Analysts: NFL Deals A Threat To Retrans

The new NFL TV rights deals announced yesterday ensure that the Big Four affiliates will broadcast TV’s most attractive programming for years to come, but the news is not all good, particularly for CBS and NBC affiliates, according to two prominent Wall Street analysts.

“Streaming games outside the bundle ends the retrans gravy train,” says Rich Greenfield, an analyst at LightShed Ventures.

“We think that the biggest losers … will be the non-O&O affiliates of NBC and CBS,” says the MoffettNathanson firm.

The culprit is the streaming rights. In addition to broadcast rights, the network’s parent companies — ViacomCBS, Comcast, Disney and Fox — also acquired the streaming rights in contracts that stretch until 2033 and total a whopping $113 billion, nearly 80% more than they and Amazon are now paying for rights that expire in 2023.

Amazon is paying $11 billion for Thursday Night Football, which has proved a financial burden for current broadcast rightsholder Fox. Amazon has had non-exclusive rights to some TNF games since 2017; its new deal makes it the exclusive outlet.

The streaming and the loss of broadcast exclusivity it entails will hurt affiliates in two ways, the analysts say. It will accelerate the erosion of cable and satellite subscribers, the ultimate source of broadcasting’s retransmission consent fees, and reduce the affiliates’ clout in negotiating for those fees.

“We now have confirmation that every single NFL package allows for games to be streamed on digital platforms that do not require the bundle,” Greenfield says. “To be clear, these are simulcast rights, not the ability to shift the content — meaning, programmers have to broadcast on their primary destination (broadcast network or cable network) and can then simulcast on a subscription streaming service owned by the same parent company,” he notes.

According to Greenfield, ViacomCBS plans to simulcast all of its CBS Sunday afternoon games within both tiers of Paramount + and possibly some on Pluto TV. Indeed, it has told investors that its lower tier will contain games that are stand-alone — not part of an affiliate or O&O broadcast.

NBCU, which renewed Sunday Night Football, will simulcast some of the games on Peacock. “We suspect Peacock will place the games on Peacock Premium vs. the fully-free version of Peacock,” Greenfield says.

Although Fox has secured streaming rights, it’s not clear how it will use them. One possible option is placing some of the games on Tubi, on a newly created pay tier. Right now, Tubi has just one ad-supported tier.

MoffettNathanson thought that Disney got the best deal from the NFL this time around. Its package allows shifting some Monday Night Football games from ESPN to ABC and it puts the broadcast network in the Super Bowl broadcast rotation for the first time since 2005.

MoffettNathanson says it believes that Disney, whose streaming play is ESPN+, and Fox will go slow on streaming. “Both … seem willing, for the time being, to use the NFL within the ecosystem to drive higher affiliate fee payments,” it says.