Football Barely Covering the Spread for CBS

Now that CBS's Thursday Night Football schedule is over for the season, one analyst says he expects the network to retain the NFL package next season, but is lowering his earnings estimates for the company.

In a new report entitled "Was Thursday Night NFL Worth It?" analyst Michael Nathanson of MoffettNathanson Research says  that after paying $275 million to the NFL, the games broke even, but that CBS lost a bit by giving up its more profitable usual Thursday night programming.

But Nathanson thinks CBS sees intangible benefits in airing Thursday Night Football. Its ratings were up on Thursday and Monday night, where the hit Big Bang Theory moved temporarily and new series Scorpion successfully launched. At the same time, new shows got steamrolled, including NBC's A to Z and Bad Judge and Fox's Gracepoint.

Overall during the first three weeks of the season, CBS' C3 ratings in primetime among adults 18 to 49 were up 17%, putting it in second place behind NBC. ABC was down 5%, NBC was down 8% and Fox was down 31%, leaving the Big 4 broadcasters down 5%, Nathanson says.

Nathanson sees these reasons are enough for CBS to want to keep the Thursday NFL package. He also thinks that given the negative publicity surrounding player conduct, the league would prefer to keep a low profile and renew the deal at a modest increase. Nathanson estimates CBS will pay about $290 million, a mid-single digit bump.

With that said, Nathanson is lowering his third-quarter earnings estimate for CBS by six  cents a share to 74 cents and full year estimate by 10 cents to $3.10  He points to a weak ad market and difficult comparisons from a year ago, when the Emmys contributed $20 million.

Nathanson's also lowering his estimates for 2015 and 2016. He thinks incremental football revenue will be offset by slowing core growth and that the high costs for football will cut into profit margins.