The NFL on Thursday announced a slew of new media rights deals that further cement the league’s status as the most valuable property on television. Here’s what it means for viewers, the league and the media companies forking over billions to stay in business with football.
Q: Who will broadcast NFL games?
A: Sundays and Mondays will look very similar for NFL fans, with CBS continuing to carry the predominantly AFC package, and FOX carrying its traditional slate of games involving NFC teams. NBC will broadcast the Sunday night game, and ESPN will hang on to Monday Night Football.
ABC will also enter the Super Bowl rotation. Expect ESPN to deliver its “Megacast” concept to the Super Bowl, meaning several different feeds will be available to fans on its cable channels and streaming service, ESPN+.
Streaming services ESPN+, Peacock (NBC) and Paramount+ (CBS) will also carry games.
Thursday night is where fans will see the biggest change, with Amazon getting exclusive streaming rights to those games. Local markets will still air games over broadcast TV, but other fans will need to be Amazon Prime subscribers (or have a friend willing to lend their login) to watch.
Q: How long are the deals?
A: CBS, Fox and NBC inked 11-year deals, with ESPN signing up for 12 years, which will allow the deals with those networks to expire together at the end of the 2033 season.
Q: How much are the networks paying?
A: A lot.
Fox, CBS and NBC are doubling the amounts they are paying in their current deals, with each shelling out around $2 billion. ESPN, which currently pays around $2 billion for its Monday Night package, will pay around $2.7 annually. Amazon will pay around $1 billion for its right to stream Thursday night games.
The amounts are staggering, and they show just how tied to the NFL the networks are. This is especially true of Fox and CBS, which are smaller companies than Disney, which owns ESPN, and Comcast, which owns NBC. Fox will be paying annually around 10% of its current market capitalization, which is just above $20 billion. CBS will be paying around 3% of its current market capitalization, which is around $60 billion.
ESPN’s new deal looks slightly different from the others. Currently, it pays higher rights fees than CBS and NBC because it also gets access to highlights that fuel ESPN programming for much of the year. ESPN also pays a premium, according to some insiders, because it is the only network that takes the NFL’s games off broadcast TV, which has the largest reach of any media.
With Disney paying $2.7 billion, the two sides reached a compromise that will pay the NFL lots of money and allow Disney executives to say to shareholders that they held the line on the NFL’s demands.
Q: Why are they paying so much?
A: After a year in which sports TV ratings were down across the board, the NFL still maintained its dominance. The league delivered 33 of the top 50 TV audiences in 2020, including 14 of the top 20, according to data compiled by Sportico. If advertisers want to reach big audiences – even if those audiences are smaller than they have been in the past – sports, and more specifically the NFL, is increasingly the best place to do that.
Q: Thursday Night Football is here to stay, isn’t it?
A: Yes. The NFL introduced Thursday night games in 2006. CBS, NBC and most recently FOX have all taken turns as broadcasters. Fox currently pays an estimated $650 million for the package after signing a five-year pact in 2019.
The networks were less keen to bid on Thursday night games moving forward both because of the price increases for the other packages and because NFL Network and Amazon would likely have been simulcast partners. Without exclusive windows, it is harder to monetize the telecasts.
In turning over its Thursday night slate to Amazon, the NFL is trading reach for a bet on the future. The NFL televised one game exclusively on Amazon last season, which drew around 4 million viewers, much less than the average game on linear TV.
Q: Does Sunday Ticket have a new home?
A: Not yet. DirecTV currently pays around $1.5 billion annually for the package, which offers a full slate of out-of-market game to customers. That the package wasn’t announced with the others could suggest there isn’t as robust a market for it, though streaming services like ESPN+ and NBC’s, Peacock, are considered favorites to eventually land it.
Q: What do the deals mean for the future of watching football?
A: In announcing the deal, the NFL touted its expanded streaming presence, with games on Amazon, ESPN+ and network streaming partners. Both NBC and ESPN will have exclusive games on their streaming platforms, meaning fans will need to purchase them to watch every Sunday and Monday night game. CBS will also make all of its telecasts available on Paramount+, its streaming service. All three media companies hope to use the NFL to boost their subscribers.
But legacy media companies remain the predominant home of the NFL. The league has always prided itself on reaching the most fans, and the best way to do that continues to be broadcast TV.
The broadcast channels will likely increase the fees they charge cable companies to carry them over the life of the deal, meaning fans will ultimately pay for some of the higher rights fees. By giving some exclusive games to Amazon the league is also placing a bet, though a somewhat limited one, on the future of streaming.
Q: What does it mean for the league?
A: Dallas Cowboys owner Jerry Jones can buy an even bigger yacht, probably. Also, the salary cap will eventually rise, though it fell for the 2021-22 season. The Cowboys signed quarterback Dak Prescott to a four-year contract recently worth around $160 million, signaling that some players will also see a windfall from the new deals.
Q: What does it mean for other sports?
A: With media companies ponying up enormous sums for the NFL, there have to be cuts somewhere, right? Almost certainly. But it remains to be seen which properties might be affected. The NHL just announced a big new deal this week with ESPN and will sign another one in the coming weeks. Major League Baseball and the Southeastern Conference also consummated large rights deals last year. Major League Soccer and the Pac-12 Conference will be looking for new deals soon and may find the landscape stingier after the NFL’s bounty.
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