Perhaps one of the biggest developing stories in sports media, and media more generally, is the NFL potentially renegotiating its media rights deals well before its 2029-30 opt-out clauses.
NFL commissioner Roger Goodell recently floated the idea publicly, just months after Puck’s John Ourand first reported the possibility. Of course, an early negotiation is designed to accomplish one primary goal for the league: generate more revenue from its TV deals.
The league and most media observers would agree, the set of deals the NFL signed just five years ago are already well undervalued, despite generating in excess of $10 billion annually. Under the current agreements, the NFL would need to wait four more years (or five years for ESPN’s deal) to exercise its opt-out options and bring its inventory back to market. By negotiating extensions with its current broadcast partners, the league can increase its media revenue sooner, but won’t have the optionality of a full opt-out, which would allow the league to shop its inventory to other companies.
In other words, the NFL will need its current broadcast partners to play ball in order to get this done. Last week, NBC Sports president Rick Cordella indicated his network is all ears when it comes to a potential early negotiation. And now, Fox Sports CEO Eric Shanks is also indicating his company is more than happy to entertain talks with the league.
“With probably every media company that’s in sports, there are things in your core portfolio where you’re willing to talk about an extension at any time,” Shanks said during a recent conference co-hosted by Puck and media research firm MoffettNathanson.
“Probably as soon as the last deal was signed, people were looking for certainty, and figuring out what would be the elements that would make the NFL use that [opt-out] option. Getting through that option sooner rather than later? It wasn’t really news to us. We’ve probably been talking to the league for a year about how and when we want to engage.”
That’s not all that surprising to hear. Prior to reporting that the NFL may seek to negotiate extensions as early as next year, Fox Corporation CEO Lachlan Murdoch characterized the league’s 2029 opt-out as “an opportunity” to “deepen [Fox’s] relationship” with the league.
Of course, the devil is in the details for networks like Fox and NBC. The NFL is the most important programming on television, and owning broadcast rights to the league is borderline existential for legacy broadcasters. But what is the price of stability? How many years will the NFL be willing to tack onto its current deals in exchange for more money? And just how much more money are we talking?
One thing is certain. Legacy networks are in no position to play hardball with the NFL. If the league says jump, networks will ask how high.
For the league, negotiating early ensures its legacy broadcasters are still financially robust enough to pay competitive rates. By 2030, the pay TV bundle may be so diminished that the NFL’s current partners can’t compete with tech giants like Amazon, Google, and Netflix, thereby pricing would-be bidders out of the market.
It’s fair to say that the NFL’s current broadcast partners are preparing as if extensions will be reached well before the league’s option. And, at least for Fox, the early negotiations don’t come as a surprise.