Score! NFL to Grab $7 Billion a Year in Broadcast Deals
With this in mind, it's not hard to understand why CBS, Fox, and NBC -- not to mention Sirius Satellite Radio, Westwood One Radio and Verizon Mobile -- are about to ink commitments to pay billions to carry the games.SportsBusinessDaily.com reports that the new deals will translate into an estimated $7 billion per year for the NFL.
For the first time, each of the broadcast networks will pay an annual average of at least $1 billion for the rights to carry NFL games. The expected windfall from CBS, Fox and NBC will be worth more than a combined $24 billion over the next eight years. -- SportsBusinessDaily.com
Part of the reason for the impressive new payments -- a whopping 64% increase over the league's current television revenues -- is that, in an ever-shifting media landscape, football games remain one of the few completely reliable sources of huge ratings. On a larger scale, however, the explosive increase in media revenues reflects a similar increase in the number of media outlets. As TV networks stream to an ever-expanding array of devices to capture viewers, the NFL is hoping to capture even more of the revenue that its games generate.
And customers are clearly willing to pay. DirecTV's NFL Sunday Ticket costs a whopping $52.99 per month, in addition to existing DirecTV fees. By comparison, the company's NFL SundayTicket To Go, which streams the games directly to mobile devices, costs $350 for a season. The big difference, however, is that the new program doesn't require a satellite dish, which means that DirecTV can use it to reach an entirely new group of viewers. While the accessibility situation isn't quite so clear-cut for most providers, there's little doubt that streaming video will open them up to broader audiences...and bigger revenues.
The NFL's current broadcast contracts extend until the end of 2013, and the new rates won't kick in until the following year. The new contracts are expected to extend until the end of 2021. Whatever changes come to the technology of video between now and then, those networks are counting on one thing -- that you'll be obsessively watching football for another decade.
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at email@example.com, or follow him on Twitter at @bruce1971.