The NFL is in the catbird seat when it comes to renegotiating its rights deals with television networks and streamers. And given the outsized importance of the league when it comes to attracting viewers and sponsors, media companies are already preparing their war chests.
Networks and streamers have increasingly found that they can’t live without the NFL. The league has maximum leverage as the most popular sports and entertainment property in the country. And the fact that they currently have partnerships with ESPN, Fox, CBS, NBC, Amazon, Netflix, and Google means there are plenty of potential suitors and bidders when it comes to the league being able to name its price.
But just what might that price be?
Puck‘s Matthew Belloni took a deep dive into how the rising cost of doing business with the NFL will affect American media giants when it comes to taking up a much larger percentage of their available funds. From the point of view of the media companies, it’s a simple math problem. The NFL will take up more available dollars than ever before, leaving less to spend on entertainment properties and other sports leagues. That’s why every league not named the NFL caught between the NBA’s massive media rights windfall and the upcoming NFL payday is looking to get to the table as soon as possible before the money runs out.
Belloni cites MoffettNathanson research that projects the NFL’s annual media rights deals could reach a whopping $15.9 billion in annual revenue, which would be a 58% increase over their current deals.
Currently, the league makes just over $10 billion in revenue from media rights partners. ESPN pays the highest annual fee at $2.7 billion, Fox is at $2.2 billion, CBS at $2.1 billion, NBC at $2 billion, and Amazon pays $1 billion for Thursday Night Football. When you add in the carveouts that the NFL has made by selling additional games to Netflix and YouTube and deals like Sunday Ticket, the price keeps getting higher and higher.
But could that potentially be underselling what the NFL could earn? Keep in mind when the NBA inked its new deals with ESPN, NBC, and Amazon, it earned a whopping 164% increase. Given the NFL’s huge popularity advantage, seeing only a 58% increase in comparison would be surprising.
The Ellison family takeover of Paramount Skydance is accelerating the timeline of these renegotiations thanks to a clause in the CBS deal with the NFL. And already, the political game is beginning with the FCC getting involved in protecting the interests of conservative friends that own linear networks trying to stem the tide of a streaming takeover.
Will networks wait out the NFL and take their chances in a few years? Or will they feel the pressure to pay up now? It will be the most important and most expensive blinking contest in the history of sports.