SUPER BOWL XXI : DENVER vs. NEW YORK : NFL, TV Networks Face Tough Negotiations on New Contracts

Neal Pilson, president of CBS Sports, said Friday that the networks and the National Football League probably will be able to work out a new package but “not without some tough negotiations.”

Those negotiations will begin next month. The current five-year, $2.1-billion contract expires Feb. 1.

“We need a reduction in order to make money in 1987,” Pilson said.

CBS reportedly lost about $30 million on NFL football in 1986, ABC lost even more, and NBC was a loser, as well.

Pilson said, however, that CBS lost money only the last two years and did make a small profit for the five-year life of the contract.

“We spent $900 million during that time--$740,000 for rights and the rest for production--and made about a dollar,” Pilson said. “Hypothetically, let’s say we made $2 million. You can’t really call that making money.

“We’ve reached a ceiling,” Pilson said. “I said 2 1/2 years ago that the cycle of escalating rights fees for sports eventually had to slow down. That’s where we are now. You’ll see it first with the NFL, then with baseball.”

Pilson said he has had some preliminary talks with NFL Commissioner Pete Rozelle but no formal negotiations.

Those will begin next month when Rozelle and Cleveland Browns owner Art Modell, head of the NFL’s television committee, meet separately with the heads of the three major networks’ sports divisions.

If a deal is worked out, then Rozelle will take the terms to the NFL owners for ratification at the NFL owners meetings on Maui in mid-March.

“The two significant issues are, one, the economics and, two, whether or not the NFL will bring in a fourth carrier,” Pilson said.

HBO, Showtime, ESPN, Turner Broadcasting and Fox Broadcasting have all expressed an interest in NFL football. One is likely to end up with a five- to eight-game prime-time package.

“We would be opposed to such a package and don’t think one would be in the best interest of the NFL,” Pilson said.

“For one thing, if the fourth carrier is supported by commercials, such as an ESPN, then the advertising marketplace for NFL football is diluted,” Pilson said.

“Because of that, there would be less revenue coming from the networks.

“There may be another problem with pay-services such as HBO. My legal department informs me that with the NFL got its antitrust exemption (in 1961), one of the stipulations was that it remain on sponsor-supported television.

“So there may be a problem that has to be addressed.”

Would CBS be willing to give up NFL football?

“We’re not oblivious to the pluses of NFL football but CBS isn’t prepared to lose hundreds of millions of dollars,” Pilson said.

Pilson said he doesn’t anticipate any overall increase in the value of the new package.

“I think the teams are going to have to look at other means of making money,” he said. “They’re going to have to improve their marketing techniques, maybe raise ticket prices and look at their costs.

“You’ve got teams with coaching staffs of 13. Maybe those will have to be reduced.

“They could cut travel expenses with a carefully planned schedule.

“Because of the current state of our economy, everyone else is looking at cutting costs. The NFL should too.”