Monday Money Matters

From all of us here at the National Football Post, we want to wish you a safe and happy Memorial Day and cherish the efforts and sacrifices of those protecting our freedom everywhere. In thinking of them, I recall a quote from Winston Churchill, a favorite of my colleague Michael Lombardi:

“It’s not enough that we do our best; sometimes we have to do what’s required.”

On to Monday Money Matters. The NFL allowing teams to open sponsorship categories involving state lotteries (and potentially liquor deals to come) is another sign of the times. No longer can the league stand on principle against the unspoken connotation of lotteries – the “G” word (gambling) – in denying teams the right to secure a new stream of revenue from these potential sources. Opening up the category of lotteries gives teams another place to look to guard against the projected drop in future revenues, as sponsorship budgets for the coming year – or lack thereof -- are being set now. The Patriots and Redskins – two of the most proactive teams in sponsorship sales -- have already jumped on board and set market rates with their state lottery boards, while the Jets, Giants, Ravens, Lions, Titans and Vikings are in similar discussions.

The issue of gaming connotations with sponsorships is not new. At the Packers, we had strong relationships with the Oneida Tribe (on whose land I still own a home) as they were one of the four gate-naming rights partners (the Packers will never – although I should never say never -- sell the naming rights to Lambeau Field). The Oneidas are also owners of several casinos around Green Bay and Wisconsin bearing their name. The Packers were long allowed to have this sponsorship, with reluctant acceptance by the league. …

Beyond opening up those sponsorship categories, last week was perhaps as good a week as the NFL could have in this economy, as a good chunk of the broadcast side of the business has fallen into place for the future. Deals were struck with three important and gold standard partners – Comcast, CBS, and Fox – with perhaps more to come.

Brian Roberts of Comcast and Roger Goodell of the NFL became personally involved to overcome years of stubbornness, rhetoric and posturing on both sides as an agreement was reached for Comcast to provide NFL Network to a larger base of subscribers at a much more reasonable rate than the NFL had been previously demanding.

As with any negotiation, it was more about building relationships than numbers crunching in order to solve the issues. These negotiations had become stale and at impasse, so a new group of negotiators became involved: Goodell, Roberts and their CFOS – Anthony Noto of the NFL and Mike Angelakis of Comcast. The freeze of negotiations was also melted by a personal visit from owners Jerry Jones and Robert Kraft to the Comcast offices in Philadelphia earlier in the year. Finally, the deal between the NFL and Comcast is done. Look for Time Warner to be the next target in the NFL Network’s crusade for carriage.

With the Sunday Night package still outstanding after NBC’s rights expire in a couple of years, having Comcast as a partner can only be beneficial, even if for leverage purposes only.

Further, the NFL extended its AFC and NFC packages with CBS and Fox for two additional years. Although the increases in the rights fees were modest, any increases in this economy – especially at the mega-numbers we are talking about with these deals – is impressive. Moreover, like the earlier Direct TV deal, the money is largely guaranteed even in the event of a lockout in 2011, a development that is more significant than we may know.

With the bulk of the broadcast negotiations now out of the way, the NFL can focus on the remaining critical issue for the future: labor. NFLPA boss DeMaurice Smith addressed the NFL ownership at the meetings in Florida last week and, although there was nothing substantive from his address, the fact he was face-to-face with that group is only positive.

Smith appears to be proactive in his media and team appearances. Now the focus will be to see when he is proactive in jump-starting negotiations on a new Collective Bargaining Agreement. At stake is football without a Cap in 2010 and football at all in 2011. …

Enjoy your holiday.

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