Moody's Sees Little Loss for TV Networks Due to NFL Lockout (CBS) (CMCSA) (NWS) (DIS)
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The National Football League is at serious risk of a lockout for the 2011 season, as the league's players union decertified and will take the matter to the courts, which could end up hurting the television networks that air the most popular sport in the U.S.
Moody's Investors Service said that the NFL lockout of a the players will lead to moderate losses for the television networks, saying that the losses will hurt performance at the margin but have no impact on credit ratings.
"Broadcast networks will lose hundreds of millions in revenues as they replace NFL games and programs that will most certainly attract fewer viewers," said Neil Begley, a Moody's Senior Vice President. "However, given that the significant cost that will be paid to the NFL games that will not be played will not be passed through the income statement, but represent a credit for future seasons, only the difference in the profit between what could have been earned from football compared with what replaces football will affect the networks directly."
Moody's says that the television networks will see a negative impact on the shows that follow NFL games, as these slots are usually able to ride higher on the strength of the NFL.
The major broadcasters in the U.S. all have a hand in the NFL, including CBS Corp. (NYSE: CBS), News Corp.'s (NASDAQ: NWSA) FOX, Comcast Corp.'s (NASDAQ: CMCSA) NBC Universal and The Walt Disney Co.'s (NYSE: DIS) ESPN.
DIRECTV (NASDAQ: DTV), which has exclusive rights to the NFL Sunday Ticket, will not see a drop in profit due to the lockout, but Moody's says that subscription adds could drop off.
The NFL Players filed last week for an injunction that would keep the teams from engaging in a lockout. The matter is set for an April 6 hearing date has been set in the federal antitrust lawsuit.
Moody's Investors Service said that the NFL lockout of a the players will lead to moderate losses for the television networks, saying that the losses will hurt performance at the margin but have no impact on credit ratings.
"Broadcast networks will lose hundreds of millions in revenues as they replace NFL games and programs that will most certainly attract fewer viewers," said Neil Begley, a Moody's Senior Vice President. "However, given that the significant cost that will be paid to the NFL games that will not be played will not be passed through the income statement, but represent a credit for future seasons, only the difference in the profit between what could have been earned from football compared with what replaces football will affect the networks directly."
Moody's says that the television networks will see a negative impact on the shows that follow NFL games, as these slots are usually able to ride higher on the strength of the NFL.
The major broadcasters in the U.S. all have a hand in the NFL, including CBS Corp. (NYSE: CBS), News Corp.'s (NASDAQ: NWSA) FOX, Comcast Corp.'s (NASDAQ: CMCSA) NBC Universal and The Walt Disney Co.'s (NYSE: DIS) ESPN.
DIRECTV (NASDAQ: DTV), which has exclusive rights to the NFL Sunday Ticket, will not see a drop in profit due to the lockout, but Moody's says that subscription adds could drop off.
The NFL Players filed last week for an injunction that would keep the teams from engaging in a lockout. The matter is set for an April 6 hearing date has been set in the federal antitrust lawsuit.
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