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Roger Goodell and the NFL made headlines with their new $110 billion TV deal. (Photo by Rich … [+]
The NFL’s dominance of the sports and television landscape is not coming to an end anytime soon.
On Thursday, the league announced a new 11-year, $110 billion deal with its television partners that will begin in 2023. For perspective, the previous deal — which runs from 2014 through 2022 — was inked for $27.9 billion back in 2011.
The NFL’s newest deal further illustrates the power that the sports league has in the media industry.
“The NFL continues to be a must-have for media companies. And this is a reflection of that,” says Rob Simmelkjaer, a former sports business anchor of ESPN and NBC Sports who is currently the founder of Persona, a video platform dedicated to question and answer conversations.
“Everyone who was in the NFL business wanted to stay in the NFL business. No one who was in that business was willing to lose those rights,” continued Simmelkjaer.
While the money is obviously a massive upgrade from the previous deal, the television partners will remain roughly the same. ESPN, CBS
However, there are notable key differences. First of all, ESPN will have greater flexibility with scheduling. Not only will the sports media giant have flex scheduling beginning in Week 12, the network will also now feature a Saturday doubleheader in the final week of the season.
Furthermore, ESPN will now broadcast the Super Bowl through ABC twice during the course of the new deal. The last Super Bowl broadcast on ABC was at the conclusion of the 2005 season.
“ESPN is a big winner here. The digital rights that they got from this deal — plus the postseason games — is better than anything they ever had before,” says the former sports business anchor.
“If you had to point at one of the media companies that got the best deal compared to the one they had before, it’s ESPN,” concludes Simmelkjaer.
That’s not even mentioning how ESPN is in play to potentially take over the NFL Sunday Ticket package once that current deal runs out after the 2022 season with AT&T’s
“It’s conceivable,” Simmelkjaer says of ESPN’s chances of nabbing NFL Sunday Ticket. “They have the resources. It would be a game-changer for their direct-to-consumer audience.”
Other than ESPN’s clear gains on the new deal, the second major difference in the new deal is that of streaming. Amazon Plus will now be the exclusive home of Thursday Night Football, which had previously been a staple of the NFL Network.
“All the networks know that having NFL rights is an absolute must-have if they’re going to build those direct consumer streaming services,” says Simmelkjaer.
“It’s sign of the NFL not giving up, but de-emphasizing their own cable network,” Simmelkjaer further elaborates of the Amazon Prime deal. “They have decided they’re in the business of collecting large rights fees from partners. They’re not in the business of trying to build a network that’s going to be a significant driver of revenue.”
Furthermore, ESPN Plus will now broadcast one game per season from London — which furthers the NFL’s expansion into digital streaming.
While many may not think of Netflix
“The biggest loser was Netflix,” states Simmelkjaer. “These companies are all coming after Netflix with their streaming services and their business. And they now have something that is one of the most marquee pieces of content in American entertainment that Netflix does not have.”
The next major point from this deal is that the NFL will further expand catering to the sports betting crowd.
Commissioner Roger Goodell made no secret of this upon the announcement of the NFL’s new television deal.
“We’re going to find ways we can engage fans with legalized sports betting,” said Goodell.
In other words, look for the league to incorporate sports betting into its broadcasts. The league can now speak openly about betting and start to integrate betting content into the presentation of their games.
“It’s what allowed them to get such a big increase in this round of negotiations,” Simmelkjaer says of sports betting. “Their partners saw the value in what sports betting is going to have for them in the way they sell sponsorships. Sports betting is a big part of why the NFL was able to get a huge increase versus their last deal.”
Simmelkjaer also points out how you may start seeing more shows dedicated exclusively to betting content — something which you may see pop up on streaming apps such as Peacock.
And while some observers may believe the NFL is trying to ease their fan base into a future where they pay to watch games — especially the marquee ones — the former sports business anchor predicts that this is not the case.
“They are still getting the vast majority of their revenue from traditional broadcast companies. I do not think this is the beginning of a shift to a world where all NFL packages are direct-to-consumer, pay-for-package services.
The league likes certainty in terms of what their revenue is going to look like. These types of deals give them long-term revenue certainty.”
The league’s new massive deal will also have clear financial gains for its players. While you may not see it for the first couple of years as the NFL looks to make up ground for their losses during the coronavirus pandemic year, the clear increase in players’ salaries will be seen by the end of the decade.
“These contracts are all backloaded so there isn’t a huge revenue hit in the early parts of these deals. In the late 20’s and early 30’s of this deal, you’ll see big increases in league revenue. It’s going to mean bigger contracts, bigger salaries,” explains Simmelkjaer.
And as hard as it may be to believe in 2021, we may see our first athlete who earns $100 million in salary for a single year, Simmelkjaer predicts.
“By the end of this cycle, we’ll see our first $100 million-a-year player. You can see that within the next 10 or 15 years — a quarterback — command that type of money.”