It’s inevitable. At one time, the airing of a major sporting event on cable was unthinkable. That is no longer the case.

Currently, three of the four major American broadcast television networks pay $11.6 billion for the rights to the NFL.  It breaks down to; CBS at $3.73B, NBC at $3.6B and Fox at $4.27B). This deal is up at the end of the year. In addition, cable television’s ESPN pays $8.8B through 2013.

As you can plainly see, ESPN pays more per year for its NFL rights package than the three broadcast networks. However ESPN is not part of the playoff telecasts or Super Bowl rotation. Undoubtedly, this is on ESPN’s radar.

Even as recent as a decade ago, it was unthinkable for a major sporting event to air on cable. That line of thinking has changed over the past several years. Major League Baseball and the National Basketball Association’s playoffs have aired on both broadcast and cable channels for a number of years — mainly on the Turner networks recently.

The migration to cable is becoming the norm.

CBS has aired the NCAA Basketball Tournament for years. In fact, they have had exclusive rights of all things March Madness since 1982. This past year, CBS agreed to share coverage of college basketball’s tournament games with Turner. For now, CBS will continue airing all regional finals right through the national championship.  Turner will pick up some coverage of earlier round games. In 2016 and beyond, the regional finals, Final Four and national championship will alternate between CBS and TBS. That’s right, the Final Four will are on cable in the coming years.

Clearly there is a massive precedent for the NFL to invite cable networks into the Super Bowl rotation. The obvious potential cable home of the Big Game is ESPN.

As of February 2011, the World Wide Leader is now available in over 100 million homes. In comparison, the major broadcast networks are available in about 116 million American homes. There is no longer a great disparity between the distribution of broadcast and cable networks.

The 800 pound gorilla in the room is often ESPN. However, the NFL might account for a large percentage of that weight.

This actually  shows why ESPN is such a cash cow for Disney — which owns the network. Last year, ESPN charged cable providers a $4.08 subscription fee per user. That is nearly double the next highest charge by any cable network. The industry average is $0.20 cents. That means that we can estimate that ESPN makes in the area of $400M off of subscription fees alone.

This is a revenue stream that broadcast networks are not lucky enough to enjoy. Taking this into account, you can see why ESPN is so valuable to Disney.

Connecting all the dots, what makes ESPN this valuable? The NFL has a lot to do with it.

As we have started to allude to, ESPN is, by far, Disney’s most valuable asset. An analysis of Disney shows that ESPN accounts for around 30% of Disney’s overall valuation. In other words, ESPN’s value correlates to about 30% of Disney’s stock price.

Some analysts believe that the NFL is accountable for almost half of ESPN’s profit. That would equate to about 15% of Disney’s stock. Thus, it is clear to see just how massive ESPN has become. Disney is reliant of ESPN and ESPN is reliant on the NFL.

This means the NFL is as powerful an entity as there is, not only in sports, but in the entertainment industry in general. ESPN’s brass will have the power, influence and money to force their way into the Super Bowl rotation in the next several years.

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