ESPN paying 'steep price' for NFL's declining Monday Night Football, analyst says

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ESPN is paying more for Monday Night Football than broadcasters pay for other NFL rights, but the declining viewership may not make it a good deal, MoffettNathanson analyst Michael Nathanson says.

ESPN pays the most annually for its NFL rights, shelling out $1.9 billion every year. Meanwhile, Fox and CBS both pay about $1 billion per year for Sunday games and NBC pays $960 million per year for Sunday night games. In addition, CBS and NBC each kick in $465 million per year to split right for Thursday Night Football, according to a new MoffettNathanson report.

In terms of gross ratings points (GRPs), ESPN is paying $43 per thousand GRPs while, for the same reach, NBC pays $11, CBS pays $9 and Fox pays $8. According to the report, ESPN pays more than four times as much per viewer than the broadcasters for Monday Night Football.

“It is worth noting calling out that ESPN’s deal includes access to more than just MNF (including the NFL Draft, the Combine, the Pro Bowl in addition to extensive highlights rights). Still, it seems ESPN is paying a steep price for a program this is down -15% over two years,” Nathanson wrote.

Nathanson cites a report from Leap Media that says fewer people feel strong loyalty to the NFL and more people are willing to sacrifice watching Monday Night Football.

While ESPN’s deal with the NFL extends through 2021, Nathanson wonders how much the network will be willing to pay for the next agreement should Monday Night Football’s ratings continue to sag.

RELATED: While NFL ratings decline, NFL ad rates keep going up

Monday Night Football’s troubles are part of a bigger ratings issue for the NFL this season. Though ratings bounced back some in the back half of the season—leading NFL viewership to be down 7% on a two year basis according to Nathanson—the first half of the season was affected year-over-year by a contentious presidential campaign and the sudden dry-up of fantasy football service advertising.

While NFL ratings may have suffered some this season, the cost for ad spots during games continued to increase.

According Standard Media Index’s numbers for September, the average 30-second spot among networks showing NFL games in September was $489,193, up 4% from the same period last year and up 10% from 2014.

“Our new cost level data clearly shows that while ratings on football have been under pressure early in the season, average unit costs continue to increase. This demonstrates that live sport and the huge audiences it attracts are an outstanding drawcard for major brands,” said James Fennessy, CEO of SMI, in a statement.

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