By Jaboner Jackson 8 am | Rock Mayock did an excellent job reviewing the new television contract negotiated by the Pac-12 Conference yesterday. The new television contract highlights the increasing role that broadcast sports play on television. With fragmented viewership spread over hundreds of channels, networks have used sports to consolidate audiences. The value of sports to networks has increased greatly over the last two decades, beginning in 1994, when upstart network, Fox, put together a $1 billion dollar package to gain television rights to the NFC.
Several sources have told me over the past few months that the NFL anticipates their own revenue from television to more than double with the next contract, which has yet to be negotiated with the networks. The current contracts, which took effect in 2006, right after the last Collective Bargaining Agreement was signed between the NFL and NFLPA, runs until 2013. The contracts are spread out between CBS, NBC, Fox, ESPN, and the NFL Network.
The recent trend in the industry is towards securing broadcast rights no matter what the cost. The Los Angeles Lakers made news in February when they signed a 20-year contract with Time Warner Cable to broadcast local games. The University of Texas also made a splash recently when it negotiated a contract with ESPN worth $300 million over 20 years. The Los Angeles Dodgers were in negotiation to land a $3 billion contract with Fox before Frank McCourt’s team was taken over the league.
The value of the current NFL contracts are almost $3.1 billion a year, which suddenly looks cheap, considering the NFL is the most viewed sport in America. This value excludes the amount DirecTV pays for NFL Sunday Ticket, which brings in another $700 million a year. The owners are expecting their revenues to at least double in the next round of negotiations. Of course, they aren’t talking about it publicly, because of the state of the current CBA. But it’s going to happen. And they would rather that you not know.