Time to Break Up the NFL

If recent press reports are accurate, the NFL is close to renewing its broadcast rights deals with NBC, CBS, Fox and ESPN.  Word is the broadcasters will pay twice their current rate and ESPN’s fee will increase 30%.

Assuming these reports are accurate, is anyone else deeply troubled by the news?  A handful of billionaires, practically all of them white men, unilaterally imposing (or extorting) massive price increases on the general public without their consent.  All done in the middle of a global pandemic and significant economic hardship.

Some will say the NFL is just getting what the market will bear.  Their product generates larger live audiences than any other media property, a rare commodity in our increasingly fractured landscape.  Without the NFL the traditional TV ecosystem will collapse.  No one is putting a gun to the heads of the network execs making these decisions.  Don’t blame the owners.  Sports are a business.  They are being good capitalists, doing what other smart business owners do every day, measuring supply and demand to secure the best price for their product. 

Yet this position increasingly feels out of touch to me.  A key reason why our politics have become so broken is that millions of people believe a tiny group of ultra-rich elites are stacking the system and rewards in their favor.  The everyday person has no say, no choice, no opportunity.  The NFL media rights negotiation presents a textbook case – the number of true decision makers across the league and networks probably numbers less than 50.  And they’re far from representative of the typical American household.

Also, and I realize this sounds hopelessly naïve, but sports are not just a business.  This mindset is the root of so many of the challenges surrounding sports at all levels today.  Participating in and enjoying athletic competitions have been an essential component of human culture throughout history.  Sports has healed divisions and brought people together in times of war.  It’s in our interest as a society to ensure access to sports remain as open and affordable as possible. 

I don’t begrudge anyone’s ability to make money in sports.  However a few billionaires motivated strictly by financial interests should not be permitted to act as the sole gatekeepers to a public good like the NFL.  The owners have consolidated too much power in our media ecosystem.  Unchecked, concentrated economic power in the hands of a few is the enemy of a free society.  It’s the same reason many, including me, are concerned about the outsized role Google and Facebook play in the digital economy.

Those of you who know me understand that I’m as much a supporter of free markets as the next person.  I don’t come to this lightly.  Excessive intervention into marketplaces by government authorities who don’t fully understand the business often leads to unwanted, unintended outcomes.  Yet when marketplaces become anti-competitive and dominated by a few, the state is the only entity capable of rectifying the situation.

I think that time has come with the NFL.  For all their scale, the networks are clearly no match for the league.  And the system as constructed doesn’t provide enough protection for the average consumer against the wonton greed of a select few.  Sure, a person could drop their cable or satellite subscription if they don’t want to pay. They could figure out how to set up a digital antenna to get the broadcast networks for free.  But why should Jerry Jones or Bob Kraft be in a position to dictate a huge price increase to an out of work Cowboys or Patriots fan who likes their current bundle of channels and just wants to sit back, forget their troubles and enjoy the game?

This is a complex problem and I don’t pretend to have all the answers.  The current web of retransmission and must carry clauses woven into network carriage agreements with video distributors create the massive pools of dollars that fund these deals. The government has the power to impose regulatory reform – eliminating must carry rules for basic packages and capping retransmission fees – that would make it virtually impossible for networks and broadcasters to meet the NFL’s pricing demands.  Whatever the solution, ensuring access remains affordable should be a guiding principle of any regulatory involvement.

Consumers should have a choice as to whether they want to pay extra for the NFL.  If the NFL truly had to compete on price like OTT services such as Netflix and Disney+ they would never consider doubling the price.  Most people wouldn’t pay it. 

The NFL has actively sought partnerships with the OTT players, in part to apply pricing pressure on the traditional networks.  My sense is owners are very reluctant to fully embrace OTT right now because they know that the fan base will inevitably shrink.  None of those platforms yet deliver the scale of the traditional TV system. 

Amazon Prime reportedly is increasing its investment to secure the Thursday night package of games.  It will be interesting to see if Amazon absorbs the extra costs as a loss leader to drive more Prime engagement or offers tiered pricing.

It saddens me to come to this conclusion, but it seems clear that the owners, seeing the coming end of the traditional TV ecosystem are determined to land one last big score before the whole thing unwinds.  That kind of greed should not be allowed to go unchecked.

I’m sure many will disagree, including friends and colleagues in the business with more knowledge of these matters than me.  Regardless, I hope we can agree the time is past due to move beyond the “sports are just a business” mindset and engage in an inclusive conversation about how best to deliver affordable, great NFL content to the sport’s countless fans across the country.

One thought on “Time to Break Up the NFL

  1. Pingback: 2029: The End of the World As We Know It | For What It's Worth

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