The NFL Should (But Won't) Embrace Movie Theaters

The NFL Should (But Won't) Embrace Movie Theaters

There’s a really fancy movie theater near my place. You select a reserved seat before you walk in and have a spacious leather recliner with a tray waiting for your snacks. The experience can make a Nicolas Cage movie even somewhat enjoyable.

Local businesses across Wisconsin have drawn the ire of the NFL for showing Packers games publicly. 

Local businesses across Wisconsin have drawn the ire of the NFL for showing Packers games publicly. 

The National Football League should consider partnering with movie theater operators to show their local team’s contests on the big screen. We’re already going to restaurants that boast about big screens and talk about the positives of watching the game with friends – why not show the games on an actual big screen in a place that can seat even more of our friends?

I am not the first Packers fan to come up with this idea. In January of 2008, the Packers were making a deep playoff run in Brett Favre’s Green Bay swan song season. When the Journal Sentinel highlighted businesses across Wisconsin showing the games – Potawatomi Bingo and Casino, Marcus Theaters and the Rosebud Cinema Drafthouse – the NFL swiftly sent cease-and-desist letters.

"We let them know they are violating copyright law and longstanding NFL policies that prohibit mass out-of-town viewing of NFL games," NFL spokesman Brian McCarthy told the Journal-Sentinel in 2008. "[Theaters were showing games on] huge, huge screens that can attract 50 to 500 people watching the games. Talk to your local TV affiliates, who will say those types of events take away from their ratings. That's what this is about.”

Why the NFL wants you to stay home and watch on television

But let’s not take the NFL’s word for it – just how are ratings calculated? Steve Krakauer, a former senior digital producer for CNN, explains:

Nielsen calculates ratings in two ways — “diaries” and “people meters.” Most are now people meters, which automatically calculate what and when certain households watch. There’s no publicly-released information about how many Nielsen households exist. At the highest estimate, let’s say it’s 50,000 households.

The households are evenly distributed by population throughout the United States, and are roughly meant to be representative of the population as a whole. Each household represents 2,000 other households in approximating what the country is watching.

If a Nielsen family goes to the theater to watch their NFL team play, they’re costing their local television station at minimum 2,000 viewers. There’s high stakes in keeping fans who aren’t in the stadium in front of their televisions.

In 2008, the Washington Post highlighted a local church who was told any public viewing could not occur on a television or screen larger than 55 inches per the league’s policy.

Without going too much further down the Nielsen ratings rabbit hole, there’s no way to properly measure the size of audiences watching outside of a home. It makes sense – it’s not like there’s a bartender walking around Buffalo Wild Wings counting how many people are in the restaurant and watching the televisions. The technology we use to consume sports – smartphones, tablets, DVRs in particular – have also thrown a wrench in recent years into the tried and true Nielsen rating system.

It’s not just local businesses who have been told by the NFL to turn off the game. In 2008, the Washington Post highlighted a local church who was told any public viewing could not occur on a television or screen larger than 55 inches per the league’s policy.

In recent years, religious organizations have reached a concession with the NFL for the Super Bowl. The NFL won’t object to a church showing the game, provided they do not charge admission and use equipment from the course of ministry at their premises.

Why movie theaters would love to seat NFL fans

What differentiates a theater as a viewing location from a restaurant or church is the ticket model. It’s old hat to theaters to report quickly on the precise number of seats and dollars brought in for showings.

And if you purchase tickets through Fandango or similar vendors, theaters have even more demographic details about you. Movie theaters could provide the NFL detailed, city-specific data on who’s watching their games – something Nielsen cannot provide to this level of certainty.

Placing a premium product like the local NFL game during both a time (matinee, when ticket prices are lower) and day of the week where there’s plenty of empty seats is a tantalizing proposal.

On an average day, a theater fills 16% of their seats. Consider also, per BoxOfficeMojo.com, that an average Sunday at the movie theaters generates 27.7% of the gross sales from the weekend (2016 data). Theaters have empty seats, and Sundays are the slowest day of the weekend by a wide margin.

As fewer tickets are being sold for movies (1.27 billion in 2014 compared to 1.5 billion in 2004), theaters are trying unique ways to get people into seats. E-sports (competitive video gaming) have made their way onto the big screen – theater chain Cinemark started showing the world championship series of the video game “League of Legends” in 2015.

