According to the Wall Street Journal, published on April 9, the U.S. Department of Justice has opened an investigation against the NFL to determine whether it has “engaged in anticompetitive tactics that harm consumers.” While the DOJ and the NFL have maintained secrecy, there is a possibility that the situation could become a major problem for TV rights, creating a rift within the league.
The “nature and scope” of the investigation remains unknown. But the Sports Broadcasting Act of 1961 likely has ties to it. The league antitrust exemption brings stability. It binds the television rights of all the 32 franchises together and sells them as one package. Without it, there would be a rift, as each team would have the right to sell TV rights. While some franchises, like the Dallas Cowboys and the New England Patriots, which have global fans, would make a lot of profits, others wouldn’t. Similarly, it could also pose a problem in the salary cap.
The more profitable franchises would have the luxury to sign top players, potentially imploding their salary cap and breaking down the league’s structure. Because of the Sports Broadcasting Act, consumers were able to watch the NFL over broadcast TV. But things have changed in the last few seasons. Last month, Republican Sen. Mike Lee, chair of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, sent a letter to the Justice Department and Federal Trade Commission requesting a review of the antitrust exemption policy.
“To watch every NFL game during the past season, football fans spent almost $1,000 on cable and streaming subscriptions,” Lee wrote in his letter.
The NFL claimed it to be the most fan-friendly league, with almost 87% of its games available on local TV. They also said it was more than many other sports that have migrated to paid platforms and services. However, $1,000 for one season is a lot to pay. Many even believe it to be a ploy by FOX to extract more money through broadcasting.
The NFL may land a $15.9 billion deal in the near future
The NFL’s 11-year deal with Amazon, ESPN, FOX, NBC, and CBS will run until 2032. But the contracts have a clause that allows the league to opt out with most of its partners in 2029. With the NBA having secured a $76 billion deal for 11 years, which is almost 160% increase from their last contract, Goodell does not want to wait to begin the talks, despite three years still remaining. Naturally, with such haste, it raises questions about the structure of the contract the league is looking for.
“And right on cue, MoffettNathanson is out with a new report predicting the average annual value of NFL rights deals will rise to $15.9 billion after renegotiations—including the carve-outs of additional smaller packages, likely to sell to Netflix or YouTube,” Puck’s Matthew Belloni wrote. “That’s 58 percent higher than the current deals, and here’s the key line.”
The league’s current media dominance is built on partnerships with a mix of traditional broadcasters like CBS, FOX, and NBC, and streaming giants like Amazon, all of whom contribute to the $110 billion total. At that point, it was the largest deal in sports history. According to the current rights, FOX pays about $2.2 billion, with CBS coming in at second at $2.1 billion. NBC follows with $2 billion, and Amazon $1 billion for Thursday Night Football, along with Netflix’s Christmas Day package and additional agreements like Sunday Ticket and select games tied to YouTube.
Now, they are once again trying to recreate it. This time, however, the league is targeting a value nearly $6 billion higher annually. Previously, it was $10 billion per year, and now Goodell is looking at $15.9 billion potentially. It is a 58% jump from last time.
“What we focus on is ‘How do we reach the broadest number of people, on every broadcast? How do we make an event out of that?’ We select our partners in part for that reason. Economics are obviously part of that, the value that’s created. But at the end of the day, we want partners who are going to broaden our audience.”
The NFL commissioner already has a plan laid ou. With the NBA signing such a massive deal, the NFL is likely to follow next.
