NFL Expected to Score On Next TV Rights Deal

In a rapidly-shifting TV industry, the NFL provides a much-needed source of ad revenue to TV networks. Analyst  Michael Nathanson of MoffettNathanson LLC notes that the demand for ad time on the NFL is a primary reason network and cable TV ad revenues grew by 1.2% in the fourth quarter of 2019, even as overall audience levels continued to decline, The L-A Times reports.

Nielsen data shows that viewing of cable and broadcast TV among the advertiser-favored age group of 18-to-49-year-olds dropped by 12% in 2019 as they spent more time watching Netflix, Amazon Prime and other streaming services.

While all of the parent companies with NFL rights are making their own major investments in streaming, they still have networks and TV stations dependent on advertising revenues and fees from cable and satellite operators who carry their channels. Keeping television’s most popular live attraction is vital to sustaining those businesses.

The NFL is such a powerful draw that when media companies enter a dispute with a pay TV company over carriage fees, the coming of a new season usually brings a resolution.

According to a number of media executives who spoke to The Times on the condition of anonymity, the consensus is that CBS and Fox will keep their Sunday afternoon packages currently at $1 billion a year. NBC has the Sunday night game, which is prime time’s most watched program, at $950 million a year, while Fox has Thursday at $660 million a year. All are expected to pay as much as 50% more in the next deal.

The one possible change is Walt Disney Co., which pays $2 billion for “Monday Night Football” on ESPN and is looking to get some games and a Super Bowl for its broadcast network ABC, where the franchise originated and aired from 1970 to 2005. While NFL games are expensive, they provide a massive promotional platform for other network programming, something ABC has missed since the Monday games were moved to cable in 2006.

There is talk of “Monday Night Football” moving to ABC. Disney is also expected to make a play for a Sunday game package. Or the league could carve out a new package out of the current inventory of Sunday games. Disney also still wants games for ESPN as well in order to command the high fees it gets from pay-TV operators.