US$110 billion over 11 years, five different broadcasters and contracts which legislate for a media landscape that is changing at a rapid pace. Patrick Crakes, the former senior Fox executive and now media strategist, calls them “genius” deals and says they answer the question as to why NFL commissioner Roger Goodell takes home such a hefty salary.
Here, SportsPro takes you through each contract, deal by deal, and offers Crakes’ big picture thoughts on their long-term impact.
Amazon
Fee: US$1 billion to US$1.3 billion (depending on reports)
Length: Ten-year deal beginning in 2023
Deal highlights:
- Takes bulk of Thursday night games
- NFL’s first ever exclusive digital package
- Prime to air one pre-season game
- NFL Network retains enough Thursday games to satisfy distribution contracts
- Thursday night games broadcast free-to-air in teams’ home markets
Crakes’ take:
With Amazon’s last deal it experimented for a while and drafted alongside. It often drops the experiment, primary ticketing for example was going to kill Ticketmaster, but when it does find something it likes, it strikes. So with Whole Foods for example, it made a huge investment because it needed that level of investment to get a return.
So Amazon experimented, got comfortable, hired some pretty good people over there like Mike Hopkins and Marie Donoghue, then came to the conclusion that the experiment needed to get upped because it was seeing some results they liked.
This deal is absolutely strategic, it’s a billion dollar investment, but most importantly it’s a ten-year term. That’s a commitment. It doesn’t mean it goes and buys other sports, it’s Amazon, old models don’t apply. That includes the idea that Amazon need more than this, it may make it be like ‘we did it’ and let’s continue the project in another area. I don’t think anyone should draft any ideas of this. The deal was made possible by Fox saying, ‘we don’t want to do Thursday night anymore’, and the other broadcasters saying it doesn’t provide value at the price the NFL wants, whereas it did have value for Amazon.
The NFL originally wanted to do a traditional deal and would have been happy with Fox if it wanted to pay US$1 billion. With Fox walking away, it probably forced the NFL’s thinking quite a bit.
Amazon is paying the least of all the partners, but it is paying a premium to compensate the league for a move to a new platform which, even though it’s Amazon, is still uncertain. The viewing on Prime Video has never been quantified by Amazon and how this whole experiment turns out will be fascinating. I’m sure it will be successful but at the same time it’s a different business model. The NFL is taking some risks as they are still sequestering themselves on a national level behind a retail paywall. It’s an evolution and also a risk.
Amazon has come in and filled a strategic gap for the NFL, which has been eight years in the making.
ESPN/ABC
Fee: US$2.7 billion a year
Length: Ten-year deal that begins in 2023 (two bridge years under existing framework offer more games on ESPN, ESPN+ or ABC)
Deal highlights:
- ABC to air the Super Bowl in 2026 and 2030, plus additional playoff game annually
- Takes total games in contract from 17 to 23
- One exclusive national game on ESPN+ per season
- All games to be made available on ESPN+
- Flex scheduling for Monday night package
- ABC gets three Monday night games a season as part of double-header broadcasts
- Extensive highlights
- Rights to annual draft event
Crakes’ take:
ESPN has developed the assets to do well out of this deal. Of all the media companies that have developed digital assets it is the furthest along with figuring out how to make all that work together.
ESPN was the best positioned to tell the NFL: ‘We already have a lot of your content, we need these pieces. We’ve been paying a lot and have been for a long time. We’re paying a big bump here but these pieces are important. We’re going to provide a significant amount of value.’
Disney still pay the most, but it now has content that works across each one of its platforms – ESPN, ABC and ESPN+ – to sort out, in conjunction with the league, where it all goes.
Typically a Super Bowl is worth US$300 million to your budget, so just getting two Super Bowls helps justify the economics. That’s quite a shot in the arm every year.
Building ESPN+ with one exclusive game, the option to simulcast more, getting a playoff game, being able to monetise with established distribution partners via retransmission fees by adding the 17th game, the Super Bowl and the playoffs for ABC and ESPN, these are crucial pieces to figuring out Disney’s future. Disney’s future is definitely in the digital space, but the established space has a role as well.
CBS
Fee: US$2.1 billion (depending on reports)
Length: Ten-year deal beginning in 2023
Deal highlights:
- CBS to host broadcast the Super Bowl in 2024, 2028 and 2032
- Retains AFC package
- All games to be streamed via Paramount+
- Ten double-header broadcasts a season
- Retains Thanksgiving Day game
- Adds second wild card game in 2024, 2029 and 2033 seasons
Crakes’ take:
CBS has an established streaming platform in what was CBS All-Access and is now Paramount+. While it may not have any NFL on a pay-TV network, Paramount+ and streaming NFL games via affiliates is something it’s going to do. It’s a conversation for CBS and its affiliates from the economic perspective, but Paramount+ is not currently a profitable platform. In some ways, that experiment – because it still is an experiment – and how that ends up getting monetised is what we’re doing here.
