The NFL's current cash grab could have a direct impact on Hollywood.
Matthew Belloni of Puck, whose beat primarily centers on Tinsel Town, explains that pro football's effort to squeeze more from broadcast networks could bust the budgets for big-screen projects.
In his latest What I'm Hearing newsletter, Belloni explains that MoffettNathanson predicts the NFL's annual TV haul will increase from $10.1 billion to $15.9 billion. And Belloni shares this key line from the spacebar-challenged analyst's assessment of the impact of that investment: “We expect media companies will be forced to offset higher NFL costs through a reallocation of content budgets mitigating the EBITDA impact."
In English, it means the NFL will draw from Fox, CBS, NBC, and ESPN/ABC money that would otherwise go to TV and film projects.
Obviously, it's not the NFL's problem. The ROI from movies and TV shows is inherently speculative. The NFL is a sure thing; if you show it, they will come.
No one is holding a gun to the heads of the network executives. They can say no. The thinking is they won't. Even if it means saying no more often to the funding of non-sports projects.
The NFL's effort to jack up the price paid for pro football content traces to the new NBA deals. With NBC now paying $2.5 billion per year to the NBA and only $2 billion to the NFL, the NFL has decided something is very wrong with that picture. The recent sale of Paramount to Skydance opened the door for the NFL to reopen the current CBS deal, and the expected bump from $2.1 billion per year to $3 billion per year will be followed by an effort to get the other networks to pay more, too.
As noted recently, Fox owner Rupert Murdoch has sicced his Wall Street Journal on the NFL’s broadcast antitrust exemption. Belloni calls that effort "particularly ironic," given that Murdoch became the prime mover in the NFL's nitric-oxide paper chase when Fox grossly overpaid for the NFC package in 1994, pushing CBS to the curb. Which, four years later, pushed NBC to the curb for the AFC package. Which, eight years later, turned Monday night into Sunday night when NBC snatched one of the two ESPN/ABC prime-time packages.
Two decades later, the streaming companies are hovering and the NFL is using their insatiable appetites and unlimited pockets to push the networks to the brink.
While none of the networks are likely to see their NFL books turn the page to Chapter 11, the next wave of pro football price hikes could divert just enough gold to impact the silver screen. Which means that, while the bulk of the league's games will remain on free TV, there could be a less robust array of choices when it comes to movies and TV shows.
