This year, the value of global sports television contracts is projected to reach a high-water mark of $62.4 billion, which is, more or less, the GDP of Slovenia. Nearly half of those TV and streaming bucks will be generated here in the U.S., where the NFL alone accounts for $12.4 billion, or about 43% of the overall stateside haul.
Now, as much as the networks’ long-term, deep-pocketed investment in the NFL has made the corporate overlords at Comcast, Disney, Fox Corp. and Paramount a bit fussier about how they manage their live sports inventory, there’s something profoundly cynical about the self-proclaimed “futurist” types who insist that the media rights bubble is about to burst. Setting aside the argument that anyone who refers to himself as such should be tossed into the nearest active volcano, heightened discernment as to how much the networks are willing to spend on sports is not at all symptomatic of a looming devaluation in the next round of deals.
For every linear-TV network that decouples itself from a chunk of its legacy contracts, there’s a digital disruptor waiting in the wings to carve out a new streaming package. After ESPN elected to pare its MLB schedule to a weekly Sunday Night Baseball showcase, Apple showed up on the scene with $595 million and a burning desire to program a weekly Friday two-fer. When Fox no longer wished to be tethered to a tough-to-monetize Thursday Night Football contract, Amazon happened along with a bid to assume stewardship of the package in exchange for $13 billion.
With more distribution options available to the leagues than ever before, we’re beginning to see some traditional TV outlets temper their future commitments while the members of the Four Commas Club swoop in to [over]compensate for the networks’ deliberate approach to how they maintain their portfolios. As such, the money just keeps rolling right in, and a younger, TV-eschewing fan base is beginning to emerge across the various streaming platforms.
Here’s what to know about some of the biggest sports TV deals, past and present, and what the future may hold for the next sets of rights to go to market:
Parity with the NFL? Not in this lifetime (or the next)
If it’s difficult to pinpoint the exact moment when the NFL became the world-bestriding colossus that it is today, it’s also probably safe to say that it happened sometime in December 1993, when Rupert Murdoch whipped out his checkbook and wrote a check for $1.58 billion. The Aussie newspaper baron outflanked CBS’ Laurence Tisch for the NFL’s high-octane NFC package, offering a sum for a four-year deal that was 49% higher than the Tiffany Network’s contracted rate for the 1990-93 seasons.
Murdoch’s bold gambit served as a gateway to an era of longer TV deals at jaw-dropping rates. After Fox’s first four years as an NFL partner were up, rival networks saw their annual payments expand to the dimensions of the comically huge shoulder pads of that era. In keeping with a doubling down on duration—when Murdoch secured his first renewal, the four-year contracts expanded to eight (1998-2005)—total costs at ABC, Fox, CBS and ESPN soared from $4.4 billion to a staggering $17.6 billion. When the next set of deals was struck for 2006-13, the league’s total haul had risen to $24.3 billion, before nearly doubling in 2014-21 ($43.1 billion). By the time the current packages expire, the NFL will have generated another $110 billion by way of its media partners. Nice work if you can get it.
Ch-ch-ch-ch-changes
If no other league can lay a glove on the NFL’s money-making acumen, the major U.S. sports syndicates have commanded head-spinning price increases all the same. The NBA’s soon-to-expire deal with Disney and Warner Bros. Discovery (2016-25) was structured around a 3x multiple, with the shared average annual rate jumping from $966 million to $2.6 billion.
Similar gains were made by the NHL, which in 2021 replaced 16-year incumbent NBC Sports with a share-the-load partnership with Disney and WBD precursor Turner Sports. That seven-year, $4.3 billion blockbuster more than doubled the value of the previous deal with NBC and is largely seen as beneficial to all parties—although arguably the NHL reaped the most immediate benefits. After a long period of seeming disinterest on the part of Bristol, hockey highlights once again began appearing in heavy rotation on ESPN’s SportsCenter, and both media outlets began promoting their NHL coverage during their respective NBA telecasts.
Meanwhile, another league has faced criticism for pushing the bulk of its live contests behind a paywall, but in MLS’ defense, who’s going to turn up a $2.5 billion opportunity to get in on the ground floor with a suddenly sports-happy Apple? In exchange for 10 years of security, a 450% boost in media revenue and a partnership with a tech innovator that boasts a 58% share of the U.S. smartphone market, MLS has had to scale back its TV reach, although Fox Sports still airs 34 regular-season matches each year via the legacy medium. Now if only Apple would be a little more—er, a lot more—forthcoming with its MLS audience data.
