ABC Says It Expects to Renew NFL Agreement

ABC’s president of prime-time entertainment, Steve McPherson, said Sunday that the Walt Disney Co.-owned network probably would renew its deal with the National Football League so it could continue to claim “Monday Night Football.”

The broadcast network has lost an estimated $150 million a year on its current agreement with the NFL, which expires at the end of the 2005 football season.

Disney had been the lone holdout among media companies, delaying negotiations to renew its prime-time package for ABC as well as rights to Sunday night games for its cable sports network ESPN. And Disney executives had been mum on the NFL talks, saying they didn’t want to begin negotiating until this spring.

But McPherson broke the silence, saying the company intended to hold on to the mantle that ABC launched in 1970.

“We’re planning on having ‘Monday Night Football’ for many, many years to come,” McPherson told writers at the Television Critics Assn. conference in Universal City.

Some industry experts had questioned whether ABC could afford to keep football, considering that the NFL package has been ABC’s biggest money drain. Since 1998, ABC has paid $550 million a year for the rights to the Monday night games, but revenue from the advertising time has never come close to covering the costs.

Disney’s ESPN, meanwhile, has been able to turn a profit on its $600-million-a-year NFL deal by passing much of the bill along to cable companies. Industry sources have said that Disney has little choice but to renew ESPN’s NFL package to pacify cable operators who grudgingly pay more for ESPN than for other channels.

The stakes got higher in November. Viacom Inc.-owned CBS and News Corp.-controlled Fox Broadcasting and DirecTV renewed their Sunday afternoon regular season game and playoff packages with the NFL for six additional years. CBS and Fox agreed to pay the league a combined $8 billion for their deals for 2006 through 2011 -- an increase of more than 25%.

DirecTV agreed to pay the NFL about 75% more, or $3.5 billion, through the 2010 season so it could remain the exclusive satellite TV service provider with football. DirecTV justified the cost because its “NFL Sunday Ticket” has helped increase its subscriber base.

McPherson said his bosses at Disney “will figure out” how to make an economically viable deal with the NFL, citing the network’s long tradition and the importance of “Monday Night Football” to ABC’s schedule.

ABC’s fortunes began to turn this fall when the struggling network rolled out three new prime-time hits: “Desperate Housewives,” “Extreme Makeover: Home Edition” and “Lost.” Disney expects to see the network’s revenue climb this quarter because ABC has been able to hike its rates for advertising time in those shows, moving the network closer to profitability. ABC’s improved revenue picture also puts the network in a better position to absorb another rate increase from the NFL.

NFL executives also have had informal talks with former partners -- Time Warner Inc., which has the TNT cable channel, and NBC Universal, which has the USA Network cable channel -- to gauge their interest in bidding on football.

General Electric Co.-owned NBC walked away from the NFL in 1998, when the league hammered out its current deals with ABC, CBS and Fox. That company’s position hasn’t changed much.

“We would love to have football, but we are not going to make a deal that doesn’t make sense economically,” NBC Universal Television Group President Jeff Zucker said Friday. “We will not make a stupid deal.”