Charles Robinson, an NFL reporter at Yahoo Sports, joins Yahoo Finance to report the NFL finalizing an 11-year media rights deal and adding Amazon Prime Video as an exclusive partner to broadcast Thursday Night Football.
Video transcription
MYLES UDLAND: Yesterday, after the market closed, the NFL and its media partners announcing the long-anticipated formalized media package with most of its existing partners – some changes to the edges, let’s get into that – 11-year deal, it might be worth more than $ 100 billion. Charles Robinson of Yahoo Sports has joined us now for some details. Charles, let’s start with what stands out to you as the most important part of this business. I think some people think it’s the Amazon package. Others would say it is the Super Bowl returning to ABC. How– how did you see that?
CHARLES ROBINSON: I mean, Amazon joined the chat. This is what is most important to people in the NFL. I can tell you, the NFL owners giving Amazon that Thursday night rights package starting in 2023 is – it’s just a monumental occurrence for the NFL. Because look, when Roger Goodell in– in 2010, he said to the owners, we want to reach $ 25 billion in annual revenue by 2027. What Roger Goodell didn’t know in 2010 was that Amazon would be a $ 1.5 trillion company in 2021. He didn’t know that Amazon would be a content carrier and essentially – really able to buy any of the networks that were currently partners with the NFL. Therefore, becoming an Amazon partner for NFL owners is a significant step.
And I think part of that deal that is interesting is that the NFL ticket package for Sunday has not yet been settled. It was not part of this agreement. Therefore, it still expires after 2022. There is no guarantee that it will continue with DirecTV. ESPN is vehemently pursuing this. But I know that there are some NFL owners who would love to involve Amazon there and make it part of their package – potentially Prime -. I still believe that this is something that leans towards ESPN.
But in the long run, when you look at this deal, there is a seven-year cancellation clause in the 11-year deal that can be triggered with most, if not all, of the partners before the 2030 season. If the television landscape change significantly, or Amazon comes and says, hey, we want to have a bigger bet on the table, you can see this opt-out. But in reality, it’s about Amazon joining as a business partner for the future of the NFL.
MYLES UDLAND: We just got that graph of the annual spending of – from each of the partners. And it’s interesting that the cable network that has, well, you know, the network that has the least games, I think we could say, ABC ESPN, has the– the biggest expense. Where does this relationship – like, where does it go from here?
And do you think, you know, the Disney team is leaving happy with this business? Because certainly at the end of the last package, especially around the Monday night games – the quality, the games, the ad booth, all that stuff – it looked like – man, ESPN kind of had the rough end of the deal .
CHARLES ROBINSON: Well, one thing that ESPN achieved with this deal, which it really wanted, was the ability to make games more flexible. And, you know, the league said, look, starting at week 12, if you want to make your fights more flexible on Monday Night Football, we’re going to allow you to do that. This is a big change. I mean, this is – and not just for ESPN, because it allows ESPN to sit there and bring the best content possible for their – their broadcast rights, but also for NFL fans.
Many NFL fans, you start to complain when we get to the end of November, December, that there were a lot of dog games on Monday Night Football. There are a lot of bad teams that have been stopped. Although the NFL told ESPN, we will not only allow you to flex from week 12 and bring the best matches to the table, we will also allow you to expand the number of teams that can appear twice on Monday Night Football to four . Now, if they really want to choose four teams and say, they are – these four teams, we want them on Monday Night Football twice this season, the NFL is going to allow that. So, ESPN has achieved a few things with this business.
And again, I think the Sunday ticket package, the fact that – I think the deepest exploratory conversations that the NFL had was with ESPN about bringing that to ESPN Plus. So there’s still a carrot at stake for ESPN, and when you talk about the overall spend, that’s where ESPN sits and says, hey, we’re giving you more money in this business than any other part you have, including Amazon- – we should really get the fundamental rights not only for Monday Night Football, but also for the Sunday ticket franchise.
MYLES UDLAND: It seems that Chiefs fans should prepare for at least one Monday night game a year, at least – certainly the season ticket holders. Charles, let’s talk a little bit about how it influences free agency and how players will feel about it. Obviously, the ceiling is falling this year due to the impact of COVID. I don’t think the Players Association was very happy with how part of it was. Obviously, they negotiate all of that. How do you think the players and their fields are thinking about this deal for, you know, the next contract for many of these guys that will arrive in two, three, four years?
CHARLES ROBINSON: Well, there is no doubt that the agents are not satisfied with the fact that the limit has been reversed. And we’re particularly starting to see the effects of that on the free NFL agency on this second wave. There are – we always call this in the NFL a strong second wave, where you have, basically – the first round comes out, it’s massive business, and then you have some guys who are positioned to really choose and choose in the second round, both on the side of team as well as on the player’s side. And you’ll still see a few seconds – some really big contracts in the second wave.
It will not happen here. Not only will this not happen, you will see many free mid-level agents stay for a long time at the free agency. This is all due to the reversal of the limit. And, you know, to sign a massive TV rights deal in the middle of it, you’re going to see agents who say, this is ridiculous – we have this limit reversal and you’re celebrating this massive deal. But the union sits there and says, hey, this is a revenue share – you should be happy, nobody should be upset about – that the league signed this gigantic and gigantic deal with TV.
And by the way, remember that it starts in 2023, so that’s when you’ll see most of this portion for us to really roll over to the limit. So, the NFL teams now, in the way that many of their salary cap models are built, this year was a reversal, the next year will be considered, in quotes, a “fixed cap”, meaning that next year will really be the that this year’s cap should have been. And then 2023 is the gap.
This is what all teams expect, that in 2023 there will be a big advance in capitalization. And then, every year after that, the – the graduation steps are going to be big. And I talked to some teams that say, $ 250 to $ 260 million in five years from now is realistic for the ceiling, which is where the salary ceiling could be. Which is significant, considering that we are looking at $ 183 million now.
MYLES UDLAND: And maybe it is time for Mahomes to restructure his business again to increase the annual limit reached, which I think is around 50 million. But, as you know, the numbers are always done in the NFL, and the limit hits can always be massaged. We’ll see what’s going on in New Orleans this year. Okay, Charles Robinson of Yahoo Sports, thanks for continuing this morning. Always fun – we’ll talk soon.
CHARLES ROBINSON: Thanks for receiving me.