Around The NFL - 2020

[ice grillin you]

The NFL salary cap is going to drop in 2021, the result of COVID-19-related revenue losses last season, but across the league there's optimism that next year, revenues will rebound and the cap will once again climb.

The biggest reason? It's not that stadiums will be full — or at least close to full.

It's because the NFL is close to finalizing its new broadcast deals that will be worth billions annually.

What will the new deals mean for the way we watch football? And what are the financial implications for the league, its teams and the players? The Athletic's Lindsay Jones checks in with our sports business reporter, Dan Kaplan, who has been covering every aspect of these deals and has answers.

Before we get into the meat of this conversation about what the football-watching experience will be like into the next decade, let's get caught up with where the negotiations stand. Dan, what is the latest on talks between the NFL and the major networks, especially Disney/ESPN? And what sort of timeline are we looking at for the TV deals to be finalized?

It's little secret the NFL is far down the road negotiating broadcast contracts with NBC, CBS, Fox and Disney's ESPN. The league is looking at anywhere between a 50 percent-to-100 percent increase from their current fees, which would net the NFL an annual amount over $14 billion in the best-case scenario. It may be a matter of weeks, if not less, from what I am hearing. And yes a lot of attention has been paid in the last few days to reports that Disney and the NFL are far apart on their deal. ESPN currently pays $1.9 billion a year for "Monday Night Football," so the NFL would like to double that, whereas Disney wants to go up 20 percent, according to these reports.

One must take such reports with a grain of salt, of course; not because they are wrong, but because a lot of this is just public negotiating. Something that people need to realize with Disney is how important the NFL is to ESPN, and not just because football is so highly rated. Not only would the fees that Disney is paid by cable companies for ESPN go down significantly if there's no NFL on the Worldwide Leader, but ESPN would also lose all the highlight rights that litter its broadcasts every day. That would be as big a hit in some ways as losing "Monday Night Football."

That said, if there is no rival bidder for ESPN's package, and it doesn't appear there is, the standoff could last. Disney has a new CEO, Bob Chapek, and this is his first NFL rodeo. So that is a wild card worth watching. NFL owners were close to his predecessor, Bob Iger, and deals often get done on that basis. Chapek ran Disney's parks before assuming the top post, and that business has been hard hit by the pandemic. Could that make him more parsimonious with NFL rights?

OK, so "Monday Night Football" should be staying on ESPN. We just don't know the price point yet. Let's look at Sunday. What do you expect the Sunday afternoon broadcast packages to look like? Will CBS and Fox continue to carry those games?

It appears Fox and CBS will retain their roles broadcasting the Sunday afternoon packages. While both companies have had their financial difficulties in the last 12 months, the value of the NFL is just too great to give up. So expect for a long time to tune into CBS and Fox on Sunday afternoons in the fall and winter. CBS wouldn't have paid up for Tony Romo's contract just to let the NFL slip away. A big question: Who will be Romo's partner? Jim Nantz can be a free agent shortly, but he is widely expected to stay put.

The jewel in the broadcast package now seems to be the Sunday prime-time game. Do you expect any changes to "Sunday Night Football"?

No great headline here, either. NBC almost surely will keep the Sunday night package. It's the most valuable commodity in prime-time television.

If there's going to be any significant change, it seems like it could come to "Thursday Night Football," which has been broadcast in recent years on CBS, Fox and NFL Network and streamed via Amazon Prime. What is the future of that broadcast, on traditional television or via streaming services?

The fate of "Thursday Night Football" is the 800-pound gorilla of the media deals. The incumbent Fox, which shares the games with NFL Network and Amazon Prime, has indicated it is not willing to pay up to keep the property. That is what has led to talk Amazon Prime could go it alone and create the NFL's first true streaming-only package. This is unlikely, as NFL Network would likely remain involved and there would still be simulcasts on the local TV affiliates in the markets of the teams playing each week. If I had to make a prediction it would be a shared deal between Amazon Prime and NFL Network. The NFL needs to keep some games on its in-house network to justify subscriber fees that it charges cable operators. 

I am so curious about what role streaming services will play in the future of sports broadcasting. That medium is certainly already here, and I feel like we should assume that more and more people will continue to cut the cord from traditional broadcast services. Or young adults might never even sign up for a traditional cable package. As these deals are taking shape, what role do you see for streaming services, and what is the cost there?

The biggest change in streaming will likely come with the Thursday night package. But I keep hearing the NFL wants to claw back more digital rights, and this could mean anything from Sunday Ticket to RedZone. But don't delude yourself, streaming will be a small slice of the money equation when these deals are finished. Maybe in the next round of media deals that will change. One note about Amazon: Traditionally when its name comes up in this context, other tech giants are also mentioned — Apple, Facebook, Netflix and Twitter. While the NFL talked with all, they are viewed as far less interested in games. If Amazon has a competitor here, it is most likely a streaming service attached to a traditional media company, like Peacock (NBC) or ESPN+.

I have been a longtime DirecTV subscriber, in large part because of the Sunday Ticket package. It's a must-have in my job, so I have felt somewhat chained to that provider. And as I've been covering games from home more in recent years (especially in 2020!), Red Zone has been my favorite way to consume live games. So, personally, I am very interested in what's going to happen with Sunday Ticket in the next package. What do you see happening there?

