Posted by John Vrooman on Friday, February 20, 2015 in National Football League.

Interview with Pittsburgh Post-Gazette

Full graphics (XL File)

Basically, I wanted to see if I could gauge 1) how much in additional revenue two more playoff games would provide via the networks.

Currently the 3 NFL TV networks (excluding ESPN) are paying between $2.00 and $2.50 per viewer in regular season TV rights 2014-22. CBS recently extended Thursday Night Football for an 8-game season for about $300 million. TNF averages 16 million viewers, so total expected viewership would be 128 million for a$300 million fee. This sets the going rate at about $2.34 per viewer for the regular season.

The ad rates for TNF are going for $600K per spot and the Wild Card playoff games draw about twice that rate. So the going rate for TV rights for the WC playoffs would be $4.67 per viewer, which is twice the rate for regular season TV rights.

Last season the WC Playoffs averaged a 17.2 rating with about 30 million viewers. This sets the expected annual TV rights at $280 million ($4.67 x 30 million x 2) for the proposd combo pack of 2 additional NFL WC Playoff games through 2022.

2) why the NFL is turning down that extra money and

Goodell is probably waiting to confirm support from undecided owners including Dan Rooney, and the other owners seem to be fluid on the playoff expansion issue in spite of a reasonable expectation clear positive sum economic advantages and game quality improvement.

The most immediate positive reason for adding the 7^th seed is to remedy the playoff’s obvious fatal flaw of champions of weaker divisions displacing better WC teams from stronger divisions. For example, last season the .469 NFC South Champion Carolina Panthers displaced the .625 Philadelphia Eagles who finished second in the NFC East to the 3^rd seeded Dallas Cowboys.

This was the fifth time since 2008 that a division winner made the playoffs with a worse record than a non-playoff team (2008, 2010, 2011, 2013). It was the second time since 2010 that a division winner had a losing record— the 2010 Seattle Seahawks won the AFC West with a .438 record and bumped the .625 Tampa Bay and New York Giants. In 2008 the .688 New England Patriots were left out of the show in favor of the San Diego Charger, who won the AFC West with a mediocre .500.

Adding another WC team as a 7th seed and demoting the second seeded division winner to WC weekend reduces the estimated SB chances of the second seed, but it improves the probabilities of the first seed as well as the enhancing the chances of seeds 3 through 7.

The major argument against playoff expansion is the dilution of the product similar to NBA and NHL that both field post-season tournaments with 16 teams from a 30 team league. This dilution is probably not going to happen even if the NFL continues moving toward filling every prime time slot during the week.  

For example, the comparable 7-2 seed matchup ratings in the NBA were actually the highest of the first round in both of the last 2 seasons.

Moreover the seeded NBA finals are more predictable (less random) the NFL because of the relatively certain outcomes best-of seven mini-tournament in each round. The knockout rounds in the NFL introduce a random element (bad calls are not offset by good calls) that make the final result less predictable from tournament seeding based on the regular season.

This difference in final outcomes is consistent with the strategic preference of the NBA for dynasties and the NFLs pursuit of parity among clubs. The addition of the 7^th seed and 2 additional WC games increase the chances for all clubs except for the second seeds who now have to defend their 2^nd spot.

3). what is stopping them from making it happen. For example, he mentions conflicts with college football. Is that because of the antitrust exemption the NFL enjoys?

There are not really any conflicts with the new College Football Playoff (CFP), even if one of the proposed NFC WC games is scheduled on Monday night following WC weekend (this year Jan 5). The CFP final game is scheduled the unoccupied Monday following the 2^nd round Divisional Playoffs (this year Jan 12).

As a matter of fact the NFL should be concerned about the potential competition of the CFP in the not so distant future. The new four team CFP mini-playoff on ESPN was witnessed by an average of 30 million viewers, which was the same number of viewers that watched the WC round of NFL.

The NFL does not have a blanket anti-trust exemption. The only NFL antitrust exemption was given in the 1967 AFL-NFL merger (as an amendment to the Sports broadcasting Act of 1961) where Congress allowed the merger (that sent the Steelers to the AFC) if the League did not contract in size and show games on Friday nights in competition with high school football (Texas and Pennsylvania).

