Just as the COVID-19 pandemic brought a halt this spring to the NFL’s plan to hash out a new slate of rights deals well before the start of the 2020-21 season, a fall resurgence of the virus appears to have sidelined efforts to lock in the media packages ahead of the 2021 Super Bowl.
While conversations between the NFL and its legacy TV partners have continued throughout this season-unlike-any-other, a recent spate of positive tests and an attendant flurry of logistical challenges have nudged the rights chatter to the margins. The rescheduling alone has made a full-time job of the league’s coronavirus response; NBC’s Thanksgiving game was bumped thrice before landing in a Wednesday time slot normally dominated by Judge Judy and your local news, which in turn set off a cascade of calendar shifts in Week 13.
But scheduling pitfalls aren’t the half of it, and in the midst of a public health emergency there are things that even the hegemonic National Football League cannot control. Amid what had been the longest week in NFL history, the San Francisco 49ers were forced to bug out of Levi’s Stadium and decamp for Phoenix, where they will play two “home” games on the Cardinals’ turf. Should California governor Gavin Newsom issue a statewide stay-at-home order, the LA Rams and Chargers also will be scrambling for new digs.
With two-thirds of the regular season on the books, the NFL’s focus is on crowning a champion in Tampa on Feb. 7. (According to Roger Goodell, it will do so without resorting to a playoff bubble; in the event of a pathogenic flare-up, Super Bowl advertisers have been advised to keep Feb. 28 free.) But as the season has heated up, so has the virus—in November, 93 players and 171 team staffers tested positive, up from 43 players and 61 staffers during the previous month—and thus the rights talks have been tabled for the near term.
Which isn’t to say that the broad outlines of the sports world’s most lucrative media portfolio aren’t beginning to take shape. The consensus among football insiders is that the status quo will hold sway on Sundays, where the bulk of the ratings points and advertising dollars land each week. To the end user, the NFL viewing experience won’t be discernibly different in 2023 than it is now, even if CBS, Fox and NBC will have to spend billions more to secure their respective packages. Assuming a price hike of 80%, Fox will cough up $1.98 billion per year for its Sunday portfolio of regional and national windows, while CBS ($1.8 billion) and NBC ($1.72 billion) can expect similarly vertiginous payment schedules.
There’s no mystery as to why the three networks are looking to maintain their partnerships with the NFL, which, in an era of atomized audiences and dwindling commercial impressions, functions as TV’s last great reach vehicle. Aside from the advertising revenue earned during NFL games—discounting the dollars pinned to the Super Bowl, in-game inventory on Fox in 2019 generated $1.34 billion in ad sales revenue, per Standard Media Index data, while NBC raked in $850 million with Sunday Night Football, and CBS booked $788 million with its own NFL showcase—pro football allows broadcasters to command massive retransmission consent and reverse-comp increases from the pay-TV operators and the network affiliates.
In exchange, the NFL gets the highest-rated programs on TV, each presented by the best broadcast talent in the field. The league’s most-watched window, the national Sunday afternoon game shared by Fox and CBS, is currently averaging 22.9 million viewers, down just 2% versus the year-ago 23.3 million, while NBC’s production is TV’s biggest primetime draw. And while consistency may not make for a sexy headline, re-upping with the three networks will only serve to bolster the medium that guarantees the NFL its unmatched exposure.
More to the point, so much of the NFL’s success depends upon its regional product that it is in the league’s best interest to keep the present affiliate structure intact. Through Week 12, the localized windows on CBS and Fox are averaging 14 million viewers per game, or around 3.7 million more than TV’s most-watched scripted series, NCIS. Disrupting the conference structure—Fox’s NFC slate matches up perfectly with its affiliate markets, while much the same holds true for CBS’s AFC-inflected schedule—would only serve to upend the outsized impact the NFL has at the local level. And thanks to the cross-flex, CBS has the latitude to feature more of the NFC teams that tend to deliver higher ratings than their counterparts in the other conference. If it ain’t broke, etc.
