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Thursday, April 1, 2021

Report: The NFL Can EXIT Broadcast TV Rights Deal


On March 18, the NFL unveiled massive TV rights deals with Disney, NBCUniversal, Fox, ViacomCBS and Amazon set to pay the league more than $100 billion over the next decade. But there’s a chance it could get even more expensive.

According to The Hollywood Reporter, an overlooked piece of the deal could force the rights holders to pay the league even more, or allow new bidders — say, tech giants like Google or Facebook — to come in and steal those rights away.

It wasn’t in the NFL’s official announcement regarding the TV rights agreements, but the league has an option to opt out of the deals with NBC, CBS, Fox and Amazon after seven years (the 2029 season), and Disney after eight years (the 2030 season). The TV partners don’t have the same ability, a source confirms to The Hollywood Reporter.


In other words, if the NFL thinks it can get more than the $10 billion-plus per year it will reap under the new contract, it can force talks at that time. Morgan Stanley’s Ben Swinburne notes that the opt-out option creates “risk for the broadcasters on content cost inflation.” So what’s behind the opt-out?

It appears to be twofold: On the one hand, there is a good chance the pay TV bundle will keep falling out of favor with consumers. “If current cord-cutting trends persist, by the middle of this contract, there could be more homes outside the bundle than in the bundle,” MoffettNathanson’s Michael Nathanson noted in a report about the new deals.

That could force the NFL to look elsewhere to find the broadest possible audience. The other reason for the opt-out is mostly hypothetical for now, but nonetheless tempting for the league: the rise of sports betting.

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