There is an extremely remote chance that the NFL could be seen as violating Section 2 of the Sherman Act if it went head to head with the CFP, but this is very unlikely because college football is more of a complement to the NFL than a competitive substitute.

In addition to concerns about conflicts with college football, Goodell said before the Super Bowl he was concerned about diluting the regular season product.

Perhaps Goodell is defending the NFL regular season’s severely flawed product of over-rewarding the winners of 8 shallow divisions of 4 teams each. This is not far from a NFL stretched out parity philosophy of giving all teams a trophy for actually participating in the regular season.

The NFL’s once famous and powerful league-think solidarity philosophy where on any given Sunday any given team can defeat any other has now devolved into a league of random mediocrity where the pursuit parity has become equally bad teams beating each other.

Let’s face it: NBA final outcomes may have become way too predictable and deterministic, but the NFL “product” has become way too random and fractured. This is perfect for red-zone fantasy players whose hand-picked teams have zero relation to the continuity and synergy of team production on the field.

However, the NBA and NHL invite 16 of 30 teams to their playoffs.

Here is a cool graphic showing the relationship between the regular season performance and the probability of making the playoffs in the Big 4 NA leagues. The important point is the inflexion point where the playoff chances are 50/50. Based on the seasons 1995-2008 these flipping points are estimated  at 89 wins (.550) in MLB, below .500, 40 wins in NBA and NHL (.492) and 9 wins (.563) in the NFL. If a club is below the threshold they abandon the season and sell talent and if they are above the threshold they acquire talent at mid-season trade deadlines.

MLB added two WC teams in 2012 and last season the NLWC  San Francisco Giants with 88 regular season wins defeated the ALWC  KC Royals with 89 wins in the World Series.

The best strategy is to build a club that can reach this critical threshold 89-90 wins in MLB and 9-10 wins in NFL and just get into the playoffs. Once in the playoffs then outcomes become randomized crap-shoots in MLB and NFL because of relatively short (3/5 game) series and one-and done knockout rounds.  This strategy does not work in the NBA because the post-season is a virtual repeat of the regular season.

Is there any evidence networks would be turned off from expanded playoffs? Have their leagues seen increases in their deals with networks in recent years, and if so, have playoff ratings played a part in that?

On the contrary, the networks would be psyched for extra live playoff TV rights. Ad rates for live sports programming are exploding because of the vanishing availability of live broadcasts in the new age of streaming and fast forward recording. NFL TV rights jumped 62 percent from $127 million annually per club to $206 million per club 2014-2022; NBA rights have almost tripled; MLB rights have doubled; and NHL rights have quadrupled.

The ad rates increase in direct proportion with the numbers of viewers. 30 second spot ad rates over $1.2 million for the WC round of NFL Playoffs are twice the $600,000 rate during the regular season; three times the base rate for Divisional round 2; 4 times base rate for round 4 conference finals and over 7 times ($4.5 million) for the Super Bowl.

CFP rights fees have increased 3.5 times the same BCS bowls with 30 million viewers for the “Final 4” series. This is almost half of the average viewership of the NFL final 4 and twice the viewership for the final series in NBA and MLB.

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Followup.

Complete graphics (XL File)

With Super Bowl 50 scheduled for Feb. 7 next year I believe the wild-card round would begin Saturday Jan. 9. The CFP championship game is scheduled for Monday Jan. 11. So it appears there would be a conflict next year as Goodell suggests.

You are correct. The non-conflict in 2015 was a one-third exception rather than the two-thirds rule rule.

Based on the predetermined schedule for the CFP and the assumption that the NFL continues to schedule the Super Bowl on the first Sunday in February for TV ratings sweeps month, here are the projected conflicts between Wild card Weekend and the CFP Championship game on the following Monday night.

In four of the 12 years of the CFP deal with ESPN the CFP Championship falls on the open Monday of the Divisional Championships (2015, 2020, 2025,2026). In the remaining eight playoffs the scheduled CFP Monday night Championship broadcast would conflict with a potential Wild Card game in the Monday night slot.

It is highly unlikely that the NFL would go head to head with the CFP, and CFP has already refused ESPN request to switch semi-final games as scheduled to avoid the low ratings for New Year’s Eve (see the previous ratings chart).  So the package of 3 consecutive WC games on both Saturday and Sunday is the most likely resolution.