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SBD/January 6, 2011/Media
ESPN Close To NFL Rights Extension Worth Nearly $2B Per Year
Published January 6, 2011
ESPN PUSHING FOR BROADBAND RIGHTS: As is part of all ESPN negotiations these days, the network is pushing forward on a “TV Everywhere” concept that includes broadband and mobile rights. The two sides still have not reached an agreement on mobile rights, however. Last year, Verizon signed a four-year, $720M sponsorship deal that includes the exclusive mobile rights to stream “Sunday Night Football” and NFL Network games, as well as the NFL RedZone channel. The NFL sees significant value in these types of rights and is guarding them jealously. The two sides have agreed that ESPN will hold onto key rights, including highlights and the NFL Draft, which has grown in stature since ESPN first started covering it in '80. The NFL had toyed with the idea of making the first few rounds of the draft exclusive to NFL Network, but ESPN will continue to carry it through the new deal. The potential deal comes as the NFL enters its CBA negotiations and sets up consistent and profitable revenue streams for the league. It comes after the league last year extended current partners NBC, CBS and Fox through '13.
INSIDE THE TALKS: The NFL and ESPN started talking about extending the deal around Labor Day, when an exclusive negotiating window opened in ESPN’s current 8-year, $8.8B deal. The window originally expired around Thanksgiving, but talks progressed far enough that the two sides agreed on an extension. Talks have reached the highest levels of both companies, with ESPN/ABC Sports President George Bodenheimer visiting NFL Commissioner Roger Goodell at the league’s Manhattan offices several times this fall. Teams led by ESPN Exec VP/Content John Skipper and NFL Exec VP/Media Steve Bornstein have handled most of the negotiations. Even before this negotiation, ESPN was paying the league much more than any of the NFL’s other TV partners. ESPN’s annual payout of $1.1B dwarfs the annual rights fees paid by Fox ($720M), CBS ($620M) and NBC ($603M). DirecTV pays about $1B a year for exclusive access to Sunday Ticket.
TWITTER REAX: Reaction to news of the prospective deal reached Twitter this morning, with the National Football Post’s Andrew Brandt writing, “Reports of $2B/yr ESPN-NFL deal, per @SBJSBD, show continuing power of NFL programming. Players' share in haul is key issue of CBA talks.” The AP’s Dave Goldberg wrote, “ESPN $2 bil SHOULD make labor agreement closer. But knowing way it works, it might divide 2 sides even more.” ESPN’s Ross Tucker: “Let's have a lock-out and screw this thing up!” But NFLPA Assistant Exec Dir for External Affairs George Atallah wrote, “Filed to the NFL is Having Cash Flow Problems Department: $2B MNF extension.” Meanwhile, Newsday’s Neil Best wrote, “Wow. Your cable TV $$$ at work. …Please don't blame your cable or satellite provider when bill rises to reflect ESPN (and others) paying big rights fees to sports entities.”