“ The most significant development at the network after its dramatic launch was Murdoch’s daring decision to submit a preemptive bid for NFL rights in 1993, which CBS refused to come close to matching. The conventional wisdom about the Fox network in the 1990s is that this fateful decision “made” the network. The move unambiguously accelerated Fox’s ascension among the broadcast networks. It also ========== The Curse of the Mogul (Jonathan Knee) - Highlight Loc. 4206-9 | Added on Thursday, April 08, 2010, 05:37 PM Murdoch secured the NFL rights by paying $395 million a year, almost 60 percent more than CBS. CBS, which had claimed to lose money on the previous deal, offered to go as high as $295 million in the face of the challenge. ABC and NBC quickly offered slight increases to $230 million and $218 million a year, respectively, to renew their deals, increasing the total amount flowing from the networks to around $3 billion over the next four-year period. ========== The Curse of the Mogul (Jonathan Knee) - Highlight Loc. 4214-15 | Added on Thursday, April 08, 2010, 05:37 PM unguarded moment, Murdoch himself said: “Did we over pay? Of course we did.”17 ========== The Curse of the Mogul (Jonathan Knee) - Highlight Loc. 4220-22 | Added on Thursday, April 08, 2010, 05:38 PM First, it was obviously not believable to News’s accountants, who required the company to write down $350 million of their $1.58 billion deal in 1995.19 Second, if this fixed the affiliate problem, ========== The Curse of the Mogul (Jonathan Knee) - Highlight Loc. 4225-30 | Added on Thursday, April 08, 2010, 05:39 PM football itself, it is true that Murdoch’s decision had only a modest impact on the prices paid overall in 1994 for rights. But the impact at the next renewal in 1998 was dramatic, resulting in eight-year deals together totaling $12.8 billion. This represented a doubling of the annual cost, which now exceeded total ad spending on games by $1 billion.20 This escalation in bidding set off by News’s original “strategic” decision extended to other sports as well, so that in 2002 the company had to write down close to $1 billion across rights contracts for the NFL, Major League Baseball, and NASCAR.21 ========== The Curse of the Mogul (Jonathan Knee) - Highlight Loc. 4230-34 | Added on Thursday, April 08, 2010, 05:39 PM Nor did the negative spillover effects end at the shores of sports rights. Producers smelled the blood in the water and knew the discipline that had been exercised by the networks in years past was at an end. For the first time, when established series came up for renewal, they held an auction, and sure enough, they were not disappointed. In 1998, NBC was forced to increase its price per episode of ER from $2 million to $13 million after Fox and ABC each offered close to $20 million an episode.22 ========== The Curse of the Mogul (Jonathan Knee) - Highlight Loc. 4230-36 | Added on Thursday, April 08, 2010, 05:40 PM Nor did the negative spillover effects end at the shores of sports rights. Producers smelled the blood in the water and knew the discipline that had been exercised by the networks in years past was at an end. For the first time, when established series came up for renewal, they held an auction, and sure enough, they were not disappointed. In 1998, NBC was forced to increase its price per episode of ER from $2 million to $13 million after Fox and ABC each offered close to $20 million an episode.22 Other historic profit-maximizing practices fell by the wayside as networks fought openly and often irrationally for affiliates, stars, and programming. Indeed, as suggested by the remarks ========== The Curse of the Mogul (Jonathan Knee) - Highlight Loc. 4242-44 | Added on Thursday, April 08, 2010, 05:41 PM group that already carried his network.25 The net result of Murdoch’s decimation of the prevailing culture of cooperation among networks was billions of dollars in value shifting from their shareholders into the pockets of producers, station owners, film stars, and athletes. ==========”