Most recently, the NCAA inked an eight-year, $920 million pact with ESPN that includes the rights to 40 championships, of which the women’s March Madness tourney is arguably the biggest draw.
A shrinking cable universe, by the numbers
If the erosion of the traditional cable bundle is now impossible to ignore, with 40% of all U.S. subscribers having cut the cord in the last five years, it’s readily apparent that the 55 million households that have gutted out the industry’s incessant fare hikes are home to a whole lot of sports fans. At pay-TV’s peak, nearly 90% of all TV homes subscribed to a cable/satellite bundle; today, penetration has dwindled to around 45%.
The impact of this paradigm shift is stamped all over the Nielsen ratings charts, as overall TV usage declined 8% this fall compared to the year-ago period, while a two-year comp reveals an 18% drop in tube time. Because most of us haven’t gone retro and installed a rooftop antenna, cable’s shrinkage is doing a number on over-the-air TV as well, as the average broadcast primetime show now ekes out just 499,184 adults 18-49 per episode. (Advertisers’ insistence on targeting this unwieldy, largely hard-to-reach cohort of viewers is particularly bewildering, given that adults under 50 make up a mere 16.3% of the primetime audience).
Meanwhile, sports ratings keep going up, Up, UP, with the NFL boosting its already massive regular-season deliveries by 7%, while generating a monocle-popping $4.5 billion in ad revenue for its TV partners. On the heels of the inaugural NBA In-Season Tournament, the league’s Nielsen deliveries are up 16% compared to the analogous period during the 2022-23 campaign, and the NHL is enjoying a massive ratings spike. And while MLB’s national TV turnout dipped 2% last season, those losses were recorded in the midst of an 11% drop in summer TV usage. (Focusing solely on baseball’s national telecasts does the sport a grave disservice, as the regional sports networks account for 82% of MLB’s overall impressions. As it happens, MLB’s local ratings were up 7% versus 2022.)
That sports continue to grow their audience via a medium that’s in secular decline goes a long way toward explaining why networks continue to shell out so much for live sports rights—and why the leagues are in no hurry to pull the plug on TV. The symbiotic relationship is based on mutual need; TV needs sports to keep the lights on, and the leagues need the reach of broadcast to guarantee that they’ll reach the largest possible audience. To suggest otherwise is to court folly; moreover, it makes you look a big dummy. Knock it off already.
NBA, College Football Playoff Next on the Clock
While there are a handful of top-shelf sports rights set to expire in 2025 and 2026—the intrigue over the expanded College Football Playoff package should reach a fever pitch if Fox and NBC make a serious run at incumbent ESPN—the NBA is the next big prize to go up for auction. TNT has been an NBA partner for 35 years running, and its parent company has co-managed the league’s digital assets for the past 16 trips around the sun. Disney enjoys unparalleled reach by way of its broadcast and cable outlets, and NBA commish Adam Silver has been emphatic in his desire to maintain a robust presence on network TV. The two keepers of the flame will enter a 45-day exclusive negotiating window in early March, and no credible scenario suggests that either company will be left out in the cold when the league drafts its next multi-year rights deal.
But given the number of other media heavies who are working on their spring NBA pitches, it’s likely that ESPN/ABC and TNT will find themselves sharing the load with one or two newcomers. NBC would very much like to get “Roundball Rock” back into heavy rotation, and Amazon, Apple and YouTube are expected to make a run at an exclusive streaming package.
The relationship the NBA has cultivated over the decades with its longstanding media partners is about as cordial and mutually beneficial as we’ve ever seen, and it’s nearly impossible to imagine pro hoops without Ernie, Charles, Kenny and Shaq holding court on Thursday nights from Studio J. But in an era when the network bosses have to be a great deal more mindful about the margins, the overtures of an interloper or two could prove to be a godsend. If the NBA decides to share the wealth a bit, Disney and WBD won’t be on the hook for the full freight—which won’t be any less than $5.5 billion a year.
In time, the practice of ceding a chunk of inventory in exchange for a break on price will become SOP, a strategy that will enable the leagues to squeeze the greatest value from media’s most impactful platforms while future-proofing their standing with future generations of fans.
