How the NFL’s $ 100 billion TV deal will have an effect on school soccer
In a year of major economic and legal changes for major college sports, one of the major developments took place not in Indianapolis or Washington, DC, but on Park Avenue.
Two months ago, the NFL announced a huge new media rights deal valued at more than $ 100 billion – a price tag that is guaranteed to permeate the sports world and affect the Power Five for years if not decades.
“The NFL deal will cause problems for other properties because of the rights to the oxygen it consumes,” said Patrick Crakes, owner of Crakes Media Consulting and former senior vice president of programming, research and content strategy for Fox Sports.
“It’s a big deal. One group of sports will continue to do very well: Major League Baseball, the NHL. The power fives are on deck. They fit in the box, and the dealers really want that. “
The SEC has already leaked the media rights. In December, the conference moved the Game of the Week package from CBS, its longtime home, to ESPN / ABC for about $ 300 million a year.
The deal created an exclusive partnership between the SEC and Disney that already included ownership of the SEC network and a package of ESPN games.
Other conferences are waiting at the negotiating table to have their turn: The Big Ten’s current media rights expire in 2023; The Pac-12’s contracts with Fox and ESPN run until 2024; and the Big 12 deals will close in 2025.
All three are anticipating massive paydays to keep up with the SEC and support the sports department’s budgets, which are sure to come under more pressure in the post-pandemic world.
Except that their current and future broadcast partners will have to spend billions less after signing deals with the NFL starting in 2023.
ESPN is on the hook for $ 2.7 billion a year. CBS, Fox, and NBC are paying in the $ 2 billion range (individually), and Amazon agreed to spend $ 1 billion on Thursday night’s game.
The transactions total USD 10 billion per year and over 11 years to more than USD 100 billion.
Overall, the NFL is reportedly doubling the value of its media rights.
“In a way, a rising tide lifts all boats, and the NFL is the Queen Mary: it has set the standard for what prime, coveted real estate can generate,” said Ed Desser, president of Desser Media Inc. and the former director from NBA TV and the league’s strategic planning department.
“If you’re at a college conference and you’re the next most attractive football product after the NFL – what the conferences are put together – then you’ve upped the ante. The contracts signed eight or ten years ago are dated and do not reflect the value of your underlying rights.
“The downside is that every major media company is involved in the NFL and the money has to come from somewhere.”
It comes from familiar places.
The hotline interviewed half a dozen sports media professionals on a series of articles examining the impact of the NFL deal on college football in general, and the Pac-12 in particular.
Several analysts were ready to comment on the recording. some weren’t. But they all quickly made the same point: there are no new players on the NFL’s broadcasting contracts.
The league retained the same five partners (ESPN, CBS, Fox, NBC, and Amazon) that it currently has.
Turner has not signed up.
Neither does Facebook.
Or DAZN or Apple or Netflix or Google.
“Some Tier 1 conferences were expecting a 100 percent increase in their rights since Facebook and DAZN would be there, but I don’t think that can be said anymore,” said Crakes. “Who will accept these contracts? It looks like the mainstream media. “
The mainstream media with a $ 100 billion hole in its wallet.
The consequences were made clear by no less an authority than Comcast / NBC chief executive Brian Roberts, who recently spoke of “tough decisions” that would follow the NFL deal.
Shortly after these remarks by Roberts, it was announced that the NHL was leaving NBC, their home for 16 years, and bringing their package of world-class games to ESPN.
Will NBC replace the NFL with a college football partnership built on her longstanding marriage to Notre Dame?
Will CBS aggressively pursue a Power Five deal after losing the SEC’s “game of the week”?
And crucially, will Amazon’s exclusive agreement with the NFL mark the beginning of an aggressive pursuit of football media rights?
“I don’t think the NFL deal can be used to figure out that Amazon is going to do anything similar to college football,” said longtime sports media advisor Chris Bevilacqua, co-founder of Bevilacqua Helfant Ventures.
“Buyers will decide where they want to draw this line. The NFL deal kept all incumbents in place, and each incumbent has their own strategy for transitioning from wholesale to retail. Everyone has to pursue the opportunity. It’s still at the top of the first inning. “
The NFL’s deal with CBS helps illustrate the change.
Historically, there have been two links in the broadcast chain: 1) from the NFL to CBS and 2) from CBS to their distributors (Comcast, Verizon, Charter, AT&T, etc.) and to homes across the country.
But now there may be a single link: the AFC games set for the CBS package will be available directly to consumers through Paramount +, Viacom / CBS’s new streaming service.
CBS is both a rights owner and a content distributor.
The Sunday Night Football package will also be available on NBC via the Peacock streaming service.
“At a high level, what is happening in the market is a fundamental change,” Bevilacqua said. “The digital cat is out of your pocket. Rights will become more valuable in the future.
“The good news is that high quality sports rights are groundbreaking again. The question is: who are the have and who are the have? “
The SEC is one of the haves (as if there were any doubts), but what about the rest of the Power Five?
The list of major sports properties whose contracts expire in the coming years includes the English Premier League, NASCAR, Major League Soccer and the UFC.
How much is allocated to the Big Ten, Pac-12, and Big 12? (The ACC’s contracts span the decade.)
One expert said: “The NFL took $ 100 billion. An additional $ 50 billion in media rights will be added to the pipeline over the next five years. It is not an unlimited war chest. “
Every analyst interviewed by the hotline believes the Big Ten are largely isolated from market forces – that the size and passion of the audience, headed by the Ohio State valuation machine, will mean an enormous payday.
The conference could respond to the SEC’s exclusive agreement with Disney by going all-in with Fox, which owns the Big Ten Network.
Or the Big Ten could split their rights between Fox and ESPN and either CBS or NBC – or any combination of them.
“I bet it’s a 50 percent increase,” said one analyst. “People are going to make big bets on the Big Ten.”
What about the Pac-12 and Big 12?
Both face a critical strategic decision:
Should they renegotiate early, before the rights expire – and earn money in front of the likes of the Premier League and NASCAR?
Or should they wait for the contracts to expire?
Leaving early limits your options: you could only negotiate with existing partners.
Waiting for the deals to expire would allow them to go on the open market, despite one devoted to other sports properties having massive resources.
Starting with the billions that go to Park Ave.
“I’m pretty optimistic about my chances for the next round,” said Desser. “That doesn’t mean everyone will benefit if you take $ 10 billion (annually) off the market. It’s more positive than negative, but not unlimited space. “
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