Nothing draws U.S. television viewers like American football, so the labor agreement reached between National Football League (NFL) players and owners on Monday was a win for everyone, market experts said.
More than four months after the NFL locked out players with a work stoppage that threatened to disrupt the 2011 season and cost billions of dollars, the two sides finally came to terms on a new agreement.
"I'm not that surprised at the agreement -- there's too much money for it not to happen," said Brad Adgate, senior vice president of research at Horizon Media. "Football is bigger and bigger every year."
The NFL makes about $9 billion in annual revenue, and that is about how much they saved by settling the dispute before the preseason began next month, said Andrew Zimbalist, a professor of economics at Smith College in Northampton, Massachusetts.
The league is likely to have suffered a net loss in the mid-to-high tens of millions of dollars in sponsorships for the season due to the lockout, according to Marc Ganis, president of Chicago-based sports consulting firm Sportscorp Ltd.
Some smaller sponsorships were already likely lost during an offseason spent negotiating with players.
But if the lockout had disrupted the preseason, the amount of losses would have started to go up "very significantly," Ganis said. "They'd lose hundreds of millions each week of the preseason."
Sponsors of NFL games are going to be "extremely relieved" at the agreement, said Tony Ponturo of the Kirmser Ponturo Group, which does sports marketing and consulting.
"If the NFL wasn't there, it would be tough to replace it with an alternative," Ponturo said. Without a season, he said advertisers would probably hold onto the money it would have spent on TV and radio ads and signage at games.
Ganis said that during the lockout, advertisers have had to worry about committing funds to the NFL. "That uncertainty has been the problem," Ganis said.
The NFL is not only popular with the coveted male 18-49 demographic, but has a wide audience with women and across ethnic groups, said Ponturo.
About 111 million people tuned in to February's Super Bowl, setting a record for the largest U.S. television audience for a single broadcast.
"There's something very positive going on, there's a lot of excitement, a lot of momentum -- no one needed a delay," Ponturo said.
Adgate noted that as media gets more fractionalized, the NFL has bucked the trend. No one runs home to catch the newest episode of a TV sitcom anymore -- video recorders took care of that. But football remains real-time, appointment television for fans, Adgate said.
Satellite provider DirecTV sells a lucrative "Sunday Ticket" package for football fans, Adgate noted, and ESPN builds hours of programing around the NFL, which would create a "very, very difficult hole to fill."
Video game makers, restaurants and bars that cater to sports fans, stadium workers, and fantasy football leagues will also be relieved at the settlement, Adgate said, adding that the NFL has done a "textbook job" of creating a marketing machine.
"They have a very good product here and that's why I thought they would come to some sort of resolution without harming the season," Adgate said.