The NFL’s various rights deals are coming up soon, with the ESPN Monday Night Football deal running through the 2021-22 season, the CBS/Fox/NBC deals (both the Sunday packages and Fox’s Thursday Night Football contract) running through 2022-23, and the DirecTV Sunday Ticket deal also running through 2022-23. There’s been a lot of speculation about how much more the league might make in the next round of contracts, especially with regular-season ratings rebounding both last year and this year, but a particularly interesting note on that front comes in a CNBC story from Jabari Young that was published Monday. Much of what that story covers will already be familiar to those who follow sports media, but it’s notable for giving year-to-date NFL ratings numbers (a four percent year-over-year rise), for projecting a timeframe for the next NFL rights deals (renewal discussions are expected to begin early in the new year, and a “framework” is expected by early 2021), and perhaps most significantly, for giving us some estimates on just what the NFL might reap from a new round of TV deals:
Neal Pilson, the former longtime president of CBS Sports who now runs his own media and market consulting firm, estimated that the NFL could get a minimum of 25 percent to 30 percent more in broadcast fees under its new contracts, while one network official said a 50 percent increase could happen, too.
The NFL could get between $8 billion to as much as $10 billion a year from its next round of media deals, the network official said.
As that piece relates, the current NFL deals with external broadcasters combine for over $5 billion annually ($950 million from NBC, $1 billion from CBS, $1.1 billion from Fox for the Sunday package, $660 million from Fox for the Thursday package, $1.5 billion from AT&T/DirecTV for Sunday Ticket for a total of over $5.2 billion). If you add streaming deals into that, the league currently gets around $500 million annually from Verizon and around $65 million from Amazon. That brings their total national broadcast revenue to over $5.7 billion annually. But that seems set to go up quite a bit, and it’s particularly interesting that the $8-10 billion estimate comes from a network executive; the network side of this would seem incentivized to downplay the value of NFL programming (compared to NFL executives or even independent consultants) so they could get it cheaper, so a network executive throwing in these kinds of numbers is certainly notable.
It’s unclear if this $8-10 billion projection would include revenue from new streaming deals or not, but even if it doesn’t, it doesn’t seem that farfetched. The NFL is critical for cable networks like ESPN, as it’s a big part of what lets them charge so much more than anyone else in per-subscriber fees, and it’s maybe even more vital for broadcast networks. In fact, the 2018 comments from Lachlan Murdoch around Fox’s Thursday Night Football deal (at a time of falling NFL ratings, no less) are a good indication of that:
“Live sport has never been more important than it is today,” Lachlan Murdoch said. “NFL programming is hands-down the most powerful in all of media.”
That’s key to the “New Fox” strategy of focusing on news and sports, and while Fox’s approach there has its critics, the general idea of the NFL being incredibly important for networks holds up. That’s why ESPN and ABC have been so deferential to the league recently, including with draft coverage on ABC, and that’s why there’s been a lot of talk about ABC getting back into the NFL rights game. And the current networks all seem eager to stay involved as well, and for good reasons; while airing the NFL is expensive, not airing it can be even more costly. Pilson relayed some thoughts on that to Young about how devastating it was for CBS to lose the NFL in the mid-1990s:
CBS learned a valuable lesson when it dropped its NFL package in 1993, Pilson said. FOX outbid CBS for the rights to air the league’s National Football Conference, leaving CBS in a rut.
“Losing the NFL impacted the entire business of the company,” Pilson said. “We lost affiliates; stations left CBS. We lost our male audience, and we weren’t able to develop prime-time shows that attracted many because they weren’t watching our NFL any longer.
“We lost our ratings,” he continued. “We lost our revenues, and it was most costly to the network to lose the rights than it would have been to keep the rights and maybe incur a small profit loss on the NFL. It was worst without the NFL.”
CBS returned to the NFL in 1998 after paying roughly $500 million per season to take over the American Football Conference games from NBC, spending more than double what it paid in their previous partnership before losing the league.
“We lost a lot more money by giving up the rights,” Pilson said.
And that thinking seems likely to hold true again. NFL rights are going to cost a lot, but the NFL is one of the few things that still reliably pulls in viewers. It’s also somewhat “DVR-proof,” as many people want to watch it live. So that allows networks to make a lot on selling those commercials (with those rates rising again this year), and it also allows them to keep their local affiliates and promote their other programming. And with all of the current networks interested in keeping their rights, and with the likes of ABC and perhaps Turner interested in getting involved (to say nothing of streaming outfits like DAZN), there could be a lot of money flying at the NFL indeed.
And the increasing legalization of sports gambling helps here too, both for interest in the games and for the ability to sell ads to gambling operators. Gambling certainly isn’t the only factor here, no matter what Jerry Jones claims, but it is a factor. And when you add that in with the stability of NFL ratings relative to other programming and with the league’s overall importance to networks, it seems likely indeed that the NFL will make a ton more in its next round of media deals. We’ll see just how much that is and just how those deals work out, but the league certainly appears set to profit.