New NFL Megadeal Is Traditional TV’s Last Hurrah

New NFL Megadeal Is Traditional TV's
Cheyne Gateley/VIP

With the NFL agreeing to new rights deals with their existing broadcast partners at a whopping 79.5% increase — or an additional $4.54 billion a year — one thing is clear. This will be the final time traditional TV carries the majority of the NFL season.

The deals include Amazon taking full control of the majority of “Thursday Night Football” games — some will remain simulcast on NFL Network — as well as multicast options for traditional broadcasters’ streaming services, which VIP predicted.

The pivot to streaming signals that this will be broadcast TV’s last hurrah with the NFL, for the full regular season at least. NFL Commissioner Roger Goodell indicated as much when he spoke about the new deals, stating that they represent a seminal moment for the distribution of NFL content. In other words, the floodgates have been opened.

The sheer scale of the increase will hasten the demise of the ever-shrinking pay-TV customer base. Someone has to pay for the extra money TV networks are spending to keep their NFL games. Advertisers will be asked to chip in, but the bulk of the increases will be passed along to consumers.

Considering the cost of cable has been a consistent reason for cutting the cord since the phenomenon began picking up speed in 2015, the wisdom in taking on massive new expenses that will significantly increase costs is questionable.

The only reason for it is that execs at the broadcast networks know their day is coming and are determined to make hay while the sun shines, eking out as much profit as possible before the digital transition to streaming is complete.

Preparations for the transition are already underway. The major broadcasters all negotiated for their streaming platforms to be included for multicasts in the new deal. Fox making their games available for free on Tubi is perhaps the soundest logic, as it will enable the greatest possible streaming audience for advertisers and reflects the reality that a cord-cutter simply has to buy an antenna to watch the games for free in any case.

ViacomCBS went the opposite direction, with NFL games only available via Paramount+’s most expensive $9.99 a month package. Why a viewer wouldn’t go and get an OTA antenna, presumably one with the ATSC 3.0 4K signal that should be widespread by 2023, instead of paying $50 across the season seems to have escaped ViacomCBS execs. As such, VIP expects for some games to end up multicast on Pluto TV within 2 or 3 years of the new deal, in an effort to reach the greatest audience.

There still remain two media deals to be negotiated, with the potential of bringing the biggest shockwaves. “NFL Sunday Ticket” is looking for a new home. An outside bet gaining momentum would be this ending up on ESPN+, given the recent NHL deal showing Disney’s determination for ESPN+ to own the out-of-town subscription packages across multiple sports.

The digital streaming rights package for which Verizon currently pays around $450M for are also up for negotiation. These are for streaming the majority of games on tablets, cell phones and computers but not via connected TVs and devices. VIP’s anticipation is that rights will significantly increase, with YouTube, Amazon and Apple battling it out.

This will be a precursor to where most of the regular season NFL games end up when the next renewal hits in 2033. The anticipated demise of traditional TV will be in full swing then, and while it’s possible that the broadcast networks could team up to multicast one or two “games of the week” then, it will be tech-media hybrids ruling the roost then. The die has already been cast on that note as the NFL begins its digital transformation.

Read the full special report