NFL Finally Starts Talking Financial Terms With Networks for Mammoth TV Rights Deal

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The NFL’s incumbent TV network partners have been put on notice. The price tag for a deal spanning at least eight to 10 years is essentially double the fees charged for the various packages in the previous contract negotiations struck in 2011.

The league and top executives at ESPN, CBS, Fox and NBC have been in active talks for months on setting a long term contract extension that is sure to shatter industry records for rights fees.

But while talks have been ongoing, NFL executives only in recent days presented the financial terms of its separate negotiations to renew NFC conference rights with Fox, AFC conference rights with CBS, the “Sunday Night Football” package with NBC, ESPN’s “Monday Night Football” as well as “Thursday Night Football,” now at Fox and the league’s own NFL Network. ESPN’s pact expires after the 2021 football season; the other deals run through the 2022 season.

Sources said that even as the NFL aims to jack up the price, the league is looking to whittle down some of the elements in previous packages although the details on those changes were still sketchy.

Representatives for CBS, NBC, ESPN, Fox and the NFL declined to comment.

There had been some expectation that the NFL wanted to wrap rights talks as early as the fall of 2020 but had to devote much of its attention to managing the 2020-2021 season through the coronavirus pandemic. Now, with a 2021-2022 schedule to devise and a need to address the 2021 salary cap at hand, league officials are turning their gaze back to the rights deals.

Executives from both Fox Corp. and Walt Disney Co. were asked about the rights talks in calls with investors this week, and both suggested there has been some recent focus in their ongoing discussion with the league. “I don’t want to go into the detail of the NFL negotiations that we continue to be in – we’ve been in for a while. We hope to bring those to a conclusion in the near to medium-term,” said Fox Corp. CEO Lachlan Murdoch during the company’s Q4 earnings call on Feb. 9.

A source close to the situation said the sides have been negotiating every other aspect of the proposed contract but the financial details. That has been taken as a strong indication that the league is focused on securing the status quo among its most important business partners. The one change sure to come is the sunset of DirecTV’s carriage of “NFL Sunday Ticket,” which allowed die-hard football fans the chance to view any game on the schedule regardless of location. The satcaster now owned by AT&T has had only downward momentum and is expected to give up the $1.5 billion “Sunday Ticket” franchise, which was one of the company’s biggest selling points at launch in 1994. That offering is expected to shift to a streaming option that the NFL Network will market directly to consumers, possibly in connection with a digital partner such as Amazon. DirecTV’s “Sunday Ticket” deal runs through the 2022 season.

It’s been no secret that the NFL is expecting to command record shattering increases. Despite the modest turnout for the Super Bowl and the consistent 10%-12% drop in NFL viewership this past season, pro football telecasts still tower over most programs in primetime. NFL telecasts are consistently among the top-rated telecasts and one of the few reliable vehicles for delivering a mass audience of men in coveted demos.

But this round of NFL negotiations comes at a time when the largest media conglomerates are focused on reinventing their businesses and launching direct to consumer platforms. Morever, the majors are dealing with the economic quakes and shakes of the pandemic-battered economy. For a change, maintaining NFL rights may not be the utmost priority even for ESPN parent Disney. Disney CEO Bob Chapek made a specific comment on Thursday during Disney’s quarterly earnings call that cast doubt on Disney’s willingness to shell out for NFL. ESPN has carried “Monday Night Football” since 2006, when the franchise shifted from ABC.

“We’ve had a long relationship with the NFL. If there’s a deal that will be accretive to shareholder value will certainly entertain that and look at that,” Chapek said during Disney’s quarterly earnings call. “Our first (priority) will be to look and say ‘Does it make sense for shareholder value going forward?’ “

Disney has been hoping to increase its NFL presence, seeking a way to get into the NFL’s Super Bowl rotation, which is currently aired on CBS, NBC and Fox in turn. Disney has in recent months showed off “mega-cast” formats, in which It airs NFL games tailored to particular audiences, such as ABC’s more general viewership and Freeform’s younger crowd, along with ESPN’ sports-focused cohort.

Under the previous round of TV pacts set in 2011, ESPN paid about $1.9 billion a year for 17 “Monday Night Football” games, making it the costliest of the NFL packages. CBS and Fox have paid about $1 billion a year since the 2013 football season while NBC is just under that at about $950 million. The networks were already having trouble turning a profit on NFL games; there’s no doubt that anything close to a doubling of those fees would make that even harder if not impossible.

Fox Corp. executives have been hinting that they are ready to part ways with “Thursday Night Football.” The network set a five-year, $3 billion deal in 2018 for an annual package of 11 games, plus another six that Fox Sports does not telecast but produces for NFL Network.