The Disney-NFL Deal Shows Who Owns TV

The NFL is the most important thing on TV.

That’s not news: NFL games accounted for 72 of the 100 most-watched shows last year.

But a set of new deals between the NFL and Disney’s ESPN just underscores the enormous value pro football has for TV companies.

The transactions, announced Tuesday night, involve rights for various NFL assets — among them, ownership of the league’s NFL Network, as well as access to its RedZone live highlight show. In return, the NFL will get a 10% stake in ESPN itself, valued at an estimated $3 billion, as well as new license fees.

But the most valuable thing the NFL’s media arm owns is the right to show seven NFL games a week. And Disney is only going to get three of those.

The NFL is keeping the other four for itself. And since it no longer owns its own network, you should expect to see it license the rights for those games to other big media companies, like Netflix.

It’s possible that the NFL wanted to sell all seven games to Disney, and was simply asking too much. But my hunch is that it’s the opposite: Disney would want all the NFL games it could get, but the NFL thinks it can get even more money by taking one package of games and turning it into multiple packages it can sell to multiple owners. (For the record: Both Disney and the NFL note that Disney will take some Monday night games it was already showing and turn those into games on the NFL Network, so it will still show seven games via that channel.)

Because that’s what the NFL has been doing for years: Slicing and re-slicing its game rights, and selling them to a growing list of buyers. In 2021, for instance, Amazon signed a deal to stream Thursday night games for about $1 billion a year. Now, Netflix has a deal to show two games on Christmas. And YouTube will stream the first game of the season next month.

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As I wrote last October, the NFL has tried to find takers for the NFL Network for years. The consensus I heard at the time from would-be partners: They all wanted the games the NFL aired on its own network, but the other stuff the league was offering was much less valuable. Ratings for the NFL Network, for instance, only really spike for the games and the league’s annual spring draft. The rest of the time, it’s not bringing in a lot of eyeballs.

But the fact that the NFL got the deal done now, while hanging on to more than half of its games, suggests to me that the league’s leverage has increased as traditional TV has withered: If you don’t have the NFL, you don’t have must-watch TV.

And ESPN, which is launching its new streaming-only service on August 21, needs all the must-watch TV it can get its hands on — even if it can’t get all the stuff it wants.

“Our focus all along was finding the right deal. Not just a deal,” Hans Schroeder, who heads media deals for the NFL, told me Tuesday night when I asked why it had taken the league years to find a buyer for these assets. “We feel like we did this with ESPN.”

Neither the NFL nor Disney would discuss the details of the deal with me — like how much Disney is paying for its extra three games. But both pushed back at my notion that the primary component of the deal was the three live games, pointing to all the other assets trading hands.

On the other hand, when Disney CEO Bob Iger was asked Wednesday on an earnings call to explain the value of the deal, he led with the additional games he was getting: “We’re giving NFL fans more opportunities to watch more NFL games than they’ve ever had before,” he said.

Translation: More NFL content is good. More NFL games are gold — even if it’s just a few more games a year.