Note: This analysis is based upon data taken from Variety Intelligence Platform’s “Sports’ New TV Formula” special report, available exclusively for subscribers.
The NFL made headlines recently when it was reported that its opening bid in its media rights negotiations was to ask for double the current price. As detailed in Variety Intelligence Platform’s special report “Sports’ New TV Formula,” NFL rights are already the most expensive sports rights in the U.S.
Meeting the NFL’s opening gambit would mean ESPN’s “Monday Night Football” package, including two postseason games, would cost $200 million a game, something Disney has already dismissed out of hand. With reporting that the NFL has reached an agreement with Disney and details on the way later this week, VIP estimates seeing the rights increase along the lines of the previous renewal — which was a 72.3% rise from $1.1 billion to $1.9 billion — would see the new package in the ballpark of $3.25 billion annually.
The NFL is the biggest prize available on TV today, which is why large increases across the board will happen. Quite simply, there’s nothing else on television that can deliver massive audience reach at the scale of the NFL on a consistent basis.
The NFL’s TV partners know that losing NFL rights would be catastrophic to their bottom lines. Ad Week estimated in 2020 that the league’s regular season rights generate $3.3 billion in ad revenue for Fox, NBC, ESPN, NFL Network and CBS, with over another billion generated from postseason games.
When the new deals are announced, expect to see multicast rights included for the broadcast networks, for a premium markup. CBS, ESPN and NBC experimented with this several times this season, both on TV networks within the corporate portfolio and with streaming services (CBS All Access and Peacock). CBS’ Wildcard multicast to Nickelodeon netted 2 million viewers, which will be important as the NFL looks to grow the next generation of fans, with differentiated multicasts set to continue.
VIP anticipates the announced multicast partnerships to be structured to reach as many fans as possible, both on a linear TV/streaming basis and with different focus and presentation available. On corporate lines, we expect the multicast deals to see associated AVOD services included (i.e., Pluto, Tubi, Peacock free) where relevant to boost reach among those without access to linear TV.
Standalone streaming services from Apple and Amazon are also looking to pad their offerings for maximum consumer appeal and will bid to capture new rights. While it would be wild for another connected TV set or device manufacturer like Roku or Samsung to bid for a package, it will likely be out of their reach.
This doesn’t necessarily mean streaming platforms will be in direct competition with the linear TV rights, for two reasons. The NFL has proven to be the master of conjuring up new rights, often non-exclusive (think how Fox shared “Thursday Night Football” with the NFL Network and Amazon and Verizon). Seeing more shared rights for streaming games will not be a surprise, but there is also the possibility of licensing highlights or studio shows to AVOD platforms within broadcaster footprints like IMDb TV, Twitch, Pluto or Tubi.
Among the current rights, there are two massive opportunities for a streaming service to add NFL coverage to its offering. The first is Verizon’s current deal for cell, tablet and computer streaming via Yahoo! Sports for all televised games. VIP firmly expects these rights to go to a major streaming service like Amazon or Apple, with the strong chance that they are split into different packages.
A further premium could come from any package being made exclusive to a platform. Currently, Verizon’s digital rights are available to anyone to watch via Yahoo! Sports and, with the NFL known to extract extra when viewership is to be restricted (see the original deal taking “Monday Night Football” from broadcast to cable or Verizon’s prior digital rights, exclusive for Verizon mobile customers), would come with a premium fee.
NFL Sunday Ticket is also on the market. This represents a prime rights opportunity for a streaming service with deep pockets (i.e., Amazon, Apple or Google), especially if a bid included the option to unlock Sunday Ticket to subscribers. Currently, Sunday Ticket is offered as a premium add-on for $293.94 to DirecTV subscribers, but it isn’t hard to foresee a future where a streaming service looking to grow either offers it free as part of its subscription or at a severely discounted monthly rate, making the money back via advanced advertising.
VIP’s overall expectation, increases aside, is for the broadcast rights to remain in their current homes, albeit with multicast partners added, for new digital rights to be created, for there to be some change with current digital packages and for Sunday Ticket to migrate to a streaming platform.