We’ve written at length about what the NFL’s quest to renegotiate its media rights deals this offseason means for the sports world.
Networks are preparing to “rebalance” their sports portfolios in order to afford the NFL’s new asking price. Leagues are now trying to beat the NFL to market in hopes of securing their slice of the pie before the NFL takes too much money out of the market. And smaller networks that aren’t competing for NFL rights might benefit from the downstream effects of their competitors needing to spend more for NFL programming.
But when we’re discussing media companies outlaying billions more per year for NFL rights, there are impacts that reach far beyond the world of sports.
A recent study from the analysts over at media research firm MoffettNathanson suggested that the NFL will up its annual media revenue from around $10 billion to $16 billion after its new deals are consummated. In other words, that’s $6 billion per year that media companies previously spent elsewhere that will now be dedicated to the NFL.
Matthew Belloni, the prominent Hollywood reporter who authors the What I’m Hearing newsletter for Puck, recently suggested that the entertainment industry could be the most negatively impacted by the NFL’s latest cash grab, citing MoffetNathanson’s note.
“Balancing these budgets ‘can be achieved by pulling back spending on other areas of content like scripted entertainment and films,’ the analysts wrote. Which likely means less money for Hollywood at a time when so many disruptions are already siphoning money away from Hollywood,” Belloni writes. “How much? We’ll see, and obviously there are risks to outlets that reduce their entertainment offerings—namely, non–sports fans could tune out or unsubscribe. But even a few billion in annual spend would be felt throughout the community.”
Broadcasters have already started to cut back on scripted entertainment programming in favor of cheaper-to-produce reality TV. But it’s not just the broadcast networks themselves that this will impact. Four of the NFL’s five full-time broadcast partners — CBS, ESPN, Fox, NBC, and Prime Video — are owned by parent companies that also own major film studios. Paramount Pictures, Walt Disney Studios, Universal Pictures, and Amazon MGM Studios all, at the end of the day, get their budgets from the same place CBS, ESPN, NBC, and Prime Video do. And if the parent companies are spending billions more on NFL rights each year, that necessarily means there is less to go around for the film studios.
It’s already a tough time for Hollywood as the industry faces plenty of its own unique challenges. But the ongoing NFL rights negotiations could end up having the most immediate impact on Hollywood from a dollars and cents standpoint as companies reallocate budgets towards the most important entertainment remaining in the United States: the almighty NFL.
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source awfulannouncing.com ’