Placing a premium product like the local NFL game during both a time (matinee, when ticket prices are lower) and day of the week where there’s plenty of empty seats is a tantalizing proposal. Plus, the framework for how to broadcast games is already in place.

Fathom Events, a consortium of theater chains, broadcasts live entertainment events. This summer, over 200 theaters partnered with Fathom Events to show the semifinals and finals of soccer’s Copa America Centenario.

Why the NFL wants me to stop talking about this

The NFL has no appetite to either facilitate or allow others to facilitate public showings of games. Why? It’s all about the Benjamins, baby.

As of 2014, the average ticket price for a family of four to attend an NFL game was $337.72 versus $32.68 to attend a movie at the theater.

For years, the Super Bowl has carried in its wake a team of lawyers scouring the internet for public viewing parties to shut down with a cease-and-desist letter. As mentioned earlier, even churches have not been completely absolved of this policy. If you have a public event and show an NFL game on a television larger than 55 inches, you’re violating the NFL’s copyright.

As of 2014, the average ticket price for a family of four to attend an NFL game was $337.72 versus $32.68 to attend a movie at the theater.

Premium movie theaters – with wait staff, full menus, and leather recliners – are on the rise across America as owners try to entice people to visit the theater.

Premium movie theaters – with wait staff, full menus, and leather recliners – are on the rise across America as owners try to entice people to visit the theater.

The difference in ticket prices between those two venues is unsettling to NFL owners in markets where ticket sales are sluggish and fans may forego the atmosphere of a game for the atmosphere of watching on a big screen, surrounded by fans.

While Packers fans will continue to jam into Lambeau Field in perpetuity, other NFL franchises aren’t so lucky.

If you live in Jacksonville for example, an NFL city struggling to fill its seats every week, the idea of allowing a public venue to show your games in a premium environment is bad for business. The Jaguars need local fans filling their seats, buying concessions and grabbing merchandise on their way out the door.

There’s also the issue of the revenue received at the theater’s ticket booth and concession stands. Movie studios negotiate a percentage split of the revenue with theaters based on how long a film has been in theaters. Since a theater would only show the NFL game once, the split between the league and the theaters would have to be negotiated differently.

Do the benefits outweigh the risks?

Is the additional revenue from hosting NFL games worth it to theaters? Because Sundays are the slowest day of the weekend at a theater and most NFL games take place during typical meal hours, the additional revenue would be welcomed. I would imagine theaters would jump at the chance to partner with the NFL.

For the league, it’s not as clear cut. Opening this door puts the NFL’s relationship with the major networks (NBC, FOX and CBS) and Sunday Ticket exclusive dealer (AT&T/DirecTV) at risk. Between those two parties, the NFL receives over $4.6 billion annually. Is the league hungry enough for more revenue to ruffle the feathers of their two biggest clients?

Roger Goodell’s stated goal in 2010 was to triple the revenue of the NFL by 2025. To do so, the league will need to continue to create new sources of revenue.

From a macro perspective, the NFL has been slowly beginning to pivot towards a pay-per-view model. AT&T (who owns DirecTV) pays the NFL around $1.5 billion annually for the rights to NFL Sunday Ticket, compared to the $3.1 billion collectively each year that CBS, NBC, FOX and ESPN pay for live rights. It costs between $240 and $340 a year to purchase NFL Sunday Ticket through DirecTV, on top of your television package.

Recently, the NFL has also invested significantly in online subscriptions. The 2014-2015 season saw the invention of NFL Now, a streaming service where $1.99 a month unlocked the full catalog of NFL Network content. NFL Game Rewind granted access to stream full games after they’ve aired for around $50 a season.

Since then, the league folded NFL Now and NFL Game Rewind together into a new product called NFL Game Pass, which now costs $99 per season. The full NFL experience – DirecTV’s best NFL Sunday Ticket package and NFL Game Pass – will run you $440 for the 16 Sundays of the regular season.

The NFL's Game Pass subscription allows fans to stream NFL games after they've aired. It's one of the ways the league is pivoting to a pay-per-view model.

The NFL's Game Pass subscription allows fans to stream NFL games after they've aired. It's one of the ways the league is pivoting to a pay-per-view model.

Roger Goodell’s stated goal in 2010 was to triple the revenue of the NFL by 2025. To do so, the league will need to continue to create new sources of revenue. Perhaps opening up America’s movie theaters on Sunday afternoons to NFL fans can be one way.

What do you think? Let us know in the comments.

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