16 vs 18

18to88 reader Rob Cullin (Westside Rob) checks in with an innovative plan to solve the NFL revenue problem without expanding the schedule to 18 games.  I felt like it deserved a full airing here.

 

For a long time I really wanted to see the NFL expand to 18 games.  As a person that these days really only follows NFL football and no other sports, I’ve wanted more.  It’s natural to want more of what you love.  However, as we all know getting what you want isn’t always what’s best for you and for others.

In light of that I’ve now come to the personal conclusion that 18 games would be bad for football overall, particularly bad for the players, and ultimately bad for me as a fan.  This past weekend cemented this for me.  Too many injuries to players with each game, and adding two games to that will only make that worse.  So as a business owner who always tell my staff, don’t bring me problems without bringing me possible solutions, I have a suggested solution that should give ALL of us what we want without anyone really losing out (at least not significantly).

 

First let’s asses what the various “actors” in this scenario want:

 

Owners: More Revenue but ultimately more profit

- Revenue for the owners comes in a few forms: TV Revenue is the biggest chunk, Gate (and associated) revenue (parking, concessions, etc.), merchandise and royalty revenue

Players: As much salary as possible with only as much playing as is necessary (for them 16 real games seems to be about right)

 

TV Networks: More TV broadcast games, in particular games that are broadcast without competition from other football but only to the point where the product isn’t too diluted.

 

Fans (without tickets): More games to watch (ideally meaningful games), especially of our favorite team (my plan won’t address this second part)

 

Fans (with season tickets): Less money wasted on preseason games.

 

My proposal is, in lieu of an 18 Game (with 2 preseason games) schedule spread out over 19 weeks of regular season (I’ll call this 18/19), is to create a 16 game (with 2 preseason games) schedule still spread out over 19 weeks (I’ll call this 16/19).  Some of us will remember that the NFL use to play a 16 game 16 week schedule.  The bye week was added to create an additional “Football Sunday” on the calendar, many hated the idea originally but it’s almost impossible to now imagine the NFL season without that bye week.  A 16/19 schedule though hard to imagine wouldn’t be that much different.  Each team would get 2 additional bye weeks during the season. Television would get 2 more weekends of real football, which I believe would increase the revenue to the NFL.

 

The counterpoint is that each weekend would have fewer games played, which might negatively affect the networks’ valuation of how much each weekend is worth to them.  In net, they might not pay more for 19 weeks with less games each week than for the 17 weeks they pay now.

 

I’m not sure this is a problmem.  I agree that the TV Networks would not likely pay quite as much for 16/19 as for 18/19 but I do strongly believe they would pay more than they pay for the current package. In my opinion the NFL doesn’t suffer from a lack of games, it suffers from too much overlap of games.  Think of how many weekends have 3 or 4 great games and you only get to see 1 or 2.  It just feels like there is a lot of overlap of good games which screams to me spread them out more. (check the TV map for CBS this weekend, several good games will only be seen by a small portion of the county). The NFL RedZone is also the perfect proof of this.  The NFL has had to custom build a new delivery mechanism so that fans can consume all these concurrent games.  So the problem is there is an oversupply of games in a narrow bandwidth of time.  Much of this is dictated by the physical realities of football.  Teams need a solid week to recover from each game so you have to concentrate the games to allow for this, but only if you keep the overall boundaries of the season constant.  If you “widen” the season to 19 weeks without increasing the supply of games (16) you in affect de-concentrate the supply which I believe raises the value of each game and thereby each Sunday.

 

Ultimately for TV Networks this is about ad time to the number of televisions, so all the overlap that currently exists diminishes their revenue capabilities given a fixed supply of total games.  CBS had 6 games this past weekend overlapping (they did not have the double header), in full they could only sell a single games worth of national ad time even though there were 6 games.  If that was spread out with 2 weeks added to the beginning of the season, they’d get 2 more full games worth of advertising time to sell (actually since CBS and Fox alternate getting the double header, they each get 3 additional broadcast slots.  They don’t really lose anything but gain 2 weeks. Their only risk is that with less games to choose from each week, they MIGHT have a Sunday with no decent games to choose from for a more national level broadcast.  I would think this would be rare enough and football is popular enough for it to still be more worth their while, and therefore offer the league more money for those extra 2 weekends.  IF the Colts are off, and my only option on CBS is Raiders v Chiefs, I’m probably still turning that on even if I’m not glued to the screen.  So I think the total number of televisions watching NFL programming over the course of a 16/19 schedule is significantly higher than the current 16/17 format, which should mean higher revenue for the league from the networks.