As much as Disney’s ambitions have been scrutinized, the impending shift of Monday Night Football to ABC and an increasingly likely shakeup of the Thursday Night Football stewardship aren’t exactly monocle-popping developments. Simply put, ABC wants in on the Super Bowl rotation, the NFL wants to pull back from the eroding cliffside of the cable distribution model, and ESPN needs to hold onto some sort of viable football package if it’s to continue collecting $8.8 billion in annual affiliate fees. (Nice work if you can get it.) If there’s a genuine shakeup on the Mouse House front, it’ll likely come in the form of a deal to take NFL Network off the league’s hands. A relic of pay-TV’s gold rush era, when the NFL Net launched in 2003, 89% of American households subscribed to a cable or satellite-TV service. Today, the bundle’s penetration is lurking at around 60%.
As for the $12 billion Sunday Ticket package, AT&T has shown little interest in re-upping with the out-of-market service. The phone company, which as of the end of the third quarter had a debt load of $149 billion, is looking to offload a minority stake in DirecTV, where Sunday Ticket has been parked since 1994. ESPN+ and NBC’s Peacock are likely landing spots for the package, which, as Fox Corp. CEO Lachlan Murdoch noted last month during the company’s first-quarter earnings call, isn’t a great fit for linear TV. “It doesn’t work … under anything other than a subscription model,” Murdoch said when asked if Fox has any interest in Sunday Ticket. “It’s not really something that we would consider or have the business model to monetize.”
Taking Sunday Ticket over-the-top would be an investment in the digital future and a move to where the NFL hopes younger viewers will be hunkered down in significant numbers. (Season-to-date, 15% of the NFL’s primetime TV audience is made up of adults 18-49, while kids under 18 account for just 6% of the overall viewership.) And while the league is averse to retrograde motion, a move from DirecTV to OTT isn’t necessarily a step backwards. Limited to the satellite-TV platform, Sunday Ticket at the start of the NFL season was available to 13.7 million video subs, down from 16.8 million in September 2019. By comparison, ESPN+ has landed 10.3 million subs, up from 3.5 million a year ago, while Peacock, which gets a big leg up from parent company Comcast, has signed up 22 million subs since it launched in July.
If a digital disruptor such as Amazon or Google is to claim a stake in the NFL, Sunday Ticket is probably the best fit. Ignore the heavy breathing from the self-proclaimed futurists who would have you believe that a legacy broadcaster is about to be disenfranchised by one of the free-spending FAANG set; that none of these companies were invited to pitch NFL brass in June may be interpreted in any number of ways, but the league’s avowed preference for old-fashioned broadcast TV is in no need of parsing.
There’s enough data available to make a strong case for the notion that streaming live NFL games hasn’t caught on. Amazon Prime’s simulcasts of Thursday Night Football contribute 2% of the overall audience for Fox production, and that ratio is consistent no matter the platform. Fox and the NFL’s various digital properties delivered an average-minute audience of 562,623 streamers for the Thanksgiving Day game between Washington and Dallas, a crowd that was 1.85% the size of the linear TV audience (30.3 million).
And such has been the ratio since live sports were first made available via streaming a decade ago. For all the whiplash developments we’ve seen play out with user interfaces (before achieving its current form as the usurper of the American appointment-TV habit, Netflix used to mail physical copies of DVDs to subscribers’ homes), the usage stats haven’t budged.
Beyond the particularities of consumer behavior lies the specter of a government that’s been rudely awakened from a blissfully unaware slumber. If the various outrages of a few bad actors send the Feds sniffing around the FAANG shops—particularly in areas where unfettered data collection is concerned—does the NFL still make sense as an investment? If within the next five years the surreptitious harvesting of data is no longer a viable business model, how does a digital brand go about monetizing a multimillion-dollar investment in content?