CBS Sports’ Sean McManus on NFL Ratings, the Value of RSNs, and the Future of Rights

Even in a multiplatform world, broadcasting plays a key role

CBS Sports Chairman Sean McManus sat down for the keynote conversation at the TVNewsCheck TV2020 conference at NAB NY this week. Top of mind was growing NFL ratings, the future of TV rights, and the role broadcasting plays in a multiplatform universe.

CBS Sports’ Sean McManus says sports rights will continue to be the most valuable programming asset.

He pointed out that all of the big sports events are still seen on broadcast TV, whether it’s The Masters, the Super Bowl, or the NBA Finals. Even NASCAR has migrated back to broadcast TV from cable.

“I think that the men and women who control those rights … believe in broadcast television,” he said, “because part of the reason sport is as popular as it is is that the big events are available to every man, woman, and child in the television universe.”

McManus also discussed the rise in NFL ratings this year and pointed to a couple of factors. The Kansas City Chiefs have been a bigger draw than expected, and there is a dominant team in the Los Angeles market as the Rams have given new lift to ratings in one of the biggest markets in the nation.

“But you need to keep it in perspective,” he added, “because, even though we were down for two years in a row, NFL programming is still as dominant as it has ever been. And, with everything going on in the world today, people need the diversion of sports even more than they have in the past. And I think that is reflected in NFL ratings.”

He also added that, while the sports-TV business is a competitive one, all of the entities involved with the NFL are rooting for each other.

“Sunday Night Football [on NBC] is up over 30% from last year,” he noted, adding, “That is good news for all the rest of us doing business with the NFL.”

Next year, CBS will have the Super Bowl, so any general bounces in ratings could point to that event’s continuing to be the bell cow for CBS in 2019. McManus acknowledged the pressure of carrying the Super Bowl, adding that ad sales for the game are very strong right now and there is a lot of interest among advertisers, with ad rates eclipsing $5 million.

“I think it’s going to be a great way for us to end what I believe is going to be a very successful NFL season,” he said, “and the local CBS affiliates [of the teams involved] will reap enormous benefits.”

Sports Generates Large Audiences on Broadcast, Cable
McManus noted that he has been hearing that sports rights were in a bubble since he first was in charge of programming at NBC in 1983. “Sports rights go up because they are the most valuable asset of programming in the media landscape and it generates large audiences on both broadcast and cable television,” he explained. “Although they may seem ridiculous, they always make sense.”

Fox, for example, paid handsomely for the rights to the NFL’s Thursday Night Football package, but McManus said it makes sense because it guarantees winning the Thursday-night ratings for 11 weeks.

“It was worth it to Fox to pay a huge increase over what NBC and CBS were paying last time,” he said. “The bubble we thought might have existed for Thursday Night Football evaporated, and I think you will see rights continue to go up.”

The ratings success with the NFL doesn’t mean that the league and the broadcasters are standing pat. According to McManus, there is constant communication with the league on how to improve the pace of play, on scheduling modifications, or on how commercials can be less intrusive.

The next NFL rights deal will be after the 2021-22 season, and McManus said the negotiations will be spirited and there will be a lot of competition. “I’m confident we’re going to protect our territory, and we have also talked to the NFL about ways to modify the package that could make the overall ratings go up.”

Does he expect the likes of Facebook Amazon, Netflix, or Google to be in the hunt?

“They’re all dipping their toe into sports rights,” he said. “And I do think the NFL would have to think very hard about taking one of its major packages off broadcast or basic cable TV because of the exposure elements we’ve talked about.”

The New Norm for Delivering Sports
But multiplatform delivery is clearly becoming the norm for sports. For example, the NFL national games are available via not only on TV but also via authenticated apps from the rightsholder and on mobile devices without authentication (via NFL.com or Yahoo.com). Thursday Night Football games are even carried on both a broadcast network, Fox, and a cable network, the NFL Network. The key for the rightsholder is having national commercials run on all those platforms and count toward ratings.

And then there is the development of subscription OTT platforms like CBS All Access, which allows viewers without cable or satellite to subscribe and watch a wealth of CBS programming.

“The fees that people are paying for All Access are pretty significant,” said McManus. “That is one more opportunity to reach more people on different platforms.”

He cited CBS’s deal with Turner Sports for the March Madness tournament as a perfect example of new approaches to rights deals and programming. It gave Turner the necessary programming muscle to get carriage of TruTV, which carried games, and also allowed CBS to move beyond regional-tournament coverage and provided the money that cable TV can generate.

“If I were there negotiating by myself without those cable resources,” he added, “there’s no way we would have been able to keep the Men’s Final Four.”

McManus also discussed CBS’s efforts with respect to 4K and HDR programming. DirecTV has been the primary outlet and financial supporter of events like The Masters in UHD. But the real opportunity will occur when CBS stations can deliver UHD over the air.

“The stations don’t have the ability to broadcast in that format,” he said. “Hopefully, the technology will catch up just like it did with HD.”

Pros and Cons of RSN Business
He also addressed the upcoming sale of Fox regional sports networks, which Disney is required to sell prior to government approval of its acquisition of other Fox networks.

“Regional sports networks are attractive in many markets because they are must-carry programming that gives you leverage in markets, and that is attractive,” he said. “They also generate a lot of cash. and that is very attractive. But the potential hazard going forward is the skinny bundle and how much of a reduction in carriage you will get.”

And, with more and more consumers opting out of the regional cable networks, he said, one of the keys will be in-market streaming rights.

“The RSNs have to be able to figure out a way through Major League Baseball, the NBA, or the NFL to get in-market–streaming rights because that needs to be complementary and can’t cannibalize the TV rights,” said McManus. “But I think RSNs are a good business to be in, and we’re looking at it as we do all opportunities.”