US Stadia Taking High-Tech Steps to Manage NFL TV Success

Recent television ratings data suggest that this weekend's Super Bowl is likely to be watched by a record number of viewers. The conference championship games that preceded it were amongst the most watched television programs in U.S. history. Fitch Ratings says the success of home viewing is creating competition for ticket sales at some U.S. stadia.

The National Football League's (NFL's) schedule helps the stadia compete. The teams play eight home games during the regular season and two preseason home games. In our view, this creates scarcity and pushes up demand, driving strong historical attendance that is not a feature of other sports leagues.

However, high-tech investments are vital in terms of competing with the less expensive home television viewing experience where corporate partners continue to use interactive media to leverage sponsorships to reach the elusive 18-45 year-old demographic.

Installing fast cellular service and wifi are also important in maintaining the fan experience. In our view, the NFL facilities have prudently analyzed the sizable capital costs that these upgrades can carry. For example, Arrowhead Stadium installed 600 wireless access points. Some franchises have been able to reduce capital costs by creating partnerships with cellular carriers. In September, the Arizona Cardinals' University of Phoenix Stadium (which will host the Super Bowl) announced a multiyear partnership with CDW to wire that stadium for wifi.

High definition scoreboards have been installed at a few stadia. However, their costs are larger and may not be prudent for all stadia, as their impact on ticket sales is not yet clear. In July a $63 million renovation of EverBank Field included the installation of the two largest scoreboards in the world. They are both 60 feet by 362 feet. Reliant Stadium's scoreboard is 52 feet by 277 feet, approximately 100 feet wider than the one in Cowboy's Stadium.

According to Nielsen, 49.8 million viewers watched the NFC championship game. That was the most watched program on U.S. television since Super Bowl XLVIII last year; 42.1 million viewers watched a less interesting AFC championship this season. Super Bowl XLVIII holds the record for most viewers of any television program at 112.2 million. The previous Super Bowl was watched by 108.7 million.

We also believe the results of the college football season indicate strength in viewership. This year's college football championship game earned 33.4 million viewers. That was an all-time cable record. The semifinal games were both watched by over 28 million, making them the second and third most watched programs on cable.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

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