Think about eye-opening 20% to 25% higher sports license fees for a TV network to carry the NFL starting in 2022.
Recently, NFL commissioner Roger Goodell said the league is "very open to changing packages, very open to changing partners," according to Fox Business, when it comes to negotiating media contracts that will expire in two years.
Big TV contract increases are coming now after some recent positive results -- and this doesn’t have to do with the still strong Super Bowl or playoff games
The NFL continues to see strong results in the regular season when it comes to traditional live TV viewing -- a 5% improvement for each of the past two seasons, now averaging 16.5 million per game across five TV networks -- Fox, NBC, CBS, ESPN, and NFL Network. The last two years’ gains came after a 10% decline in 2017.
This isn’t to say these rising results are automatic -- just look at the up-and-down viewing performance of the Super Bowl and the playoffs.
But even with some softening, TV’s big revenue generating NFL programming will continue. Even in the lower-viewed 2017 regular season, there was rising TV ad revenue for NFL games.
And this past season, estimates showed even better growth -- anywhere from 10% to 14% for regular season games to around $4.2 billion to $4.4 billion in ad revenue.
Now you know why Neal Pilson, former president of CBS Sports, believes fees could climb 20% to 25%, maybe in collective deals worth $8 billion to $10 billion a year. Surely, new digital media platforms -- Amazon, Google, Facebook, and others -- will contribute to driving up those license fees.
Currently, the league pulls in deals with TV networks for around $6 billion a year from all its TV license NFL programming rights -- around $1 billion a year each for CBS, NBC and Fox. ESPN pays $1.9 billion a year for “Monday Night Football.” Fox also spends around $660 million a year for “Thursday Night Football.” Amazon pays $65 million per year for digital airings of “TNF.”
Good news for the big traditional networks: They will still be of major importance for the NFL -- so there is some leverage there.
"We love to be available on the broadest medium," Goodell said to CNBC. "That's why our network partners are important to us.”
Negotiations haven’t started. But figure they will later this year and in 2021. TV executives wringing of hands will follow.