The new NFL deal will definitely help build – in conjunction with their established broadcast television network – the streaming platform that will help build a larger business. CBS takes its most important media property, leverages it to new platforms while preserving established platforms.
One of the questions to be answered over the next 11 years is what are CBS’ broadcast affiliates – and the retransmission fees they pay for NFL content – getting in return for providing the bulk of the funding for these deals when their audience is being shifted to Paramount+? We know what that looks like under the established system but it’s unclear what that new negotiation looks like and that’s part of the evolution. CBS looks to be moving first in that matter and that will be a story to pay close attention to. There will be some anger, some cooperation, but I’m confident there will be a negotiation and a business agreement that enables affiliates to feel comfortable with streaming.
This deal sees CBS retain content for their established platforms and use that to build the new ones. The established systems build the new one. It’s messy and complicated, but it’s the bridge to future.
Fox
Fee: US$2.25 billion
Length: Ten-year deal beginning in 2023
Deal highlights:
- Fox to host broadcast the Super Bowl in 2023, 2025, 2029 and 2033
- Retains NFC package
- Gives up Thursday night package
- Legislates for regional streaming via Tubi
- Fox Bet gains future betting operator status when the NFL opens the category
- Fox to broadcast Christmas Day games
- Adds additional linear, digital, alternate feed and interactivity rights
Crakes’ take:
When Fox sold its entertainment assets to Disney it opened up space because it didn’t need to programme entertainment in primetime all the time and it had a budget laid in for those economics. So suddenly the NFL’s Thursday night football package had a real partner that was invested in it. What Fox found is that the games didn’t have all the incremental value they were looking for and with the new deal the NFL was looking to get the value up higher. Giving up Thursday night games isn’t bad for Fox, it was an experiment and it can allocate those economics over to Sunday.
One of the interesting things about Fox and CBS is that people ask why an NFC and AFC package are separate. Well, the answer is that the economics that pay for the media rights fees for all these deals comes from retransmission fees. For the Sunday networks, they have invested in an affiliate body that optimises NFL distribution across the conferences. Fox has a strategy to buy stations in NFC markets. Retransmission is a local phenomenon negotiated by local stations. So, if you own a network in New York City and you’re negotiating a retransmission fee with a distributor for that affiliate – not that network – then the fact the Giants play and you have a certain number of guaranteed games every year on your affiliate gives a boost to retransmission.
If you were to break that up then distributors would want to change the way they’re paying you. That would occur across Fox and CBS, changing the economics, and you can’t do that. It’s a great example of how retransmission fees drive this deal.
After selling their entertainment assets to Disney, Fox has become very tied to the pay-TV model. Fox right now is an all-in bet on pay-TV bundles, both as they are now and recreations in the digital space. What this deal has enabled Fox to do is begin to take Tubi, a platform it bought for US$450 million that’s advertising-supported, and begin to experiment with NFL content.
This deal helps to solidify what gives them value – retransmission fees via pay-TV bundles – and sets the stage for Tubi to become something more – a real opportunity to become a streaming business. Fox will be thrilled. It got what it wanted. Fox will continue to have the number one show in media in the NFL’s late Sunday window, and it will have the basis for building a streaming service on its own terms.
NBC
Fee: US$2 billion
Length: Ten-year deal beginning in 2023
Deal highlights:
- NBC to host broadcast the Super Bowl in 2026, 2030 and 2034
- Retains Sunday night package
- All NFL broadcasts on NBC to also be aired via Peacock streaming service
- Peacock gets one additional exclusive regular season game a year from 2023 to 2028, with streaming service adding dedicated NFL channel
- NBC to broadcast one divisional playoff game a season
- Network to broadcast at least one wild card game a season with an additional game from that round added in the 2023, 2026 and 2031 campaigns
- Retains season kick-off game
Crakes’ take:
The number one show in television is Sunday night football. NBC has a unique corner on that market with fully established platforms. Renewing that cornerstone of its business is significant and it achieved that.
NBC also gained the rights to use Peacock in conjunction with the network to build the NFL, it has some exclusive games on Peacock and it has the right to simulcast. That will build the incremental story as NBC continues to invest in Peacock – it has moved a lot of content onto it – so this is just an extension of that strategy with the most important media product in the world.
So NBC got exactly what they wanted, which is why it paid. There was never any doubt about the value of the NFL for NBC. The real question was ‘how do we continue to have that value on these established platforms while learning to build for the future?’ For NBC, it will be very happy to have both in hand and now look forward to other projects.
Patrick Crakes‘ quotes were edited for brevity. You can listen to his thoughts on the new NFL rights deals in full in this special edition of the SportsPro Podcast: