Among the NFL’s current media partners, Fox is likely the most reliant on maintaining its relationship with the league.
With Paramount winning the Warner Bros. Discovery sweepstakes (pending regulatory approval), Fox is by far the smallest of the NFL’s five primary broadcasters. Without the NFL, Fox could fairly be considered a boutique cable news operation with a handful of owned-and-operated affiliates nationwide. Sure, that downplays the company’s other investments like Tubi, or its minority stake in Flutter (the parent company of FanDuel). But realistically, the NFL is the entire ballgame for Fox.
And Fox has gone to great lengths to signal that it wants to remain in the NFL business if/when the league decides to renegotiate its media rights deals before its contractual opt-out options at the end of the decade.
Fox CEO Lachlan Murdoch recently told investors that the company would “rebalance” its sports portfolio so it could afford whatever price increase the NFL demanded. That could mean deciding not to renew its MLB when it expires come 2028, or not pursuing World Cup rights after this summer’s tournament.
Last year, before the NFL signaled it intends to renegotiate its deals in the next year or two, Murdoch said he viewed the league’s 2029 opt-out as an “opportunity” for Fox to “deepen its relationship” with the league.
So it came as a bit of a surprise when Murdoch, appearing at a Morgan Stanley media conference on Monday, struck a slightly different chord. The Fox CEO suggested that the company is already paying “market price” for the NFL, despite some Wall Street analysts suggesting the league could command nearly twice its current rates if it renegotiated now.
“The prices were renegotiated only three years ago. They went up, I think, over 100% three years ago. We think our current pricing is at market,” Murdoch said, noting that if the price of NFL rights were to increase, those costs would likely be indirectly passed onto consumers via higher distribution fees that cause the pay TV bundle to become more expensive.
Additionally, Murdoch noted that Fox still has “four more years on [its] contract before any kind of presumed opt-out would take effect,” the suggestion being that if the NFL were to ask for an unreasonable increase, Fox would be prepared to play out the next four years of its contract before reengaging with the league.
Now, that could simply be lip service designed to make sure the NFL doesn’t get too out of line with its pricing. Equally likely, it could be something Murdoch said to ease investors’ concerns that Fox might overpay to keep the NFL.
To be sure, Murdoch still went to great lengths to praise Fox’s partnership with the league.
“We’ve had a great relationship with the NFL for over 30 years. For over 30 years, that relationship has been mutually beneficial to both Fox and the NFL. We’d certainly look to continuing that mutually beneficial relationship going forward,” the Fox CEO said.
But so far, Fox has “not had any material conversations with the NFL about a renewal,” though the company is clearly prepared to engage when that time comes.
It shows the tricky balance a company like Fox must strike. They need to have the NFL, but they can’t afford to overpay for it. That’s why the conventional wisdom would suggest that a company like Fox will accept a slightly higher annual rights fee for less inventory than it currently owns. Doing so would keep costs manageable and, hopefully, buy the network some level of stability into the 2030s, before it has to negotiate its next NFL deal.