BLOG — Dec 02, 2024
As NFL revenue rises, current media rights deals ensure future success
By Michael Johnson
- The NFL solidified its dominance as the most lucrative sports league in the U.S. with nearly $14 billion in approximate revenue last season. This financial strength supports ambitious plans, including expanding the seasonal calendar and targeting international markets, with a goal of reaching $25 billion in revenue by 2027.
- The league's media rights agreements, valued at approximately $110 billion over 11 years, include major networks like CBS, NBC, and ESPN, with Amazon streaming Thursday Night Football. Recently, Netflix entered the fray, securing rights to broadcast two Christmas games. Additionally, YouTube acquired NFL Sunday Ticket rights for $2 billion annually.
- The NFL is a made-for-home sport as ratings continue to soar. Viewership trends indicate a strong preference for digital consumption, with 82% watching games via TV or streaming services.
The NFL has consolidated its position as the most lucrative sports league in the US with almost $14 billion in estimated revenue last season, approximately $9 billion more than the NBA in 2023. The elevated revenue has supported the NFL's ambitious plans for the next decade, including expanding the seasonal calendar, targeting overseas markets and growing the football audience via streaming services. All these efforts are aimed at achieving NFL Commissioner Roger Goodell's objective of generating revenue of $25 billion by 2027.
The NFL is in the second year of its media rights agreements with CBS (US), NBC (US), FOX (US), ESPN (US) and Amazon.com Inc., collectively worth almost $110 billion over 11 years. These deals run through the 2033 season, more than doubling the value of the league's previous contracts, which expired in 2022. Under the current agreement, CBS, FOX and NBC are paying an average of over $2 billion per year, with NBC's payment being slightly less on average than CBS and Fox. ESPN is paying approximately $2.7 billion annually to continue airing Monday Night Football, while gaining the opportunity to broadcast the Super Bowl starting in 2026. These network deals also encompass agreements for their respective streaming platforms, with Amazon now showcasing Thursday Night Football games on Prime Video, paying more than $1 billion per season until 2032.
Netflix Inc. has also entered the NFL media rights conversation this offseason by announcing its plan to broadcast two Christmas NFL games Dec. 25. The deal is worth approximately $150 million per year, or $75 million per game, lower than Peacock's $110 million deal for a single playoff game.
In December 2022, Alphabet Inc. entered into a partnership with the NFL to secure residential rights for broadcasting NFL Sunday Ticket games on YouTube. Alphabet's annual payment for this agreement is reported to be $2 billion over seven seasons, contingent on subscriber targets. Additionally, the NFL and RedBird Capital Partners announced the formation of Everpass Media LLC in March 2023, a platform that will hold the exclusive rights to distribute NFL Sunday Ticket to bars, restaurants, hotels and other commercial venues in the US. As a result, the league is expected to receive an additional $150 million to $200 million per year until 2029 for the rights to NFL from commercial venues in addition to the $2 billion annual payment from Alphabet.
Viewership survey breakdown
The NFL is a made-for-home sport as ratings continue to soar. According to a recent US first-quarter 2024 Consumer Insights survey completed by S&P Global Market Intelligence Kagan, in which NFL viewers were asked to identify how they engaged with the NFL over the past year, only 12% said they had attended an NFL game in person while 82% indicated they watched live games on TV or through a streaming service. Approximately 39% of NFL viewers reported watching game highlights or clips on social media or other online platforms. Additionally, 20% of viewers listened to NFL-related radio shows or podcasts. These findings highlight the growing trend of consuming NFL content through digital platforms and audio mediums.
Nationally, 60% of NFL viewers subscribe to a traditional multichannel TV service from a cable, satellite or telecom service provider. Approximately one-third (31%) have dropped their traditional pay TV service (video cord cutters) in favor of an online virtual multichannel TV service, such as YouTube TV, and 9% were video cord nevers.
Potential 2029–2030 media rights renegotiation
If the NFL continues to grow and its broadcasting rights become more valuable through the implementation of an expanded 18-game regular season schedule, the league has the option to terminate its current agreements with Amazon, CBS, Fox and NBC after the 2029 season and with ABC/ESPN after the 2030 season. By doing so, the NFL could negotiate larger payments from the networks or potentially introduce a new partner such as Apple Inc. to enhance its existing media strategy.
It is worth mentioning that if the NFL's ratings or potential partnerships with other media entities do not justify terminating its current agreements, the league has the option to extend its deal with Disney until 2033. This extension would result in an additional $2.7 billion in revenue for the NFL. This flexibility allows the NFL to adapt to changing market conditions and maximize its revenue potential over the next decade.