There is little chance that Sunday Ticket remains with AT&T's DirecTV. AT&T has been going through a host of financial issues the last several years and has been quite clear to the NFL that it is not renewing, at least not at the $1.5 billion a year current price. In fact, there have been reports of AT&T looking to sell DirecTV. This would eliminate one of the longest partnerships in NFL history, as it goes back to 1994. What takes its place could be a single provider like a cable operator or a streaming company, or a hybrid model that splits the out-of-market games among two types of technological platforms. But the interesting thing here is the NFL may see a reduction because AT&T treated the NFL as a marketing expense. If it is not willing to do so again — and it's not — and others need to make the economics work, this might be a rare NFL rights package where the league's take goes in reverse.

Right now, you can watch the RedZone channel through DirecTV or the similar NFL RedZone option through other streaming and cable services. How do you think the NFL proceeds with RedZone, especially if the DirecTV partnership is dead moving forward?

RedZone is another asset that could be divided up between its existing distributors and a streaming platform. It all comes down to cost; by splitting up the package neither recipient pays for exclusivity. In the scheme of this discussion, the channel is small potatoes, but one could see something like ESPN+ or the new Paramount streaming service (recall those Super Bowl ads) seeing RedZone as distinguishing content.

Let's talk money: What sort of revenue is the league looking at from the new TV deal, and what will it mean for the salary cap in 2022 and beyond?

Approximately, a doubling of national broadcast revenues flowing into the NFL ultimately probably exceeds $14 billion annually. But it will take several years for all that revenue to come in. The ESPN deal expires after the upcoming season but there are two more seasons left for NBC, CBS, Fox and DirecTV. Typically broadcast contracts are structured so they rise incrementally. So it's not as simple as figuring out an average of the $14 billion and factoring that in to a given year.

All that said, we know that it will help the 2022 salary cap because of the new "Monday Night Football" deal. Beyond that, even exponentially more. There's been some talk that the NFL will borrow from these new deals to flatten out the cap this year, which is going to take a big hit because of the lack of fans in the stands in 2020 (local revenues are reflected in the following year's cap). That is overstated, as the league and NFLPA are expected to settle on a 2021 cap of at least $180 million. It was $198.2 million last year. It's not an exact apples-to-apples comparison because the caps do not include benefits, which can be $45 million per team. The league and union could take from the benefits side to prop up the cap, as has been done in the past and which is more likely than taking from the national TV deals not yet signed.

Bottom line: Player compensation looks set to surge. Caps of $220 million and upward will be the norm. That is, of course, assuming the pandemic is a distant memory.

How long are we talking about for these new TV deals?

I am hearing long-term deals, a minimum of six years, up to 10.  This says the NFL does not expect massive shifts in the way sports are consumed. In other words, if the NFL thought by 2025 Amazon would want its own Sunday afternoon package and would pay $3 billion, $4 billion, we would see shorter-term deals.  That's not happening. So the question of when a full NFL window is streamed exclusively looks to be one without an answer for many years.

[QB Eagles]

Sounds like Russell Wilson is the next one to whine his way out of a city

I'm very skeptical that the friction leads to a move.

[Don Ho]

The fate of "Thursday Night Football" is the 800-pound gorilla of the media deals

They'd get the same ratings on MeTV or C-SPAN as they would anyhere else.  Leave it to Beaver, The Jefferson's, NFL Thursday Game, Gomer Pyle - now that's must see TV!  Just don't mess with my NFL Ticket!!!

[Don Ho]

You better not bring attention to America's injustices during the national anthem, though. We won't tolerate that bullshtein.

Can you send that again?  Bad reception at the internment camp here in Manzanar. 

[MDS]

word is espn wants mnf DHs for the full season...1 game on abc

not sure how the 2nd game would go (before, after, both?). the nfl got good numbers for a wednesday happy hour game in 75% of markets between wash and pitt so really it dont matter

[SD]

JJ Watt is signing with the Cards

[MDS]

new nuggets from the tv deal
-amazon is going to get some kind of exclusivity for thursday night. might not be every game but a bunch of games are only going to be on amazon
-nbc is getting 1 game per year on peacock. yes. peacock. id guess it will be on their free tier and its just a rouse to get people to download it
-deals will be 10ish years. so, more or less, the way you consume football will not change until 2033
-if you didnt already know sunday ticket is moving off directv to who knows where, probably some streaming outlet

[Geowhizzer]

2033?  Damn, I'll be old by then.

[PhillyPhreak54]

Great news on Sunday Ticket.

[MDS]

2033?  Damn, I'll be old by then.

better learn how to use the internet by then or else no sports, gramps

[Geowhizzer]

I'll get my grandchildren to help me.

[QB Eagles]

Great news on Sunday Ticket.

I'd wait for confirmation that it's still going to be a thing before celebrating too much. If it's a "buy these three services and you'll have all the games" type situation, that's worse than DTV.

[General_Failure]

-deals will be 10ish years. so, more or less, the way you consume football will not change until 2033

Oh I don't know, I'll probably have to switch pirate streams a few times.

[MDS]

Great news on Sunday Ticket.

I'd wait for confirmation that it's still going to be a thing before celebrating too much. If it's a "buy these three services and you'll have all the games" type situation, that's worse than DTV.

theres always going to be a way to watch out of market games...but correct it could go to some kind of paid tier of lets say paramount+ then cost an addition $200 or something. what is paramount+? its a real thing.

[ice grillin you]

new nuggets from the tv deal
-amazon is going to get some kind of exclusivity for thursday night. might not be every game but a bunch of games are only going to be on amazon
-nbc is getting 1 game per year on peacock. yes. peacock. id guess it will be on their free tier and its just a rouse to get people to download it
-deals will be 10ish years. so, more or less, the way you consume football will not change until 2033
-if you didnt already know sunday ticket is moving off directv to who knows where, probably some streaming outlet

i dont even follow the stupid tv stuff like you but none of this is new