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NFL ratings boost could raise TV broadcast fees for media deals

NFL commissioner Roger Goodell has said the league will consider streaming services obtaining future broadcast rights. Photo by Kevin Dietsch/UPI
NFL commissioner Roger Goodell has said the league will consider streaming services obtaining future broadcast rights. Photo by Kevin Dietsch/UPI | License Photo

Jan. 2 (UPI) -- Ratings for NFL games are up on every major network, meaning league officials could seek higher fees when negotiating future broadcast rights.

Fox, NBC and CBS -- network partners of the NFL -- each announced major increases in NFL viewership at the end of 2019. Fox ended the 2019 regular season with its best viewership numbers in three years.

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NBC's Sunday Night Football ended the season with its best viewership since 2015, averaging 20.5 million viewers. CBS said the network had its most-watched regular season in three years, seeing a four percent increase from 2018.

ESPN's Monday Night Football had its most-viewed regular season since 2015.

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The NFL is likely to use the information when negotiating new media rights deals in 2020, before the league's current agreements with the networks expire in 2022. NFL and network officials told CNBC that the NFL makes more than $5 billion annually from the selling of the broadcast rights for games, but the ratings boost could provide the league leverage for raising the costs.

Former CBS Sports president Neal Pilson told CNBC the NFL could get a minimum of 25 percent to 30 percent more in broadcast fees with new contracts.

ESPN agreed to pay $15.2 billion in 2011 to renew its contract with the NFL. Fox and CBS each pay the NFL about $1 billion annually. NBC pays just under $1 billion each year to broadcast NFL games.

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NFL viewership saw a drop in 2016 and 2017, falling nearly 10 percent during the 2017 season, according to Nielsen. Ratings dropped eight percent from 2015 to 2016. Many factors likely are linked to the drop, including the league being challenged by President Donald Trump and fans being in disagreement about players who protest police brutality and racial inequality by kneeling during the national anthem before games.

Fox, CBS and NBC have nine-year contracts to air Sunday NFL games. Those deals expire after the 2022 season. ESPN's exclusive Monday Night Football pact expires after the 2021 season. The NFL also cashes in on its Sunday Ticket package deal with AT&T's DirecTV, which has a $12 billion contract with the NFL.

Viewers are now watching sports in new ways, compared to when the NFL entered the contracts with its current broadcast partners.

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Digital streaming poses a threat to those networks retaining the contracts. NFL commissioner Roger Goodell has said the league will look at the possibility of streaming services obtaining broadcast rights NFL games.

The NFL already allows Amazon to stream Thursday Night Football games. Amazon paid $140 million to stream the games for two seasons, with that deal set to expire after the 2019 season.

The NFL and player leadership are negotiating a new collective bargaining agreement, with the parties exploring the future of their relationships with broadcast partners and how revenue is disbursed. The existing agreement expires after the 2020 season.

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