CBS Sports expects to be in business with the NFL for a “long time” despite the looming negotiations with the league for new media contracts. The comment came from Paramount Skydance president Jeff Shell on today’s Paramount earnings call.
The company’s hostile bid for Warner Bros. Discovery has been the headline story for the company in recent weeks. It was briefly acknowledged on the call with Paramount noting the revised all-cash offer of $31 per share. However, they did not comment further on the acquisition efforts. Instead, much of the focus was on the company’s relationship with the NFL and their hopes to hang on to the coveted Sunday afternoon windows as the NFL seeks to renegotiate its rights deals.
Paramount, who along with Fox hold the traditional Sunday afternoon timeslots, are by far the smallest of the NFL’s other media partners and would be the most stressed by the new deals.
Comcast, which owns NBC, has more than $120 billion of annual revenue, and Walt Disney nearly $100 billion. By contrast, Paramount Skydance has about $30 billion and Fox just over $16 billion (a Wall Street analyst today downgraded Fox over fears the NFL renewal will prove too costly for the Murdoch empire). The streaming partners are many multiples higher and could easily bid on the afternoon packages.
“They (the NFL) feel very good about us,” Shell said. “So we’re not, we’re not particularly concerned obviously there, you know, it’s been widely publicized that there is a renewal discussion coming up, and we don’t talk about individual negotiations, but suffice it to say, we feel pretty confident we’re going to be in business with the NFL for a long time. And we have properly accounted for what we expect to be whatever impact of that negotiation in our kind of internal forecast going forward.”
CBS pays $2.1 billion annually for its current Sunday afternoon package, which started in 2023. The deals are 11 years long, but the NFL can opt out of the deals after the ‘29 season (for ESPN it’s a year later). The NFL is almost certain to re-open the deals given the sky high TV ratings for the game, and the lucrative NBA television and streaming deals signed in July 2024.
So while Shell exudes optimism that the massive rights hike in the offing is no big deal, his company reported a widening loss of $573 million for the fourth quarter. While the merger of Skydance with Paramount is less than a year old, and the company is controlled by the fantastically wealthy Ellison family, the limited balance sheet combined with the NFL price tag rising, could make a successful acquisition of WBD critical.
A merger with WBD would make the new Paramount a real player in streaming, pushing the combined company to over 200 million subs, putting it in the neighborhood of Netflix and Amazon Prime.
Paramount on the call stressed how the NFL cherishes CBS and Fox for its linear reach through their network of affiliate stations. And that has long been true. Whether that remains true as the linear world shrinks and streaming continues to take center stage is the big unknown. Thus far the NFL has given the Thursday Night package to a streamer, Amazon Prime, and smaller packages to Netflix and even YouTube. But the Sunday afternoon games so far have been untouchable in this sense.
As the NFL, however, expands globally, international reach is increasingly important for the league. And that is something the current Paramount can’t really compete with, with 79 million subs for Paramount+. Add in WBD’s 120 million plus HBO Max subs, and then they are in that international ballgame.
The NFL does pride itself on having most of its games on free TV (its more than 80 percent), so perhaps that bodes well for CBS and Fox to keep their Sunday packages. But given the NFL’s voracious appetite for more lucre, and the expansion of streaming, Shell does seem awfully optimistic.
Also on the call, Paramount’s David Ellison said UFC 324 on January 24 was the most watched exclusive event ever on Paramount+, with 7 million households. He called that pace ahead of expectations for Paramount’s new partnership with the UFC.
About Daniel Kaplan
Daniel Kaplan has been covering the business of sports for more than two decades. A proud founding reporter of SportsBusiness Journal, he spent the last four years at The Athletic.