The NFL's Unstoppable Rise: Will Other Sports Be Sacrificed to Feed the Beast?
It's no secret that National Football League (NFL) games are the crown jewels of television, commanding astronomical prices for broadcast rights. Broadcasters are practically falling over themselves to secure these coveted slots. Now, with the NFL hinting at an early renegotiation of its current media rights deals, the price tag for NFL games is expected to skyrocket sooner rather than later. The league could be looking to shake things up and renegotiate its existing agreements, which currently run through 2033 with an opt-out in 2029 (with the exception of the ESPN deal, which has a 2030 opt-out), as early as this year.
But here's where it gets controversial... The NFL has shrewdly recognized that its current deals are significantly undervalued. They're not keen on waiting until 2029 to capitalize on their immense popularity. Annually, the NFL rakes in over $10 billion in domestic media rights revenue, accumulating to a staggering sum exceeding $100 billion over the life of its current contracts. While these figures seemed reasonable when the agreements were inked in 2021, it's become abundantly clear that the NFL could command an even more substantial sum.
And this is the part most people miss... A prime indicator of this undervaluation is the NBA's recent media rights deals, which total a colossal $75 billion over the next 11 years. Astonishingly, despite the NFL consistently drawing much larger viewership numbers than the NBA, two of the NBA's new media partners are shelling out more for professional basketball than they are for the NFL. For instance, NBC pays $2 billion annually for 'Sunday Night Football' but a whopping $2.45 billion for its NBA package. Similarly, Prime Video pays $1 billion for 'Thursday Night Football' but escalates to $1.8 billion for its NBA games. ESPN's expenditure for its NFL package is roughly on par with what it pays for the NBA.
Given these figures, it's undeniable that the NFL's current deals are a bargain. And the NFL, being a shrewd negotiator, is certainly not leaving money on the table. Consequently, broadcasters are gearing up for discussions with the NFL much earlier than anticipated. For established networks like Fox and CBS, retaining NFL rights is almost a matter of survival for their financial health. If the NFL dictates terms, Fox and CBS would be wise to comply.
The NFL's demands might be considerably higher than current expectations. Fox, for example, currently pays an average of $2.25 billion per year for its Sunday afternoon NFL package. During a recent quarterly earnings call, CEO Lachlan Murdoch revealed the company's strategic approach should the price of NFL games indeed increase. Murdoch stated that Fox is prepared to 'rebalance' its sports rights portfolio to accommodate a more expensive NFL package. In simpler terms, this means other sports properties on Fox might face the chopping block to free up funds for the escalating cost of NFL rights.
Looking at Fox Sports' current lineup, there are some significant sports rights that could be leveraged to offset the higher NFL costs once their current contracts expire. The FIFA World Cup immediately comes to mind. The upcoming summer's quadrennial event will be the last under Fox's current agreement with FIFA. While the exact cost for the 2026 World Cup is not public knowledge (the network secured a no-bid contract after the 2022 tournament was moved to winter), Fox previously paid $425 million for four tournaments between 2015 and 2022. This was a remarkable price for the world's biggest sporting event. However, it's highly probable that the World Cup rights will be significantly more expensive for the 2030 and 2034 tournaments, with streamers and networks alike vying for them. If Fox is prioritizing cost savings for the NFL, competing with potential bidders like Netflix, which has already secured rights to the next two Women's World Cups, seems unlikely.
If Fox is seeking substantial savings, its most costly non-NFL media rights deal is undoubtedly its Major League Baseball (MLB) package. Fox disburses approximately $729 million annually for an MLB package that includes the World Series, League Championship Series (LCS), and regular-season games. Fox has been the exclusive broadcaster of every World Series since 2000. However, MLB is set to put its media rights up for market in 2028, with expectations of a considerable increase. The World Series represents Fox's sole annual championship broadcast of a major sport, as they share Super Bowl rights with three other networks, and the World Cup only occurs every four years. While it would be a significant sacrifice for the network's sports division, it would also yield substantial savings. Considering Fox's long-standing relationship with baseball, it seems more plausible that the network would pursue a renewal for MLB in 2028 rather than for the World Cup.
Beyond the NFL, college football is a cornerstone of Fox's programming. It's improbable that Fox would reduce its college football inventory, especially given its ownership stake in the Big Ten Network. More likely, Fox might consider divesting from ancillary properties like non-World Cup soccer. Fox holds deals with CONMEBOL for Copa America, UEFA for the Euros, CONCACAF for the Gold Cup, and a limited package of non-exclusive MLS games. If the network opts out of renewing with FIFA for the World Cup, it's conceivable they would also let go of some of these other soccer rights.
Fox's motorsports deals appear to be secure. Its NASCAR agreement, which includes 14 Cup Series events such as the Daytona 500, extends through 2031. Furthermore, Fox recently acquired a stake in Penske Entertainment, the owner of IndyCar, ensuring that this inventory will remain with the network.
This scenario highlights a stark reality for other leagues: broadcasters are increasingly reliant on the NFL, which consumes a larger portion of their budgets, leaving less for other sports. We've already witnessed ESPN taking steps to avoid overpaying for sports rights, as seen recently with Formula One and MLB. This same dynamic is now poised to impact other leagues.
What do you think? Is it fair for the NFL's immense popularity to dictate the fate of other sports properties? Should networks prioritize the NFL above all else, or is there a balance to be struck? Share your thoughts in the comments below!
