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Volume 23 No. 18
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NFL presses toward massive new media deals, with formal negotiations near

Included in the upcoming negotiations are the rights for two extra playoff games that will be added this season.
Photo: espn images
Included in the upcoming negotiations are the rights for two extra playoff games that will be added this season.
Photo: espn images
Included in the upcoming negotiations are the rights for two extra playoff games that will be added this season.
Photo: espn images

Even as business in the United States has ground to a standstill over the past week, TV networks still were preparing to negotiate billions of dollars worth of media rights deals with the NFL in the coming months, according to multiple sources.

League executives held informal conversations with media executives last week about the coming rights packages, leading those in the media business to prepare to start more formal negotiations at some point in the next three months.

There has been speculation that the NFL and networks would wait until the coronavirus scare abates before focusing on these deals. Given how fast the coronavirus situation has changed, it’s impossible to pin down exactly when the negotiations will start.

But after talks with league executives last week, media executives are not expecting the NFL’s original timetable to move much. That means it’s likely deals will be finalized before the end of the year.

Such a move would fit with the NFL’s approach to conduct as much offseason business as possible during the coronavirus shutdown. The league’s collective-bargaining agreement was signed March 15, the same day, for instance, that Illinois closed all bars and restaurants to dine-in customers.

The league severely restricted travel among team employees and players but stuck with its originally scheduled start to free agency last week. The NFL also said it would move ahead with its annual draft in April, even as it had to cancel the public events planned in Las Vegas. 

There is an impetus for the league to start negotiations this year: The league has to negotiate rights for the two extra playoff games that will be added this season.

ESPN currently pays $100 million for the rights to its wild-card playoff game, which simulcasts on ABC. Sources said the league is expecting about the same amount for those two extra games. 

The coronavirus outbreak has caused stocks to crash, which has hurt the financial standing for the media companies prepared to bid on NFL rights (see chart). Even still, sources with media companies say they are sticking with the plans they developed months ago, which could see a rights fee increase in the 60%-70% range.

There’s a reason that the networks are prepared to bid on NFL games despite so much uncertainty in the market. The NFL has been the most predictable driver of television viewership for years. Last year, NFL game windows accounted for a whopping 78 of the top 100 shows on all of television. Plus, the NFL made up nine of the 10 most-watched shows on TV and 23 of the top 25.

The new union contract gives NFL owners the right to add a 17th game as early as 2021. 

The league has some advantages in terms of timing. It doesn’t have to sign its media deals this year. If it finds that the market is too uncertain, the league can push negotiations into 2021.

The NFL’s current deal with ESPN ends after the 2021 season. ESPN pays an average of $1.9 billion per year for the rights to “Monday Night Football.” 

The NFL’s deal with Fox, CBS and NBC end the following year, after the 2022 season. Fox pays an average of $1.1 billion per year for its Sunday afternoon package and $550 million per year for its “Thursday Night Football” package; CBS pays an average of $1.1 billion per year; and NBC pays an average of $950 million per year.

The league’s out-of-market “NFL Sunday Ticket” package also ends after the 2022 season; DirecTV pays an average of $1.5 billion for those rights. And its NFL Mobile deal with Verizon ends in 2022; that’s worth $550 million per year.

The optimism inside media companies last week, even as they moved forward without any live games, was palpable. They pointed to sports programming as the best way to get the country to rally together — several pointed to former President George W. Bush’s first pitch at Yankee Stadium following the Sept. 11 terrorist attacks.

Media executives contacted for this story have faith that the market will rebound eventually. When it does, and leagues start playing sports again, viewers will return.

Staff writer Ben Fischer contributed to this report.