Super Bowl Reflections: How the NFL Might Boost Profits to $105 Million
We are at that time of the year when Superhype of the Super Bowl forms over the communications media.
More than a professional sports event, it is viewed by large corporations as an occasion to peddle their influence. Celebrities, politicians and promoters adorn the glistening, well-lubricated pre-game parties underwritten by companies. Television advertising goes for more than $150,000 per minute. Scalping and bootlegging tickets has become a sub-economy of sorts. All in all, big bucks are involved.
But, in the future plans of Pete Rozelle and the National Football League planners, only the surface has been scratched. Having succeeded in fairly filling their stadiums, the NFL entrepreneurs are looking hungrily at the tens of millions of fans who are watching their games without directly paying to the NFL. The billions of dollars that fans pay indirectly in transferred advertising costs go the advertisers, not to the football team owners.
Presently, the NFL receives about $4 million for television rights to the Super Bowl. Let’s say that 70 million people actually watch the game (the often-cited 100 million figure is simply puffery). That comes down to about 6 cents per viewer, which goes to the NFL. Rozelle and company know that millions of fans will pay far more than 6 cents to see the Super Bowl, or any other NFL game for that matter.
The challenge, for the NFL, then, is to figure out how to charge these fans $3 or more for the game. Why, even if half of the usual television audience, confronted with pay TV or not seeing the game, were willing to pay the fare, the bonanza would jack the profits and value of an NFL franchise sky high. Instead of $4 million in television rights to the Super Bowl, there would be a gross of $105 million from that game alone.
As cable and other pay TV systems become more widely available and as large-screen closed circuit systems reach thousands of bars, restaurants and clubs, the opportunity to charge each viewer becomes more realistic. And just think, no commerials, at least in the beginning. The 1980s will present such a time for decision to the NFL owners.
The advertisers will not like being shut out of such an immense audience. They want to maximize their sales of deodorants, cars and shaving equipment. But, the NFL wants to maximize its revenues, too.
What of the fan’s viewpoint? At first blush, fans would be outraged at being charged for seeing the games from their living rooms or local taverns. But are they really paying less than what they are paying indirectly for millions in advertisements that are cranked into the price of the goods they buy in the stores down the street?
The answer to such a question would depend on the amount fans are charged to see the games, and other factors. For example, suppose some fans don’t buy the products that are so expensively advertised. Are they still paying indirectly for these ads, or perhaps paying in even more circuitous ways devised by corporate or conglomerate pricing formulas?
On the other side, the argument can be made that only people who want to look at the game should pay. And what advertising cost transfers do is to spread the costs to all consumers, non-fans and fans alike. The dilemma may be resolved in a way to delight both the NFL and the advertisers.
After weaning the fans to pay TV by giving them no alternative and by saying that at least they won’t have to bother with the ads, the NFL planners may change the rules and get the best of all possible worlds–pay TV with ads.
All this should be enough to get some fans thinking instead of just watching. In the process they may learn about television–who writes the rules and who raises the ante. Keeping their sense of humor for perspective, fans should assert some old-fashioned consumer rights to protect their choices and their dollars.
Those fans interested enough to send a self-addressed, stamped, large envelope to P.O. Box 19312, Washington, D.C. 20036, will receive a copy of the fan’s Bill of Rights.