 

Let’s talk some round numbers: Figure that each week in a 16/17 schedule is worth about 4.5% of the total package (25% for the playoffs, and 1/17th of the remaining 75%).  If they paid the same rate for the two extra weeks it would be an additional 9% approximately. I think it’s fairly safe to assume that the owners could get at least 6-7% more for a 16/19 schedule over what they get now.  The best part is that the NFL wouldn’t incur any significant increase in operating expenses to gain this additional revenue.  The same cannot be said for a 18/19 games schedule where clearly the players are not going to play 2 more real games without a piece of that pie.

 

Now it is true that owners will give up the gate revenue on one pre-season game (and not have it converted to a real game like in the 18/19 plan), and I can’t argue that the owners are going to want that revenue.  However in terms of net profits which is ultimately what the owners really want, I think they’d come out to around the same level of increase on a 16/19 plan verses the 18/19 plan without facing the downsides those 2 extra real games.  Besides I think they could easily counter the loss of the one game and use it to justify a ticket price increase.  You could keep the package price of the season tickets the same (so there would be no net cost affect to ticket holders) but just reduce the tickets from 10 (8 real, 2 pre-season) to 9 (8 real, 1 pre-season).  As a former season ticket holder I’d accept that. Pre-season was mostly a giveaway ticket anyway.

 

I think the NFL makes more revenue in this scenario.  Would it be as much additional revenue as adding 2 more games?  I’m not sure, it might not be quite as much but I don’t think the difference would be that substantial.  The networks wouldn’t gain that much more in an 18 game 19 week schedule than they would in a 16 game 19 week schedule.

 

The other upside to the owners is that a 16/19 schedule shouldn’t COST the owners more, and in fact the owners could make higher profits in a 16/19 schedule. Their costs might go down because they are paying players for 2 less preseason games and no additional regular season games.  The season is still essentially the same length even if they start collecting game checks sooner, so they might even be able to avoid paying the players anymore, so if their costs stay relatively the same and revenue goes up their profits go up which is what they really want.  If they add games there is NO WAY the players are accepting that without more pay, so that approach guarantees higher costs so any additional revenue they’d stand to gain in an 18/19 schedule would likely be more offset by higher costs so my guess is the profit upside to the owners would be less than in an 16/19 format.  A 16/19 format should give owners the best chance of increasing their profits with the least number of headaches and risks.

 

The more I’ve thought about this the more it makes both logical and economic sense.  Maybe I’m missing some big factor in how the Networks will value the deal and those extra weeks/games.

 

Summary:

Upsides to a 16/19 schedule:

- More TV revenue than a 16/17 schedule (even if not quite as much as an 18/19 schedule)

- Operating Costs should remain flat (or could even be reduced….)

o In fact with 3 bye weeks they could potentially rationalize shrinking the 53 man roster and increasing the practice squads size (owners would love this, coaches and players would hate it)

o I think either way the Practice Squad sizes would be increased to offset the loss of 2 pre-season games.  This is the answer to the Gary Brackett/Dom Rhodes hyperbole, they would have shown enough in 2 pre-season games to make a larger practice squad and still had the opportunities they did.

- Gate revenue would be flat if ticket prices were raised to keep the season package price level (for the Colts per game prices would increase by about $5/game on the low end to about $20-30 on the higher end (not counting suites)

o Though as a positive PR move I’d consider making the package price just slightly lower, such that it could be spun that owners are in fact “lowering” the cost of tickets for fans (true in aggregate if not on a per game basis)

- It would also mean that fans might get to watch more games by other teams when their team has the weekend off twice more a season.

o This seems particularly true given the growing popularity of fantasy football (this was a point from Nate)

- 3 bye weeks makes it easier and more reasonable for them to have more international games and even mid-week games as teams could be guaranteed a bye before or after those games.

