The National Football League is on the verge of signing new rights deals with media partners that could see Amazon.com Inc. AMZN -2.89% carry many games exclusively and TV networks pay as much as double their current rate, people familiar with the matter said.
New agreements could be in place as early as next week, the people said. The television deals for the league’s Sunday and Monday franchises with Fox, CBS, NBC and ESPN are likely to run for as long as 11 years, they said.
ESPN’s deal would go into effect after the 2021-22 season while the Fox, CBS and NBC agreements would kick in after the 2022-23 season.
A deal with Amazon would result in a significant number of Thursday night games exclusively on its Prime Video platform and represent the league’s deepest foray into streaming, some of the people said. Those games wouldn’t be available on traditional television outside of the local markets of the two teams playing, they said.
Amazon has become an aggressive bidder for sports rights here and abroad. The company already has a relationship with the NFL as it has held streaming rights for Thursday night football since 2017. Those games have also been televised by the league-owned NFL Network and most recently by the Fox network, whose parent Fox Corp. FOX 2.88% shares common ownership with News Corp, the parent company of Wall Street Journal publisher Dow Jones & Co.
If completed, an Amazon deal wouldn’t take effect until after the 2022 season, when Fox’s current pact for Thursday night football expires. Fox is now paying $660 million a season for that package, The Wall Street Journal previously reported. If the Thursday games go to Amazon and there is no other video component beyond the local TV markets of the teams playing, that yearly fee Amazon pays could reach $1 billion, people with knowledge of the discussions said.
Amazon currently pays between $75 million and $100 million to stream Thursday games, a person with knowledge of the deal said. As with Fox, that contract still has two seasons on it. The NFL Network would continue to carry a handful of exclusive Saturday and Thursday games as its contract with distributors requires it to carry at least five games a season, people familiar with the league’s thinking said.
A deal with Amazon for most Thursday night games would solve a potential problem for the NFL. While Thursday games get strong ratings compared with any other programming, the high price tag was making it a tough sell with broadcasters who already carry NFL packages such as Fox, which analysts and industry insiders estimate loses $250 million a season. Prior to Fox’s deal, CBS and NBC shared Thursday games and their combined losses were more than $200 million, people familiar with those agreements have said.
The long-term deals might be the last time the NFL can command giant fee increases from its broadcast and cable partners amid fragmenting viewership and cord-cutting. Green Bay’s Dominique Dafney snared a touchdown pass on Jan. 3.
Photo: Charles Rex Arbogast/Associated Press
A move to put a chunk of NFL games—which typically dominate television ratings—exclusively on a streaming platform isn’t without risk. Amazon carried one game exclusively last year and drew an average audience of fewer than five million, much lower than the typical NFL game on broadcast television or ESPN’s “Monday Night Football.”
The league is trying to strike a balance between embracing new platforms and the revenue they represent while keeping most of its games on traditional television.
Fox Corp.’s annual average fee for its Sunday afternoon games is expected to jump to around $2 billion from the current $1.1 billion, the people familiar with those negotiations said. ViacomCBS Inc. VIAC 3.19% likely will see its average fee per season of Sunday afternoon games go from $1 billion to the $2 billion range, the people said.
The new deal for Comcast Corp. CMCSA -0.96% ’s NBC is also expected to more than double from the average of $960 million it pays per season now to around $2 billion, a person familiar with that pact said. NBC’s streaming service Peacock will also carry one game exclusively and will simulcast NBC’s Sunday night games, the person said.
The league in addition expects to get a big increase in fees from Walt Disney Co. DIS -0.87% ’s ESPN, people familiar with the matter said.
The fee increases come after a season in which ratings were down for the regular season, playoffs and Super Bowl. Network executives say they believe that the coronavirus pandemic played a large part in the declines and feel numbers will improve once normalcy returns.
In addition, CBS, Fox, NBC and ESPN are all facing challenges in holding on to viewers, making live sports ever more important.
This next round of long-term deals might be the last time the NFL is able to command such giant fee increases from its broadcast and cable partners as fragmenting viewership and cord-cutting are expected to only increase in the coming years, said MoffettNathanson media analyst Michael Nathanson.
“This is a sign that the NFL wants to take as much as they can for as long as they can. A decade from now, the world will surely look different and a new set of bidders will need to emerge,” Mr. Nathanson said.
One TV deal the NFL isn’t yet renegotiating is the Sunday Ticket package, which allows fans to watch any game on Sunday afternoon. AT&T Inc.’s T 1.77% DirecTV has the package through the 2022 season at an annual price of $1.5 billion. AT&T Chief Executive John Stankey has indicated that Sunday Ticket isn’t the growth engine it once was and isn’t critical to DirecTV anymore. In addition, AT&T’s own interest in the satellite broadcaster is also fading. Last week, it struck a deal to sell a 30% stake in DirecTV to private-equity firm TPG for $1.8 billion.
Write to Joe Flint at [email protected]
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