It’s beginning to look like the distance between the NFL and its network broadcast partners in media rights negotiations is quite significant.
According to a report by CNBC’s Alex Sherman on Thursday, the NFL is seeking media rights fees “in the 100% increase range for its next rights deals, while media executives are more comfortable paying something closer to 25% more.” The news comes after a prior report from Sherman indicated the “midpoint” between the NFL and its broadcast partners was somewhere in the 50-60% range. These details now provide an idea of just how far apart the sides are in negotiations.
A 100% increase in rights fees would bring the NFL’s annual media rights revenue to about $20 billion among its five primary partners — CBS, Fox, NBC, ESPN, and Prime Video — up from about $10 billion now.
CBS, the only network reportedly in active negotiations with the NFL over the change-of-ownership clause triggered by Skydance’s purchase of Paramount last summer, would see its annual rights fee double from $2.1 billion to $4.2 billion if it agreed to meet the NFL’s target price. Conversely, the network’s annual bill would rise by a mere $525 million if the NFL agreed to a 25% increase.
Obviously, it’s unlikely either extreme will happen. As with any negotiation, the result will likely be somewhere in the middle. But the gap in asking price — nearly $1.5 billion per year for CBS — is stark.
These negotiations come at a precarious time for the NFL’s Sunday afternoon broadcasters, CBS and Fox, both of which are particularly exposed to the headwinds of cord-cutting and rely on NFL programming to float lucrative retransmission fees with distributors and reverse retransmission fees with affiliates.
Fox seems to have responded by leveraging its friends in high places, influencing the Justice Department to launch an investigation into whether the NFL’s antitrust exemption should apply to games sold to paid streaming services and cable networks. The political pressure could sway the league to strike deals with broadcast networks under more favorable terms. The NFL, for its part, already airs 87% of its games on broadcast television, a number that jumps to 100% in local markets.
But even as broadcast networks cry “Uncle Sam,” the NFL knows its leverage remains immense. For now, the noise in D.C. is just that: noise. Revoking the NFL’s antitrust exemption would accelerate the fragmentation of games far beyond what the current setup allows, which calls into question the credibility of threats to rescind it from those across all corners of the federal government.
What is clear is that both sides are playing hardball. The NFL is asking for a rights increase that it knows its broadcast partners cannot afford without jeopardizing their entire businesses, while the broadcast networks are bringing lawmakers and regulators into the fold.
The critical question now is whether these new deals get done this summer, as the NFL reportedly would like, or if its primary broadcast partners (perhaps sans CBS due to the change-of-ownership provision) hold out until 2030, when the NFL’s formal opt-out options hit.
As always, that will ultimately come down to dollars and cents. And right now, there are quite a few dollars-and-cents differences between where the broadcasters stand and where the league would like them to stand.
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.