SBJ/Nov. 8-14, 2010/This Week's Issue
ESPN, NFL reopen rights deal
Published November 8, 2010
The NFL and ESPN are in the middle of an exclusive negotiating window that could change important parts of the network’s record-setting $1.1 billion annual rights deal with the league.
The window was triggered around Labor Day and remains open up to Thanksgiving. As part of ESPN’s deal, signed in 2005, the two sides were allowed to reopen the contract to negotiate different terms.
It’s not known which side initiated the trigger, but both groups have interest in renegotiating aspects of the deal. ESPN is looking for enhanced mobile rights, while the league wants the ability to offer a full-season’s worth of NFL games to its own network or, potentially, additional cable partners.
Both ESPN and the NFL declined comment on the talks.
ESPN has a deal to carry “Monday Night Football” games through 2013, and that is not expected to change. But the company is talking to the league about acquiring more mobile rights, according to sources familiar with the talks.
ESPN wants the mobile rights to stream “Monday Night Football” games as part of the cable industry’s “TV Everywhere” concept, which allows authenticated cable subscribers to watch full channels via broadband and mobile. Currently, ESPN only has such a deal in place with Time Warner Cable, which last month started streaming the entire ESPN channel to its broadband customers.
Plans to expand the service to mobile customers are still to come.
The problem is, though, that ESPN doesn’t have the rights to stream its “MNF” schedule — or any live NFL games, for that matter — to mobile devices. That means ESPN’s “MNF” games would be blacked out to Time Warner Cable subscribers who want to watch on mobile devices when the operator starts streaming ESPN to mobile devices.
At issue is the NFL’s four-year, $720 million deal that grants Verizon exclusive mobile rights. The NFL wants to protect that deal, which is the league’s most valuable sponsorship agreement.
Another issue preventing the league from granting these rights to ESPN is the NFL’s relationship with Time Warner Cable. So far, TWC is the only cable operator that has the right to stream ESPN, ESPN2 and ESPNU to its broadband and mobile subscribers. But lingering bitterness exists between the NFL and the cable operator, which still has not cut a deal for NFL Network or NFL RedZone. Because of that, sources say, the NFL is not going out of its way to release rights that would benefit Time Warner Cable.
ESPN is not the only one that would benefit from re-opening the deal, however. The NFL is looking to relax a “cable exclusivity” clause that ESPN put in the original contract. The clause says that no other cable network can carry a full-season’s schedule of NFL games.
NFL Network has carried an eight-game schedule since 2006.
As the NFL looks to expand to an 18-game schedule as early as 2012, the league wants the flexibility to shop additional packages to cable networks, such as, potentially, Turner Sports, Versus and FX.
It is not clear how a renegotiated deal would affect ESPN’s rights fee, which remains the highest of all the league’s television partners, but it’s likely any additional rights would come with an increased fee.
Earlier this year, ESPN successfully negotiated a bundle of broadband, mobile and international rights. It was not allowed to stream “Monday Night Football” to a wireless carrier, however (see SportsBusiness Journal, March 29-April 4).