With broadcast deals for premium sports offerings like “Monday Night Football,” the National Hockey League and NFL Sunday Ticket all set to expire within the next three years, recent media deals indicate the multibillion-dollar price tags required to secure them will be on the rise.
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Sporting events are one of the few remaining forms of programming capable of drawing massive live audiences amid the cord-cutting trend and an unprecedented array of entertainment options. The trend has prompted traditional sports powers such as Fox, CBS and Disney-owned ESPN – which agreed this week to pay $30 million annually for the right to stream Bundesliga soccer matches – as well as newcomers like Amazon and Facebook to shell out massive sums for sports content.
“Sports rights have been outperforming other genres. They’re probably the most expensive programming out there, just because of the audiences that these games continue to generate,” Tuna Amobi, director and senior equity analyst at CFRA Research, told FOX Business. “Granted, in the last couple of years or so, the viewership has been a little bit shaky, but there’s nothing else out there that draws this kind of mass audience – which is why advertisers love this, and to that extent, the networks also continue to bid those rights up.”
ESPN paid nearly $1.9 billion for broadcast rights to “Monday Night Football” under its current deal. While ESPN is the frontrunner to retain the premium schedule when the agreement expires after the 2021 season, it will likely have to pay a “hefty renewal fee,” according to Amobi.
Average viewership for NFL games rose five percent to 15.8 million during the 2018 regular season, with league broadcasts accounting 46 of the top 50 most-watched telecasts over the same span. Through four weeks of play, the NFL’s ratings this fall also appear to be on the rise.
With Fox, CBS and NBC all locked into their own costly broadcast rights deals with the NFL beyond 2021, the “Monday Night Football” package likely to remain under ESPN’s control.
“Every time any one of those deals come up, it’s extremely competitive bidding, whether it’s the broadcast networks or the cable networks. I think ESPN pretty much has a lock on that 'Monday Night Football.' My sense is it’s a core part of their offering," Amobi said.
The NFL’s recent experimentation with streaming platforms could add a new wrinkle to the competition. Commissioner Roger Goodell recently said the league has begun early talks with leading tech platforms about upcoming broadcast rights.
Aside from the multibillion-dollar cost of traditional broadcast rights for “Monday Night Football” or other properties, the NFL and other sports leagues could look to break out digital rights in separate deals, according to a sports media rights veteran who spoke to FOX Business on condition of anonymity because of their ongoing dealings in the industry. At present, the NFL divides its “Thursday Night Football” series between Fox, which holds linear rights, and Amazon, which holds streaming rights.
“It’s basically saying, if [ESPN is] not willing to take a big increase, is there a way that we can carve out something for a streaming provider? Maybe that’s Amazon, maybe it’s DAZN, FuboTV probably less likely, but there could be some players who are interested in something like that,” the source said.