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May 23, 2023

Editors Note: Jake Kline has the controls this morning with his monthly piece.

Legacy Economics Keep ‘Cross-Flexing’ From Destroying NFL Tradition

The 2023 NFL season will be the league’s first under its new TV agreements with CBS, Fox and ABC/ESPN.

Fans and pundits have speculated, since the deals were signed in March ’21, that the league’s expanded ‘cross-flexing’ policy would destroy what remains of the traditional CBS-AFC and FOX-NFC ties.

But those concerns proved largely to be for naught with the recent schedule release.

While the 2023 slate includes a few marquee matchups on networks that previously wouldn’t have aired those games (think: Chargers at Vikings on Fox in Week 3 or Seahawks at Bengals on CBS in Week 6), network-conference affiliations will largely remain intact.

And that’s not likely to change during this rights cycle, either.

Legacy economics won’t allow it to.

For decades NFL fans knew where to find the game(s) they were looking for on Sunday afternoons. They just needed to know the away team’s conference affiliation. 

If the club played in the AFC, the game was part of the league’s AFC television package and would be airing on one network (currently CBS), and if it played in the NFC, the game would be part of the NFC package and be broadcast on another (currently Fox). 

‘Cross-flexing’ changed that dynamic.

“It was conceived in order to alleviate scheduling pressure, [to create] more choice for the networks and [to allow] them to greater prioritize which teams they want to air,” former Fox executive Patrick Crakes said.

The NFL began ‘cross-flexing’ games out of necessity. In Week 13 of the 2011 season it faced a quandary after swapping out the designated Sunday Night Football game, Colts-Patriots, in favor of Lions-Saints. The move gave CBS a seventh 1:00 p.m. EST game and left Fox with just two.

The league ended up giving one of the CBS games (Broncos-Vikings) to Fox to balance out the early afternoon allocation. In doing so, it also gave Fox another bite at then-rampant Tim Tebow mania, which CBS had primarily benefitted from to date. 

From that point forward, the networks had a handshake agreement with the league to swap out the occasional game. The NFL officially included contractual provisions for ‘cross-flexing’ in the TV deals it signed in 2014.

The league expanded on its ‘cross flexing’ capabilities in the latest round of rights negotiations, allowing for more cross-flexes per season.

But while the policy has been loosened, it won’t be the free-for-all that some

league observers

anticipated.

Under the terms of the new rights deals, CBS and Fox were able to protect a number of appearances for select teams. 

And CBS largely chose AFC teams, while Fox did the same with NFC clubs. 

The Dallas Cowboys, for example, will only have two ‘cross-flexed’ games this season (see: Patriots-Cowboys to Fox, Commanders-Cowboys to CBS) and the team is only slated to play one less game on Fox (eight) than it did last year. Week 18 games have not been assigned to networks yet, either.

The 2023 NFL Season Contains a Total of 52 Cross-Flex Games

Week 1: 3

Week 2: 2

Week 3: 3

Week 4: 2

Week 5: 3

Week 6: 3

Week 7: 4

Week 8: 3

Week 9: 4

Week 10: 4

Week 11: 3

Week 12: 4

Week 13: 4

Week 14: 1

Week 15: 2

(5 games yet to be assigned a network)

Week 16: 3

Week 17: 4

Week 18: TBA

(16 games yet to be assigned a network)

The reason the more things change, the more they stay the same –at least with regards to NFL game allocation– is that many of the stations CBS and Fox own, or are contracted with, are aligned with the AFC or NFC team in their market. 

History plays a key role here. Fox’s acquisition of NFC rights in ’94 triggered a seismic shift in the TV landscape with many local stations changing their affiliation to the then-emerging network. CBS, which had existing local affiliates nationwide, got back into the NFL by acquiring the AFC package in 1998. The networks have maintained the same conference affiliations since.

It has been the fiscally savvy move to make.

“A big part of the business models for Fox and CBS relies on the fees paid by distributors (cable, satellite, YouTubeTV, etc.) to carry the networks’ local affiliates on their platforms,” longtime TV ratings analyst Robert Seidman said. “How those fees are established is partially based on the number of NFL games they show.” 

And NFL fans want to see their favorite team’s games.

If a local Fox affiliate in Philadelphia were to start showing significantly fewer Eagles games, a distributor may no longer be able to justify the high fee Fox charges to carry it. So, the networks keep the conference affiliations intact.

“It’s all about legacy economics,” Crakes said. “Fox and CBS have optimized their revenue streams through modern broadcast retransmission fees. Even when the network does not own the affiliate outright, the network receives a share of the fees in what’s known as ‘reverse compensation.’ Walking away from all of that simply isn’t feasible.”

In the end, we’re left with the current compromise: networks swapping a tantalizing matchup here or there, but not frequently enough to threaten the structure upon which the local TV station business has been built.

That’s not to say the latest iteration of ‘cross flexing’ won’t bring about a few changes.

Seidman theorizes cross-flexing could yield better, more attractive games going to more of the country; especially in the regional windows (1:00 p.m. EST and 4:05 p.m. EST).

It could also accelerate the network business’ growing reliance on retransmission fees. For a long time, its primary form of revenue was from advertising. Today it’s roughly split even between advertising and retransmission fees. Crakes expects the latter to account for close to 60% by the end of the current rights cycle.

"Retransmission fee revenue moving past par with advertising is in theory a good thing for the NFL’s broadcast partners as it diversifies the revenue mix and balances one variable source with long-term fee based contractual economics," he said. "However, given most of the revenue growth in pay TV currently comes from increases in broadcast retransmission fees, and the steady drop in the effective reach of broadcast TV, at some point the ability to directly pass on increases will become increasingly difficult.”

About the Author: Jake Kline is an attorney specializing in sports/media/entertainment, finance and digital technology. You can follow him on Twitter @JakeAKline, on LinkedIn, and email him at [email protected].