In the last calendar year networks have taken a huge hit in revenue, between chord cutters and the inability to produce original content as regularly scheduled due to the covid 19 pandemic. However these networks understand that by far NFL games are still far and away their greatest asset for ratings and draw the highest revenue in terms of ad space sales. That said, even with a loss in revenue in 2020, networks are expected to double down on the NFL for the right to retain their cash cow.
The main big deals are with NBC, Fox, ESPN, and CBS. Fox currently hold the rights to the NFC conference games and with Tom Brady now in Tampa the price of cocoa surly goes up, even if he potentially only has a couple years left. Tom alone is a huge draw whether we love him or hate him. Let’s also not forget Fox holds broadcasting rights to Thursday Night Football, which it shares with the league owned NFL Network. Patrick Mahomes, Lamar Jackson, and probably Trevor Lawrence are likely to get premium national spots along with Pittsburgh and some of the other usual suspects, so I don’t see CBS getting a handout with the AFC package either.
NBC will likely be giving a huge deal to Drew Brees to join their coverage for Sunday Night Football and ESPN is retooling their booth for Monday Night Football. Neither company should be expected to back away from renewing their rights to cover the league. Unlike NBC, CBS, and Fox, the ESPN deal expires at the end of this upcoming season. It is possible however that ESPN, owned by Disney, may try to split or simulcast games to sister network ABC, which is also owned by Disney. ESPN’s biggest SportsCenter of the week as far as ratings goes is the one directly following MNF. They could be in a position to have a marquee program on ABC if they can get a deal like this done and fully control the Monday night slate. This move would also put Disney in the Super Bowl broadcasting rotation since as of now, only networks carrying games on national television may be considered for.
One of the things driving the urgency to renew deals with the network is the fact that the league itself took a bit hit in revenue with merchandise sales down and a major loss in ticket sales, the NFL will likely lower the salary cap per team by upwards of 12.5% and create a little salary cap chaos for each team in the process. If new deals can be reached, the league can funnel that money right into the revenue pool shared by ownership, the league, and the players union and likely have a positive impact on the salary cap for this season and seasons to come. Without striking a deal before the calendar year though, would hamstring them in to a drop in the cap.
Another big wild card to look out for to jump up into the mix is The Sunday Ticket. Direct TV has been crushed by chord cutters and cheaper streaming options now available and they will be bowing out of coverage as they are now owned by AT&T and are expected to focus on other content. Look for Amazon, Peacock, ESPN+, and YouTube, to be in the mix to be the company that can sell directly to the consumer, non local/national games at the a la cart basis or better.
Even with ratings drops this year across the league this year including the Super Bowl, which saw its lowest numbers in seven years, the league is still poised to command record breaking deals with networks. As these networks are scrambling to hold on to viewers switching over to digital services, new means of viewing are being launched by them which contain exclusive properties that can’t be seen on the national level without paid subscription. It’s likely that the cost to the networks will nearly if not surely double to continue on with coverage rights and it will of course have a trickle down affect on those wanting to buy ad space. At a now almost $700,000 per 30 second ad spot and nearly 70 paid ads per game, you do the math… we’re talking around $50 million in ad revenue per game and now we’re adding an extra regular season game along with an extra playoff game per conference. Oh by the way player salaries are drastically lower in the playoffs making those games hand-over-fist money makers for the league and owners. It’s truly the game behind the game.
Only a matter of time before the league and networks hammer out a financial rendezvous… It’s A Football World, we’re all just passing through.
Feature photo credit: Sports Media Watch