Patrick Mahomes led a fourth-quarter comeback in the Super Bowl, the Kansas City Chiefs danced in a confetti shower and the last NFL season came to a close in thrilling fashion for fans.
Then the NFL turned its attention to something even more pivotal for teams and players: an off-season it hopes will be the most lucrative in sports history, flush with tens of billions of dollars in new media deals that would line the pockets of the country’s richest league for the next decade.
But there’s one hurdle in the way: concluding a new collective bargaining agreement between the NFL and its players. Executives say that a deal in the coming weeks could be the lever that opens up a summer of bidding for the most valuable properties in all of TV.
If a CBA fails to come together imminently, though, both sides fear they will miss an opportunity to capitalize at a time when they feel the league’s leverage in media negotiations has never been stronger.
The NFL is coming off a season that underscored its status as America’s unrivaled entertainment behemoth. Its ratings rose, while competitors such as the NBA, MLB or practically anything else on television, have seen their numbers sag. Nearly three quarters of the 100 most-watched broadcasts in 2019 were NFL games.
People familiar with the talks say there’s a growing imperative to get the next round of media deals done quickly. They say the league wants to cash in before things take a turn for the worse—a scenario they worry could unfold if they don’t get it done this off-season.
Some decision makers fear a potential economic downturn that could limit the budgets of potential rights holders who face the prospect of spending billions on NFL games. They also watched how NFL ratings fell sharply during the last presidential election, a prospect they believe could repeat itself in 2020.
Which is why executives from both sides of the collective bargaining negotiations believe the next few weeks could have enormous ramifications. “The sooner these things get done and locked up, the better,” one executive said.
The strange thing about the urgency over this issue is that it may not appear to be urgent at all. The current CBA extends through the 2020 season, giving the two sides 18 months to work things out. The NFL’s deal with
Walt Disney Co.
’s ESPN isn’t up until after the 2021 season, while pacts with
’s NBC go through 2022. People familiar with CBS, ESPN and Fox’s thinking said they’re ready to get into negotiations as soon as the NFL is.
Disney Chief Robert Iger and Fox Corp. CEO
both told analysts on recent earnings call that there have only been very preliminary talks with the NFL about the next round of deals.
But in recent weeks, player representatives have met multiple times to mull the NFL’s proposal for a new CBA that would ensure labor peace for a decade. Although there is no official deadline to hammer out a deal, one executive said the next two weeks will be “critical” for determining if a labor deal will get done. The most divisive point of the current offer has been the league’s desire to add a 17th regular-season game—an idea that could grow revenue even further.
While some players have outspokenly protested this for health and safety reasons, others are cognizant that the new deal brings significant advantages: the players’ share of the revenue would go up by at least 1 percentage point, giving them roughly $160 million more from the league’s approximate $16 billion in revenue in the deal’s first year, and that figure could rise if and when the 17th game were implemented.
Over the course of the deal, the changes could be worth billions of additional dollars to the players, one of the people briefed on their discussions said. Other advantages to the players within the current proposal include higher minimum salaries, improved benefits, and a less punitive drug program.
The players also worry that if they don’t strike a deal soon, any offer they would receive from the league at this time next year might be worse for them, the person added. That’s because there’s a widespread belief that the league wouldn’t be able to maximize its TV deals without a completed CBA, which would guarantee to the networks that there wouldn’t be a lockout or strike for the foreseeable future. And NFL executives want to spend their summer working on renegotiating those media deals.
For now, the NFL sees itself in a position of strength, coming off a season highlighted by young stars who provided a jolt to the game’s popularity. Mahomes, only 24 years old, led Kansas City to its first Super Bowl in half a century. Baltimore Ravens quarterback Lamar Jackson, 23, became the youngest MVP in league history—usurping the title from Mahomes. Ratings during the regular season rose 5%.
But the NFL is worried that its negotiating power might change. They’re concerned that the economy could be weaker and tighten budgets. Some inside the league also expect a ratings decline during the 2020 season after their numbers fell 8% during the last presidential election cycle in 2016.
“If Donald Trump is debating Bernie [Sanders] or [Mike] Bloomberg, and it goes up against an NFL game, it’s going to hurt our ratings,” one executive said.
Share Your Thoughts
Do you expect the NFL’s ratings to decline during the 2020 season due to the upcoming presidential election?
Write to Andrew Beaton at firstname.lastname@example.org
Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8