- More bye weeks should mean healthier overall players which should have a positive impact on the quality of play

- More teams would get national exposure (less games per weekend plus more nationally televised games overall)

o Of course this is good if you are a decent team that’s up and coming.  Bad if you’re the Lions… once a year on Thanksgiving is already too much thanks.

- Season ticket holders paying for 1 less “junk” game

- Might 3 bye weeks open the possibility for an overseas team (unlikely but it’s pretty much impossible for that to happen in an 18 game schedule)

- This is probably an easy Win/Win compromise between the owners and players in the CBA negotiations.  18/19 is going to be a tough pill for the players to swallow EVEN if the owners cough up more money.  My guess is that the owners will have to give up a disproportionate share of their revenue gains to the players in an 18/19 schedule.  I just don’t see how either side will win with that approach.

- The networks also seem to love hype.  Imagine if the Colts and Pats each had a Bye week before their almost annual matchup?  The two weeks of hype leading up to that game would huge for the network and for ESPN and NFLN and the media in general.

- Integrity of season and career records (at least since they went to 16 games) will remain intact. (this is thin I admit but it does enter the conversation)

Downsides of a 16/19 schedule

- Probably slightly less revenue than an 18/19 schedule (but still more than 16/17)

- Fallout from raising ticket prices to cover the one eliminate preseason game (I don’t see this really but it’s possible)

- Potential for “Dud” weekends.  It is certainly possible that a weekend here and there might not have enough marquee games to fill all of the national spots (basically there are potentially 5 nationally televised opportunities each weekend (6 when NFLN does Thursday night games), There could be a week where you might only have 2 or 3 good match ups.  (I still think fantasy football counter acts this enough to reduce the impact, plus for me bad football is better than no football)

- Bye weeks could interrupt the “rhythm” of the football season and lead to lower interest levels (I think this unlikely but I can see an argument here, as the true scarcity of the product isn’t dramatically affected.)

- People that just want to see more of their own home team won’t get what they want.

Upsides to a 18/19 schedule: (highest amount of revenue)

- More TV revenue and more gate and tertiary revenue

- No change to the number of games played on a typical weekend

- Assume the costs of a season ticket wouldn’t change but 1 home game changes from a pre-season game to a real game so better value on the same investment for the season ticket holder

- Higher supply of games (which means more total tickets in play) means market prices per game might be suppressed (though the economy is doing some of this already I suspect).

- Gives some additional scheduling flexibility in terms of rivalries and maybe overseas games (though see downsides on this)

- Season ticket prices should remain the same but one game is converted from pre-season to regular season which should make the package slightly more valuable.(Though owners would be likely to use this logic to justify raising prices further).

Downsides of a 18/19 schedule (in short: injuries and higher costs)

- Increased injury risk to players both per season and in aggregate (wear and tear) of their careers with more games each season

- More games = more injuries (it is an undeniable fact) which means lower quality football is likely throughout the season and especially into the playoffs

- More games means more potential for meaningless games.  Teams that are 2-14 would have to have 2 more meaningless games.  Teams that are 14-2 too would likely have more games to potentially sit starters

- Without additional bye weeks, international games put additional stresses on teams, so combined with an added 2 real games is this just too much to ask teams to handle?

- More money will have to be paid to players to get this into the new CBA plus it makes for a very contentious issue during negotiations.

- Should necessitate larger rosters which means higher costs to teams.

- Decreases the “scarcity” of games/tickets which in theory lowers the value/meaning of each game

o This is my biggest fear about 18 games.  16 games seems to find just about the perfect balance for most teams where almost every game is important.  Sure teams like the Colts occasionally win enough early to rest starters late, but it’s not that common, and bad teams are playing meaningless games in late Nov and Dec. but it’s the every Sunday is a big game that makes football so compelling.

- Impact to career and per season records (this is thin I admit but it does enter the conversation)

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