In a bold gambit, nonagenarian media magnate Rupert Murdoch dined with President Donald Trump in February to encourage federal pressure on his Fox Corporation’s most important business partner, the NFL.
According to a quad-bylined Wall Street Journal report, Murdoch and his top lieutenants “warned Trump that if streamers gained rights to more games, it would kill broadcast networks,” like Fox.
In the subsequent weeks and months, the FCC launched an inquiry into the fragmentation of sports telecasts, and the DOJ opened an investigation into the limited antitrust exemption granted to the NFL and other major professional sports leagues which allows them to centralize the sale of media rights between teams. The exemption is the federal statute most central to the NFL’s business operations, and any change to how the legislation granting it is interpreted, like suggesting the exemption should only apply to game telecasts distributed via broadcast networks and exclude telecasts exclusive to cable channels or streaming platforms, would directly threaten how the NFL conducts business.
To make this plea at the highest levels of government, Rupert Murdoch had to know the risks involved. NFL programming is the lifeblood of Fox Corporation, allowing the company to command lucrative retransmission fees from distributors and local affiliates, not to mention the advertising windfall that comes with airing Sunday football. Without the NFL, the future of Fox would be in jeopardy.
Murdoch’s meeting came at a high-stakes moment for his broadcast network. The NFL has been angling to renegotiate its media rights deals early in the hopes of securing annual fee increases from its broadcast partners that could amount to billions more dollars annually. Fox, by far the smallest NFL partner by market cap, would be particularly burdened by an increase of that magnitude.
As it stands, Fox’s deal with the NFL goes through the 2033-34 season. The network pays around $2.25 billion per year for the league. The NFL, however, possesses an opt-out following the 2029-30 season that would allow the league to drop Fox entirely and take its package of Sunday afternoon games to the open market.
According to previous reporting, the NFL was willing to drop its opt-out clause in return for a higher rights fee now, ensuring networks like Fox could continue to air games well into next decade. Per the WSJ report, networks have balked at the idea of paying more now without extending the current terms of their agreements past the 2033-34 season. The NFL reportedly “isn’t interested” in that idea.
The stalemate could potentially set the stage for heated negotiations come 2029, should networks roll the dice and choose not to revise the current terms of their arrangement beforehand.
The question will soon become whether Murdoch’s power play has paid off. In the short-term, it certainly has. Mounting federal pressure has, at the very least, delayed the NFL’s dealmaking process. Even kicking renegotiation down the road to next season would potentially save Fox more than a billion dollars this season. But the NFL is launching an offensive of its own.
Prior reports indicate the league sent its top media executives to meet with the FCC and lay out the reasons why changing the antitrust exemption would actually make matters of fragmentation worse, not better. The WSJ reports that NFL commissioner Roger Goodell held a phone call with White House chief of staff Susie Wiles (daughter of famed broadcaster Pat Summerall) where he expressed eagerness to explain why the NFL’s broadcast model “is the fairest among major sports leagues.”
It appears as if the NFL’s efforts have already borne fruit. The WSJ reports that the DOJ’s investigation is unlikely to result in a lawsuit against the league, and prior reports indicate the FCC’s inquiry will not result in any tangible action. And with recent reports indicating the NFL is expected to expand its partnership with Netflix, the league is not showing much concern for federal scrutiny.
Murdoch’s pressure campaign, then, could prove to be a fatal misstep for Fox long-term. Fox was already on shaky ground for any long-term NFL renewal given its small stature relative to its competitors in the market for NFL broadcast rights. Now, the league has plenty of reason to seek another partner come 2029 should Fox not pony up more money in the near-term.
Fox, for all intents and purposes, is putting all of its eggs in the broadcast television basket. The network is betting that, come 2029, the NFL will still see the value of broadcast television distribution, along with the expertise a network like Fox brings in producing those games for tens of millions of Americans every Sunday.
It’s not a crazy bet. But the stakes have certainly been raised by Rupert Murdoch leveraging his relationship with the President of the United States.
The NFL has not shied away from punishing media partners it has a strained relationship with in the past. Look no further than the quality of ESPN’s Monday Night Football schedules throughout much of the 2010s. Perhaps there could be similar retribution towards Fox when the schedule is released next week. In the same vein, however, ESPN has been able to repair that relationship to the point where the league now owns a 10% stake in the network, and the cable channel will air its first Super Bowl next February.
If there’s one truism in sports, it’s that the NFL will do whatever is best for business. Fox, for its sake, better hope it remains in the NFL’s best business interests over the coming years, or it could lose the league entirely.
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.