Television Rights Contracts Bring in Lucrative Revenues for Major Sports Leagues

In February 2024, a major new streaming sports service was announced, backed by Warner Bros. Discovery, Fox Corp. and Disney’s ESPN. The new service, called Venu Sports, will stream most major U.S. sports content, including all nationally broadcast NBA and NHL games; almost all MLB games; about two-thirds of broadcast NCAA games and almost half of broadcast NFL games. The remainder of the broadcast rights to the NFL will be held by Paramount+, Peacock and Amazon Prime while a small number of MLB games will be aired by Apple TV+. Analysts at Citi estimate that Venu Sports will own 55% of U.S. sports rights. The service will launch in the fall of 2024 for an as yet undisclosed cost per month.

Television rights to NFL games are big business. After 35 years of airing Monday Night Football, ABC lost the weekly slot, beginning with the 2006 season, to cable sports company ESPN, although the program ultimately remains under its original corporate umbrella since both ABC and ESPN are owned by the Walt Disney Company. Disney is paying dearly for the privilege.

New deals to air NFL games were previously announced for 2023-33. Disney’s deal for Monday Night Football on Disney-owned ESPN amounts to $2.55 billion per year. ESPN’s deal includes the rights to air 500 additional hours of programming and expands ESPN’s digital rights to stream Monday Night Football on ESPN+. Fox’s deal is an annual average of about $2.03 billion per year for the Sunday afternoon NFC league package through 2033, while CBS agreed to pay an annual average of about $1.85 billion for the Sunday afternoon AFC package (NFC teams tend to be in larger markets with larger numbers of fans, hence the difference in fees). Fox previously aired Thursday night games for $660 million per year, but the new rights awarded Thursday nights to Amazon Prime for $1.32 billion per year (the first time a streaming service will exclusively air a full NFL package). NBC is spending $1.71 billion per year for Sunday night games. The overall cost to air NFL games during the 2023 to 2033 period amounts to approximately $105 billion. In the previous package (which expires in 2021), CBS, Fox, NBC and Disney paid $43.1 billion. In addition, YouTube TV is paying approximately $2 billion per year to air a Sunday Ticket subscription package starting with the 2023-24 season. Meanwhile, the NFL Network (a cable and satellite network owned by the NFL) airs approximately 13 games and 27 studio shows and it is staffed with dozens of on-air announcers and analysts.

Television viewership of NFL games had been dropping. Super Bowl LX, which aired in February 2021, had had 91.63 million viewers, down from 2020’s 100.45 million, according to Nielsen. (The game aired on CBS, which reported that while TV viewership was sharply down, streaming coverage was watched across a record-breaking 5.7 million unique devices, up from 3.4 million devices in 2020 and 2.6 million in 2019.) However, audience numbers for subsequent Super Bowls have been rising. Super Bowl LVIII in February 2024, broadcast on CBS, was the most watched telecast in history with 123.4 million average viewers across multiple platforms (which included CBS Television Network, Paramount+, Nickelodeon, Univision and digital platforms such as CBS Sports and NFL+). Total viewership, which included those watching all or part of the program reached a record 202.4 million.

Meanwhile, prime time U.S. broadcast rights for Major League Baseball (MLB) were locked up by Fox, which negotiated a seven-year, $3.5 billion deal starting with the 2014 post-season. In late 2018, Fox announced an extension of the deal through 2028 worth an estimated $5.1 billion. MLB also had a seven-year, $5.6 billion contract with ESPN through 2021 and a smaller ($2.8 billion) agreement for limited games with Turner Broadcasting for 13 regular season Sunday games through 2021. ESPN extended its deal for seven years starting in 2022 for a total of $3.85 billion. FOX and TBS hold additional broadcast rights from 2022-2028 for $5.1 billion and $3.29 billion respectively.

The National Basketball Association (NBA) began an eight-year, $7.5 billion deal with ABC, ESPN and Turner in the 2008-09 season. That deal was extended in 2014 for nine years and $24 billion ($2.7 billion per year). In July 2024, Disney, NBC and Amazon jointly signed a deal for an 11-year, $75 billion contract starting in the 2025-26 season (this includes a $2.2 billion 11-year deal for WNBA rights). The NBA also broadcasts games through NBA TV.

Soccer is the sport that attracts the most TV viewers on a global basis. Top teams and leagues are posting phenomenal growth largely due to lucrative television contracts.

In recent years, ESPN had lost millions of TV subscribers as increasing numbers of viewers cancelled their cable and/or satellite subscriptions. The network dropped from a high of almost 100 million households during 2011 to less than 80 million by 2020. This is a result of the so-called “cord-cutting” trend, where many consumers are opting-out of expensive monthly cable contracts that offer hundreds of channels—most of which they don’t watch. Instead, they are subscribing to smaller bundles of channels or viewing on internet-based platforms. At the same time, ESPN has recently been paying ever-higher fees to leagues for rights to broadcast major sporting events. Another effort, ESPN+ is a parallel streaming app similar to one offered by HBO. The service launched in April 2018 and had 24.8 million subscribers as of the end of the first quarter of 2024.

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