Although there were declines in its regular-season TV game viewership -- 7% to 15.4 million, as well as the Super Bowl, 9% lower to 92 million traditional TV viewers -- the NFL remains the dominant TV content on virtually all platforms.
So the NFL has a number for TV networks to deal with, say 100%. That would be an eye-popping increase in the billions of TV rights fees charged to Walt Disney, NBCUniversal, Fox Corp. and ViacomCBS.
But that isn’t even across the board. Walt Disney’s ESPN pays virtually double what its TV network competitors pay -- just around $2 billion a year, versus around $1 billion. (Fox pays an additional $660 million per year for 11 “Thursday Night Football” games.)
Reports say NBCUniversal, Fox Corp. and ViacomCBS may be more likely to go along with a price hike, but ESPN not so much -- it is already paying a big premium.
Can a major TV network just abandon NFL? It's not likely.
Take a look at Disney’s ABC network. While still a decent performer, it doesn’t compete overall with NBC, Fox and CBS -- in part because it doesn’t have an NFL package. ABC had aired “Monday Night Football,” where it has had a long storied history. “MNF” was the original NFL package that expanded from the NFL’s traditional Sunday afternoon time periods.
Now, Disney might like to bring back the package to broadcast TV networks, according to some analysis -- which would also help with on-air TV program promotion. Even then, Disney is pushing back heavily on a price tag, which rose to a crazy-high $4 billion a year.
Do TV networks make money on these packages? That depends on how you assign all TV revenues to the NFL equation. Advertising alone doesn’t do the trick. The key is steady and rising content-linked distribution fees bringing billions to the networks for all its programming -- not just for sports.
That can range from $1.6 billion to $1.9 billion a year for Fox, CBS and NBC -- and a very big $8.6 billion for ESPN, according to MoffettNathanson Research estimates. The NFL continues to closely eye that highly prized ESPN financial number.
The total regular-season NFL national TV advertising take is estimated to be roughly $5 billion. (Add another $400 million or so for all Super Bowl related programming.) Match that up with total rights fees currently at $6 billion. (This doesn’t include DirecTV Sunday Ticket, which pays $1.5 billion.)
Billions in overall distribution fees to the networks are the difference. But now that $5.6 billion in rights fees could -- in theory -- double to $10 billion. Can TV networks make money then?
And, of course, we haven’t factored in bigger digital media companies that could be in the hunt -- Amazon, Facebook, Google, Apple, which have hoards of cash to throw around at the NFL if deemed necessary.
The downside here -- to a potential big digital move -- is that the league could hurt its overall brand appeal and traditional TV large-scale viewership.
Would the league want to risk going in that direction when digital media has yet to prove it reaches many more millions of real-time TV football viewers?