ESPN and the NFL are close to an agreement to give the media company a much larger bundle of the league’s broadband, mobile and international rights, including the ability to stream “Monday Night Football” games on broadband and wireless platforms.
The digital deal will certainly grab the full attention of the NFL’s other network partners, who could be looking to further their digital and mobile rights with NFL content. CBS and Fox have looked into streaming at least one of their Sunday afternoon games but have no concrete plans to follow through with that yet.
ESPN spokesman Mike Soltys confirmed the talks late last week, saying the two sides were “finalizing a deal for significantly expanded U.S. digital and international rights.”
The pending deal developed as the league opened ESPN’s $1.1 billion annual contract to insert language that outlined payment terms in the event of a lockout. The contract already called for ESPN to make such payments, but the NFL wanted its language to mirror previously agreed to contracts with CBS, Fox and NBC.
The digital deal will give the Bristol, Conn.-based network the right to stream “MNF” games via broadband, sources said. ESPN executives aren’t certain whether they would exercise those rights, even on its broadband site ESPN360. ESPN makes more than $4 per subscriber per month from cable and satellite operators, and ESPN is reluctant to put its highest-rated content on broadband and risk devaluing its linear TV deals with MSOs.
For the past two seasons NBC Sports and the NFL have streamed the “Sunday Night Football” game on NBCSports.com and NFL.com. The online feed has had limited success, while offering a different viewing experience featuring multiple camera angles and interactivity.
ESPN will also stake a big claim to the mobile area, though several questions remain about the offer. It’s unclear whether the NFL would allow ESPN to stream its NFL content via a wireless carrier other than Verizon Wireless, which signed an extensive mobile content deal just two weeks ago that did not include rights to “MNF.”
“It might not be fully cooked,” said Dallas Cowboys owner and NFL broadcast committee member Jerry Jones in response to a question about whether ESPN would be allowed to stream “MNF” to Verizon or other carriers. “I am not really sure that I want to answer that right now.”
Even with ESPN as the intermediary, it’s hard to believe the “MNF” rights won’t end up on a Verizon platform. “They are our rights to sell,” said NFL spokesman Brian McCarthy.
The cash bonanza the NFL recently realized by selling rights to Verizon in a $720 million deal shows there’s increasing value in mobile content.
“After a deal of this magnitude gets done, every rights holder is looking closely to see if they can drive more revenue from their content,” said Chris Russo, chief executive of Fantasy Sports Ventures and the former top media executive at the NFL.
The proposed deal also gives ESPN much broader highlight rights, both online and mobile. ESPN’s original deal gave the media company limited highlight rights, as the NFL has sought to make NFL.com the major online destination for such clips.
The new deal would allow ESPN to use highlights on its ESPN.com home page, its local Web sites and to stream them to mobile devices. It also will be able to stream games, though that part is still is taking shape.
One of the biggest parts of the deal is internationally, where ESPN will gain the rights to televise its “MNF” game and “Monday Night Countdown” pregame show in the United Kingdom via its newly launched British cable channel, ESPN UK.
“MNF” has not been telecast in Britain for the past several years. This deal, however, marks the first time in more than a decade that a TV network other than Sky Sports will carry live NFL programming in Britain.
Since 2006, the league has streamed games overseas via “NFL Game Pass,” a Sunday Ticket-style service that streams all games for around $240 per season.
ESPN and the NFL negotiated their digital deal at the same time as they both reworked the network’s “MNF” contract. The NFL looked to insert language into the deal to ensure payments continue in the event of a lockout.
Sources have said that the two sets of talks were separate and are not related.
The networks have said that they consider the payments loans that will be paid back by the league if games aren’t played. At an industry conference earlier this month, Fox Sports’ Ed Goren said, “It’s not as if we are running a charity. We give every year. That money comes back.”
When asked if it was a loan, Goren replied emphatically, “With interest.”
NBC Universal Sports and Olympics Chairman Dick Ebersol also said that the relevant language in the new TV contracts signed last year by NBC, Fox, DirecTV and CBS was no different than what’s been in past contracts, questioning the furor over the networks guaranteeing payments.
“I have been around longer than anybody else, and I don’t remember a deal, certainly all the way back to the early 1980s, that this wasn’t in,” he said. “This is not a new development.”
The broadcasters do get their money back with interest if games aren’t played. The one exception is DirecTV, which would not get all of its money back for games lost, with the reasoning being that the network is able to secure subscribers because of the NFL, and the loss of a few games would not materially harm that income.
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