Death By Differential (Want of a Nail)

13 10 2016

New York

As you know, margins and differentials are to me what slop is to a pig.

So much of life, and success and failure therein, has to do with the ability to exploit marginal factors on your behalf or seeing them used against you.

I think NFL executives are privately panicking way more than anyone could guess from their outward appearance about what seems to be a not so bad decline in TV ratings.  Because I think just a sustained chronic apples-to-apples 10% ratings drop will have severe and permanent negative consequences for the league.

I don’t know this for sure, but I bet that if you read the official contracts between the NFL and TV networks and the advertising accounts between TV networks and accounts that want to advertise on NFL games, and you consider that even outside the realm of official paperwork, that various stakeholders agree to these deals with a lot of winks and nods and informal expectations, then you have to think that a 10% ratings drop is denying the nail that eventually ends with the fall of the kingdom.  I bet that the interpersonal interplay between the NFL, TV nets and big time accounts involves the assumption that NFL ratings will keep on rising to some extent.  But if they fall, and they are, and this fall holds, then the nets will have to provide make goods to the accounts, (and that has already happened), and then the nets will be far less willing to pay big rights fees to the league when the next TV deal needs to be negotiated, and maybe there are provisions in the current contracts which permit the nets to sequester remittances to the league.  Rights fees to the league are the predominant revenue source, not the box office, not merchandising, and the equitable distribution of TV money makes all the franchises liquid if not profitable even if they’re perpetually bad teams.  If there’s less TV money, then there’s less liquidity in the franchises in general.  If there’s less franchise liquidity, then the next player CBA won’t be as lucrative for the players, and such as it is, NFL player CBAs are already boss-friendly compared to the other major sports leagues.  If franchises are less liquid, this weakens the franchise owners’ hands when they beg local and state taxpayers for their shares in new stadium funding deals.  This pile of dominoes will eventually end at franchise contraction and median player salaries in the six figures instead of the seven figures.  Assessed franchise values plummet, actual sales prices for franchises or shares of franchises plummet, the net worth of franchise owners decline, and while that decline would be illusory provided the owners don’t sell, it would hurt their personal ability to do business, and give them much less personal leverage in their personal business affairs and other business affairs.

And all of this would happen in spite of the fact that games still have 90% of the viewers they had last year, and individual games are among the highest rated TV events this year.

When you bet on perpetual growth, the game is over with even the first slight decline.  We saw that with the subprime affirmative action mortgage circus.

For the want of a nail.

All because black or black-ish players couldn’t help themselves with their typical looksatme I beez black yall theatrics.

We can inflict severe damage with only marginal actions.  Learn it, live it, love it, do it.




3 responses

13 10 2016
Alex the Goon

It wasn’t the blackety-blacks who killed the ratings star; the league killed it, by allowing the monkeys to fling poo through the TV screens at the viewers. Monkey poo doesn’t go well with lite beer and salty snacks.

14 10 2016

Great stuff here.

15 10 2016

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