Why The NFL Could Reap More Than $126 Billion In TV Money By 2033
ESPN—which broadcast its Super Bowl preview show from Disney California Adventure in Anaheim in 2022—is just one piece of the NFL's lucrative media puzzle.
LEONARD ORTIZ/MEDIANEWS GROUP/ORANGE COUNTY REGISTER VIA GETTY IMAGES)The league’s current TV and streaming deals come with a massive upside for its billionaire owners regardless of the ratings.
Live sports is the king of TV, and pro football is the king of sports. Over the next decade, the NFL is guaranteed $125.5 billion ($3.92 billion per team) in television money. But the league is going to end up raking in more—likely much more—when you look at how its media deals are structured (see table below).
For starters, unlike the NFL’s previous Sunday Ticket deal with AT&T (worth $1.5 billon a year), its deal with Alphabet, which will broadcast games on YouTube, is only for residential rights. That means that on top of the $2 billion a year the league will get from Alphabet, it should get another $150 million to $200 million a year through 2029 for the NFL’s commercial rights (for hotels, bars, restaurants, etc.).
NFL TV DEALS 2023
In March, the NFL and RedBird Capital Partners announced the formation of EverPass Media, a new platform that will hold the exclusive rights to distribute NFL Sunday Ticket to bars, restaurants, hotels and other commercial venues in the United States, starting with the 2023 NFL season. The annual payment from Alphabet will be flat at $2 billion a year, according to league sources, with the payment on the commercial side contingent on subscriber targets. One NFL owner told Forbes that he believes the commercial rights could be at least $300 million by 2029.
In addition, suppose the NFL’s TV ratings soar and its rights become far more valuable than when it signed these latest media agreements. In that case, the league has the option to pull out of its existing deals with Amazon, CBS, Fox and NBC after the 2029 season, and with ABC/ESPN after the 2030 season. Doing so would give the NFL an opportunity to get bigger even payments from the networks, or perhaps substitute a partner or add an additional partner, like Apple, to its already robust media plan.
AVERAGE NFL BROADCAST VIEWERSHIP VS BROADCAST PRIME TIME AVERAGE
On the other hand, if NFL ratings or opportunities with additional media partners do not warrant the league opting out of its existing agreements, the league has the right to extend its deal with Disney through 2033, which would add another $2.7 billion to its coffers.
Given how NFL games have performed over the past two decades versus traditional prime-time broadcasts, however, the pessimistic scenario seems far less likely, and this win-win bigger strategy will only add more value to the most valuable American sports league over the next ten years.
