at your earliest convenience; my office has standing instructions to get a hold of me whenever you call. 

Oh, where to begin … let’s go with the “baseball style” arbitration line. If Bud Selig and crew had a time machine, the first thing they would do is go back three decades and remove any mention of that dastardly device of artificially increasing salaries. I quote the A’s Mike Norris after he lost his case: “No problem. I was either going to wake up rich or richer.”

This arbitration thing has been the proposal the NFL has been floating all along and had been hoping to get from the FCC, until that group decided the cable lobby is more important than the NFL lobby. One thing I’ve never seen answered is what would be the incentive for the cable companies to let someone else make a business decision for them? Simply because the NFL wants them to?

To put it in baseball terms, think of it this way: The NFL is Ryan Howard and the cable companies are the Philadelphia Phillies. Ryan Howard won the MVP award in his second season. The Phillies renewed his contract this year for $900,000 based on the collective bargaining agreement. If Ryan Howard were the NFL, I suppose he would have requested that the Phillies forget about the existing terms and willingly enter into arbitration to determine his fair market value, even though they’re under no obligation to do so and it might cost them an extra $10 million a year. Sounds like a plan!

This whole thing really has not been Goodell’s finest hour, and he should just turn the whole issue over to Jerry Jones, who heads up the committee and has at least brought a brazen honesty to the proceedings. On a conference call before Thanksgiving, he was … well, let’s say it’s a good thing it wasn’t televised. He was obviously reading from a set of talking points. He had no good answers to any questions, such as whether the residents of Texas and Wisconsin had ever been deprived of the Cowboys and Packers prior to the NFL Network’s existence. Most amusingly, he tried to cast the NFL in the same downtrodden light as “pleaded for government intervention to help the poor persecuted NFL. I don’t recall government intervention being such a grandly welcomed idea in NFL offices when the USFL was trying to get off the ground, but maybe I just missed something.

Goodell also said the fact that the Cowboys were on the NFL Network twice this season was purely coincidental. Then Jones, a week later, said that was no accident, that the league is looking to promote teams with large statewide or national followings that can pressure the NFL. Which means one of them wasn’t telling the truth. And when Jerry Jones wants you to know something, he wastes very little time masking his intentions. 

I know it’s a difficult concept to consider. But companies make bad strategic decisions all the time based on miscalculations of their product’s appeal. It might be as simple as, that’s what the NFL has done.

http://www.mercextra.com/blogs/buzz/2007/12/20/nfl-networks-desperation-is-starting-to-smell-a-little-bit/