In 2021, the National Football League signed an 11-year, $111 billion\u00a0media rights deal. In July, the National Basketball Association signed an 11-year, $77 billion\u00a0deal of its own.<\/p>\n
What\u2019s next? Well, not much all that soon.<\/p>\n
While Ultimate Fighting Championship and Formula 1 have deals expiring in 2025, the vast majority of major college and professional sports have recently signed long-term media rights deals with U.S. TV networks and streamers.<\/p>\n
Welcome to the sports media rights doldrums. Or, the calm before the storm.<\/p>\n
The NFL can opt out of its current deal with all of its media partners \u2014 except\u00a0Disney, which has a slightly different deal structure \u2014 after the 2028-29 season. By that time, driven by the pace of change among the largest media companies, the entire landscape could be significantly different than it is today, dramatically altering how much revenue leagues generate and who is paying.<\/p>\n
\u201cAnyone telling you with any degree of certainty the NFL is going to opt out or not is bananas,\u201d said Daniel Cohen, executive vice president of global media rights consulting at Octagon. \u201cThere\u2019s so much you can\u2019t predict even two years out, never mind six.\u201d<\/p>\n
The NFL\u2019s opt-out decision, while years away, is the next potential tectonic shift that will influence the balance of power in media. It\u2019s possible the NFL could choose to end deals with longtime Sunday afternoon media providers such as\u00a0Fox\u00a0and\u00a0Paramount Global\u2019s\u00a0CBS in favor of streamers, such as\u00a0Apple,\u00a0Amazon,\u00a0Google\u2019s\u00a0YouTube or even\u00a0Netflix.<\/p>\n
It will also be a significant driver of future NFL team valuations. On Thursday, CNBC will reveal its Official 2024 NFL Team Valuations list, ranking all 32 professional franchises.<\/p>\n
Given the current state of media, with\u00a0Paramount Global\u00a0agreeing to merge\u00a0with Skydance Media by mid-2025,\u00a0Warner Bros. Discovery\u00a0actively looking for partners\u00a0to build scale and share the cost of content, and\u00a0Netflix\u00a0jumping into live sports with its\u00a0acquisition of Christmas Day NFL games, the potential bidders for games in four to five years could be dramatically different than today. That will determine how much of an increase the NFL may get on its next rights deal.<\/p>\n
\u201cThere probably will be companies that don\u2019t exist today that will merge to create new competitive bidders,\u201d said former CBS Sports President Neal Pilson, who founded sports media consulting firm Pilson Communications. \u201cOther deals, like the NBA, are a data point, but the NFL is its own marketplace. The programming is the honey. It\u2019s all driven by the popularity of the NFL.\u201d<\/p>\n
Another determination of how much sports media rights deals will escalate in the future will be the state of the dwindling pay TV bundle. There have been 4 million pay TV customer losses this year to date, \u201ca mindboggling total for just six months,\u201d according to a recent MoffettNathanson report.<\/p>\n
Live sports has long been the glue holding the bundle together, and a majority of viewership still comes from traditional TV versus streaming.<\/p>\n
The economics of the bundle \u2014 still a cash cow for content providers like Disney and\u00a0Comcast\u2019s\u00a0NBCUniversal \u2014 have driven rights increases for decades. Meanwhile, streaming has yet to turn a profit for most media companies.<\/p>\n
Traditionally, the reach of broadcast networks, particularly in rural areas that still don\u2019t have consistent high-speed internet, has caused the NFL to value Fox, Disney, NBCUniversal and CBS \u2014 all of which own broadcast networks. Most NFL games air on national broadcasters.<\/p>\n
The NBA has also replaced its partnership with\u00a0Warner Bros. Discovery, which doesn\u2019t own a broadcast network, with NBCUniversal, which does.<\/p>\n
But four years from now, it\u2019s possible the ongoing shift to streaming, combined with Big Tech\u2019s deeper pockets, will convince the NFL to view broadcasting as anachronistic rather than essential.<\/p>\n
On the other hand, if streamers become the sole distributors of sports, they\u2019ll have all the market power, which could stifle valuations.<\/p>\n
\u201cIf you put all your eggs in the streaming parties\u2019 baskets, and if legacy media is hobbled to the point they can\u2019t pay for media rights anymore, then you\u2019re giving streamers a lot of market power,\u201d said Shirin Malkani, co-chair of the sports industry group at Perkins Coie.<\/p>\n
Bank of America recently put together a chart of recent media rights deals and their estimated values. Some of the numbers are slightly different than reported figures.<\/p>\n
The National Hockey League\u2019s deal with its media partners lasts\u00a0through the 2027-28 season.<\/p>\n
Major League Baseball\u2019s deal is\u00a0up in 2028\u00a0\u2014 and will likely be shaped more by the expiration of the players\u2019 collective bargaining agreement in 2026 than the state of the media industry. Still, the vastly changing regional sports business, on top of the traditional TV landscape, could make MLB a litmus test for the rights deals that follow.<\/p>\n
The PGA Tour\u2019s\u00a0media deal\u00a0runs through 2030. NBCUniversal owns the Winter Olympics until 2030 and the Summer Olympics until 2032. NASCAR\u00a0signed a contract\u00a0late last year with media carriers until 2031. ESPN locked up the College Football Playoffs\u00a0until 2031. Apple inked a deal for Major League Soccer\u00a0until 2032.<\/p>\n
The long-term nature of these deals has given the current media ecosystem some certainty. That\u2019s a benefit for the leagues, media companies and pay TV providers, who all rely on the consistency of cash flow.<\/p>\n
\u201cMy advice to clients is that if you\u2019re in a deal that feels fair right now, or that is analytically fair to good, don\u2019t go searching for something great,\u201d said Octagon\u2019s Cohen, who represents several professional sports leagues in their media deals. \u201cThings will keep evolving over the next six years, so it\u2019s best to hold onto a good deal.\u201d<\/p>\n
Disclosure: Comcast\u2019s NBCUniversal is the parent company of CNBC.<\/em><\/p>\n<\/p>\n In 2021, the National Football League signed an 11-year, $111 billion\u00a0media rights deal. In July, the National Basketball Association signed an 11-year, $77 billion\u00a0deal of its own. What\u2019s next? Well, not much all that soon. While Ultimate Fighting Championship and Formula 1 have deals expiring in 2025, the vast majority of major college and professional […]<\/p>\n","protected":false},"author":0,"featured_media":9054,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-9053","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9053","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=9053"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9053\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/9054"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=9053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=9053"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=9053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}