Has The NFL's Audience Reached Its Peak?

Pacific Crest analysts took a deep look into the media sector. One of their biggest risks for 2016? The National Football League has peaked in viewership.

"NFL ratings appear to have reached a peak," the firm said in a note this week. "Concerns about concussions and off-field issues could adversely impact viewership. NFL is a tent-pole property and drives outsized revenues for many major network."

ESPN's Darren Rovell, arguably the most popular sports business reporter, said the firm's reasoning is flawed. "The large majority of NFL fans don't care about concussions or off-the-field issues. Only wins & losses, fantasy & gambling," Rovell tweeted out on Monday morning.

Pacific Crest also said, "Sports rights contracts are long. If pay-TV monetization rolls over, the long-term margin outlook for sports rights owner could be impaired."

Related Link: Could The NFL Be Driving Up Bids For Thursday Night Football?

The NFL launched Thursday Night Football in 2006 on its eponymous network, and beginning last year on CBS Corporation CBS. The deal was worth $275 million in 2014, and rose to $300 million for the 2015 season. Comcast Corporation CMCSA's NBC has broadcast the NFL's Sunday Night Football since 2006; the game has been the highest-rated show on television in three of the past four seasons, according to Nielsen.

Sports Business Daily last month reported the NFL is shopping its Thursday night game. Along with the usual round of television companies, tech names like Apple Inc. AAPL, Amazon.com, Inc. AMZN, Yahoo! Inc. YHOO And Google Inc GOOG were also mentioned in the report. However, these tech bids could all just be for naught.

"NFL surely benefits from such a report. Shifts bids upward. Shrewd move by NFL if it 'leaked' names," Darren Heitner, founder of Heitner Legal and Professor of Sports Law at the University of Florida, told Benzinga at the time. "Based on reading recent comments from NFL executives, I find it hard to believe that the league is taking anything other than traditional broadcasters seriously."

Regarding the NFL, Pacific Crest noted this "peak" could negatively impact CBS, 21st Century Fox-A FOXA, Walt Disney Co DIS, Comcast and Time Warner Inc TWX. Given that "most networks lack the scaled or niche attraction to be successful," this development could be a boon for Netflix, Inc. NFLX and World Wrestling Entertainment, Inc. WWE.