The NFL's $105 Billion Deal

Every morning I write an email discussing the business and money behind sports. If you would like to receive it directly in your inbox, subscribe now.

Friends,

After months of speculation, debate, and consistent rumors, the NFL has finally reached an agreement with network & streaming partners to distribute their content for the next decade.

Networks including CBS, Fox, NBC, and Disney will pay a combined $89.5 billion over the next 11-years, a 105% increase from the $43.1 billion they paid during the previous deal. When you add Amazon’s exclusive deal to stream Thursday Night Football on Amazon Prime, the total comes out to $105 billion over the next 11-years (Source).

That’s obviously a massive amount, but remember, the NFL is expected to add a 17th regular-season game this year, potentially bringing in millions of dollars in ad revenue for their TV partners.

Furthermore, here’s a great visual breaking down the annual increase on a network-by-network basis.

As for what this all means, here’s the way I think about it…

While media experts will debate the details of the deal and what it all means for the future of each network individually, the reality is quite simple.

There was never a doubt that major networks like CBS, Fox, NBC, and Disney would be bidding for future NFL rights. Their entire economic model is built on live sports. The real question was how much are they willing to pay.

As cord-cutting has accelerated throughout the pandemic and major networks continue to lose millions of paying subscribers annually, we are starting to see a shift in the ranks of linear television.

Networks that secure rights to air live NFL games will stay relevant and decelerate the inevitable decline of paying subscribers, earning top-dollar ad revenue in the process. In contrast, those who fail to secure any compelling live content will continue their fade into irrelevance.

Here are two stats that further illustrate my point (Source):

• Despite all the talk about the decline of ratings last year, the NFL still represented 71 out of the top 100 most-watched broadcasts in 2020 — a number that would have been even higher without presidential debates and political conventions.

• Live NFL games generate almost $4 billion in ad-related revenue for network partners annually, a number that increases about 3%-5% annually on average.

Simply, while others love to claim that the NBA is the most innovative professional sports league in the world, which they are to some degree, it’s important not to forget, the NFL is still king.

For me, the more interesting caveat is Amazon joining the party.

The NFL knows that linear television isn’t the future of sports broadcasting. By involving digital players like Amazon Prime now, they are setting themselves for more aggressive bids in the future.

Now, Amazon will spare no expense in hiring the most talented broadcast team they can find to start building out their live sports offering aggressively.

My take?

Amazon should enter the market with a splash.

Ultimately, the introduction of additional media rights players via streaming is healthy for the overall sports ecosystem. Estimates from Rethink Research suggest that the rise in streaming will drive global revenue from sports media rights to $85 billion by 2025, a 75% increase compared to 2018.

As for who might join the party next?

Well, your guess is as good as mine.

I hope everyone has a great weekend. Talk to you on Monday.

If you enjoyed today’s email, subscribe now to receive future emails directly in your inbox.

This Newsletter Is Brought To You By…

I want to introduce a new partner I’ll be working with — Eight Sleep, the premier sleep fitness company that powers human performance through optimal sleep.

Eight Sleep uses an advanced temperature-controlled system that adjusts throughout the night. It analyzes your personalized sleep stages, biometrics, and bedroom temperature, reacting intelligently to create the optimal sleeping environment.

The result?

Since getting my Eight Sleep Pod Pro Cover a month ago, not only do I fall asleep faster, I actually get high-quality sleep, so I wake up feeling well-rested and energized.

Simply put, it’s been a gamechanger.

If you want to join me and thousands of pro athletes, CEOs, and other high performers that are dedicated to improving their sleep fitness, you should get an Eight Sleep Pod Pro Cover too.

Trust me; you won’t regret it :)