Media

US football rights: ratings surge belies upcoming reckoning


Football wins suggest the game is far from over for the US’s legacy broadcast TV networks.

Mainstays Fox and ViacomCBS scored touchdowns through the early part of the National Football League season, when television ratings rallied 11 per cent year-over-year. This past Sunday’s tilt between the New England Patriots and Tampa Bay Buccaneers was the highest-rated Sunday evening game in almost a decade. Against the pre-pandemic 2019 benchmark, viewership had slightly increased even as far fewer Americans still watch broadcast television.

American football is by far the most important asset for broadcasters. But they have to spend big in order to compete with deep-pocketed tech giants, which also have younger audiences on-side. Besides, even as broadcasters pour billions of dollars into broadcast rights, millions of households are cutting the cord each year.

The Fox network relies heavily on live events, essentially sports and news. NFL football accounts for 60 per cent of its total overall audience, according to research firm MoffettNathanson. The likes of CBS, NBC and ESPN are only slightly less dependent. The NFL recently renewed its rights packages with the foursome, almost doubling the annual cost to $10bn.

Traditional media still holds its own when it comes to audiences and advertising. But just a third of households under the age of 50 still use linear television. That explains why NFL this year awarded the rights to its Thursday night game to Amazon, reportedly for $1bn per year.

The US tech conglomerate, or one of its streaming peers, could also be in line for another big bundle of sports rights, now held by DirecTV. The satellite provider, which AT&T bought for $67bn in 2015, was sold this year in a deal implying a $16bn enterprise value. That is a stark reminder of the extent to which the landscape has shifted as streaming usurps traditional incumbents.

Wins on the pitches have helped drive shares in Fox 38 per cent higher this year. Investors, keeping an eye on the bigger picture, should vacate the cheap seats and head for the exits.

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