NFL season jumpstarts the economy

By Paul Wiseman

Associated Press

Published: Friday, Sept. 9 2011 11:57 a.m. MDT

Concessions at the stadium are managed by a company called Delaware North, which has been stuffing NFL fans full of hot dogs and beer for more than 45 years and has weathered player strikes.

Delaware North also does concessions for the Buffalo Bills, Chicago Bears, Cleveland Browns, Carolina Panthers and St. Louis Rams. The company's payroll for staffing the six stadiums is $24 million. Then there are the food, plate and cup suppliers who count on Delaware North's orders to stay in business.

"Everyone was on pins and needles," says Rick Abramson, president of Delaware North's Sportservice unit, who started his career as a vendor at Milwaukee County Stadium 40 years ago. "A missed season would be a problem for a lot of people because they're counting on that money to make ends meet."

While Jets wide receiver Santonio Holmes was angling for a contract that reportedly will guarantee him $50 million over five years, veteran beer vendors were hoping they wouldn't lose the supplemental income they count on six months out of the year. They take home about $150 per game, plus tips and commission.

Overall, Delaware North takes in about $100 million per year from food and drink sales at NFL events. The company also employs about 30,000 seasonal workers.

"It's a great thing that they were able to resolve it," says Delaware North owner Jerry Jacobs Jr. of the players' agreement. "There was so much at stake."

ON TV: A 'HALO EFFECT' IRRESISTIBLE FOR NETWORKS

Remember the controversial Snickers ad in which two mechanics eat the same candy bar from different ends and wind up kissing in the style of Lady and the Tramp? So does the rest of America.

That's because it aired during the Super Bowl, the most coveted television event for advertisers who want to get their products noticed.

Last year, the Super Bowl aired on Fox and set a record by attracting 111 million viewers, more than any other single telecast, according to Nielsen's list of the year's top 10 programs. The second and third most-watched events were — wait for it — the postgame and pregame shows.

The NFL divisional playoff games rounded out the top five. In fact, excepting the Oscars and an episode of "Undercover Boss", the top 10 highest rated shows were all football.

The higher a show's rating, the more money ad time fetches. So it's no surprise that NFL programming generates $3.2 billion in advertising revenue for TV networks, according to data from Kantar Media. No other event gives advertisers as much exposure — one reason Bud Light is paying $1.2 billion to be the NFL's official beer sponsor over the next six years.

"For advertisers that are targeting men — and increasingly targeting women — the NFL provides great demographics," said Burton, the Syracuse professor.

A canceled football season would have left companies from PepsiCo to Procter & Gamble scrambling to reinvest their ad dollars in other programs. The problem: with broadcast ratings down generally, there are already "too many ad dollars chasing a smaller inventory of viewers," said Nomura analyst Michael Nathanson in a note to clients.

Since the labor deal was signed, electronics maker Bose, Marriott International and financial services company United States Automobile Association have all come on board as sponsors. PepsiCo renewed a 10-year deal and General Motors also renewed its sponsorship. These deals are worth about $2.5 billion in revenue directly to the NFL over the next 10 years, according to league.

NFL ad revenue isn't enough for TV networks to make a profit on the $4 billion they pay the league each year for the rights to air the games. But Fox, CBS, NBC and ESPN get an enormous audience for promoting their other shows.

"If you think of watching the 4 o'clock game on CBS, that's the lead-in to '60 Minutes' or they're promoting the next episode of CSI," says Anthony DiClemente, a media analyst at Barclays. "There's a halo effect that's hard to quantify."

CBS stood to lose the most without a football season, DiClemente says, because more than 40 percent of its 2010 revenues came from advertising.

But it's not just the networks and advertisers who depend on the NFL for a portion of their revenue. If the football season had been canceled, cable service providers would have taken a hit, too.

Viewers would have canceled sports packages like NFL Red Zone, says Robert Seidman, an analyst for TVbythenumbers.com. Football fanatics pay about $50 per season to get the high-definition channel. And there are plenty of customers who only subscribe to satellite television service DirecTV to get Sunday Ticket, a package that shows every NFL game, Seidman says.

There's even a chance that Monday nights without ESPN's "Monday Night Football" would leave some viewers so bereft they would drop cable.

"One reason people list for not cutting the cord is sports," Seidman says. "It's hard to say what people would have done."

Paul Wiseman reported from Washington, D.C. AP Business Writer Mae Anderson in New York contributed to this report.

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