Who really rules television? It isn’t the top broadcast network (CBS) or the top cable channel (Fox News) or streaming services like Netflix or media mega-players like Disney or Comcast. It’s the National Football League by a mile. And sometime soon after Super Bowl LV, the NFL will demonstrate its awesome power when it signs new, costlier multi-year contracts with TV networks and maybe a streaming service. After surveying all the major players in TV, media analyst Michael Nathanson says that “expectations are for the new deals to be very expensive.”
The media and the public regard pro football as merely a sport, but from a business perspective it’s primarily a producer of TV programming. In that role, its utter dominance is little appreciated. Of last year’s 20 most-watched TV broadcasts, 14 were NFL games. The league provided 33 of the top 50 programs and 71 of the top 100, according to Nielsen viewership data.
Look closer and the NFL’s power is even more striking. TV critics write volumes about the latest dramas and comedies, but none of them, not even one episode of any scripted series, is among last year’s top 100 broadcasts. An episode of CBS’s NCIS, the No. 1 scripted show on network TV, was only at No. 102 overall. And while NFL games took 71 of the top 100 spots last year, no game in any other professional sport managed to get even one game into the top 100.
Nielsen measures viewership of streaming services differently than for broadcast and cable networks, so direct comparisons aren’t possible. But think of it this way: If all of Netflix’s 74 million U.S. subscribers watched the same program at the same time, the audience would be far smaller than the number of viewers who watch the Super Bowl every year—about 100 million in 2020.
As America’s favorite form of TV entertainment, NFL football is extremely valuable, and unfortunately for TV programmers, there’s only one organization that sells it. Thus, the NFL can charge monumental prices for TV rights.
How monumental? Consider this comparison. The program production industry gasped when media reports said the first season of Netflix’s hit series The Crown, consisting of ten episodes, cost $130 million to produce. That made it the most expensive TV series ever, at $13 million per episode. ESPN currently pays the NFL $1.9 billion a year for Monday Night Football—19 games, at $100 million per game. A game is three or four times longer than an episode of The Crown, so let’s be generous and say the comparable cost for that series is $50 million per episode. Financially, the most expensive scripted show on TV still looks like a low-budget indie production compared with NFL football.
If ESPN wants to keep Monday Night Football, it will soon have to pay more, probably much more. The NFL is negotiating new contracts with its major TV rights holders: CBS, Fox, NBC, ESPN, and DirecTV. Current contracts expire in a year or two; industry experts believe the new contracts will be for eight years or so, like the expiring ones, or maybe a bit longer. All of the current media partners will likely continue, except possibly DirecTV. Its owner, AT&T, is reportedly looking to sell a significant stake in the business, and it’s unclear if a new co-owner would want to continue paying for the NFL Sunday Ticket package—current cost: $1.5 billion a year—which enables viewers to watch all Sunday games outside their local market.
What’s certain is that all costs will go up. Industry experts suggest increases will be 5% to 8% annually, meaning some prices could nearly double over an eight-year contract. Broadcasters will pay it because they feel they must. “Broadcast partners need the NFL,” Nathanson writes in a recent note. “Without the NFL, broadcast networks lose their leverage in affiliation renewals.” Networks reach viewers through affiliated local stations, which broadcast over the air and are carried on cable systems – but lack of NFL football can be a deal-breaker, prompting stations to dump the NFL-bereft network and affiliate with a different one. It has happened.
Predicting the NFL’s demise has become popular in recent years, as the league struggled to handle the controversy involving players kneeling during the national anthem, and evidence mounted that debilitating concussions were common among players. The league has largely navigated through those problems. TV viewership declined from 2014 to 2017 but has since begun to rebound; viewership of all sports fell in 2020, but less for the NFL than for any other major sport. It’s the only major pro sports league that has played a full season through the pandemic.
The bottom line is that America loves the NFL’s product, and the TV industry can’t live without it. We don’t know who will win Super Bowl LV or if the commercials will be any good or whether the halftime show will come off without a hitch. What we know is that once again the game will almost certainly be the year’s most watched TV broadcast by far.