ESPN, NFL Formally Sign Eight-Year Rights Deal Extension Worth $1.9B Annually

ESPN and the NFL have signed an eight-year extension to their media rights agreement that is worth $1.9B per year, a whopping 63% increase over the average price of the current deal. A formal announcement of the deal, which was first reported in January, came earlier this morning. The deal will keep “MNF” on ESPN through the ‘21 season. It also gives ESPN a wide swath of digital rights that will allow the network to stream live games via broadband and tablets, as part of the cable industry’s “TV Everywhere” initiative. In terms of mobile phones, only Verizon will be allowed to stream “MNF,” as the league is protecting Verizon’s four-year, $720M sponsorship deal that it signed last year. Verizon also streams NBC’s “Sunday Night Football” and NFL Network games, plus NFL RedZone. What is also noteworthy is what is not part of the deal. ESPN will not get any playoff games as part of the deal, at least not initially. The contract allows for ESPN to carry a Wild Card playoff game at some point, but it is not set in stone. Neither ESPN nor ABC will be part of the Super Bowl rotation. The NFL has never agreed to take any of its playoff games off of broadcast television. A key aspect to the deal for ESPN is that it will receive many more highlight rights, which the network will use to launch several new NFL-themed studio shows. Earlier this week, ESPN announced programming changes that moved shows like “Jim Rome Is Burning” from ESPN to ESPN2. That freed up space for ESPN to launch new shows, including one starring Pro Football HOFer Jerry Rice and another co-hosted by Suzy Kolber and Chris Mortensen.

INSIDE THE TALKS: Negotiations started a year ago, around Labor Day ‘10. Word of the pending deal was first reported in January, when the two sides agreed on the broad outline of a deal, but the labor situation that led to a four-and-a-half-month lockout put further negotiations on hold. ESPN and the NFL returned to the negotiating table soon after the NFL’s lockout ended. The NFL now is expected to turn its attention to selling a new eight-game package of early-season games, a package that has attracted interest from NBC, Turner, ESPN and Fox. Then, the NFL will look to renew its broadcast deals. Even before the current 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). Those rights fees could eclipse $1B per year.