What the DOJ's NFL investigation could mean for networks, fans - ESPN

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As the NFL gets ready to negotiate billions of dollars in new media contracts, which determine where fans will watch games and how much they'll pay to do so, a new entity has joined those talks: the federal government.

The Department of Justice has opened a probe into whether the NFL is harming consumers in the way it sells its broadcast rights.

A growing chorus of lawmakers and fans have expressed concern over the NFL and other leagues putting more games on subscription streaming services, leading to potentially increased costs for viewers. While the full scope of the probe is unclear, the NFL and other leagues have a limited antitrust exemption as part of the Sports Broadcasting Act of 1961, which allows them to sell the broadcast rights to all games together to make them more widely available to fans.

The NFL currently has television contracts with ESPN/ABC, NBC Sports, CBS Sports, Fox Sports, Prime Video and Netflix to air its games. Subscriptions are required to watch "Monday Night Football" games on ESPN that aren't simulcast on ABC, "Thursday Night Football" and the Black Friday game on Amazon's Prime Video, and Christmas games on Netflix. Some international games also air on NFL Network, which is owned by ESPN. Select postseason games also require subscriptions. The NFL has also awarded select games to ESPN+, YouTube and Peacock in the past.

All games air free on the local stations in the broadcast markets of the teams playing.

The feeling inside the NFL league office is that the Murdoch family, which owns Fox Corporation, is the key driver behind the DOJ probe, according to multiple people familiar with the matter. Fox currently pays more than $2 billion for its Sunday afternoon package, but the league has telegraphed that it plans to exercise an opt-out clause in its current deals after the 2029 season.

A spokesperson for Fox declined to comment.

In February, Fox Corp. chief executive officer Lachlan Murdoch said Fox would be able to "offset" any cost increases that accompany a renegotiation: "We would certainly consider balancing or rebalancing our portfolio as we move forward when those opportunities become available," he said.

One person with direct knowledge of the league's thinking described the internal reaction to the DOJ actions as "surprised," but the person added that there had already been general dismay and a belief within the NFL that Fox was drumming up Congress and the Federal Communications Commission to examine the league's antitrust exemption.

According to another source with direct knowledge of league matters, the NFL's general counsel, Ted Ullyot, gave an update on the matter and the potential for a DOJ investigation during league meetings last week in Phoenix.

"Ted didn't seem that concerned during his update, but we shall see," the source said.

The league's rights deals currently pay the league more than $10 billion per year and run through 2033, with ESPN's deal going through 2034. As part of those opt-out clause talks, the league will undoubtedly ask media companies for more money, given the NFL's vast popularity. Eighty-three of the 100 most-watched TV events last year were NFL games, according to Nielsen. But the league could also create new packages of games by taking them away from Sunday afternoon, where they currently air on CBS and Fox. Fox also remains the only media company without a subscription streaming service that runs exclusive content, where the NFL has increasingly experimented with new games. Prime Video broadcasts Thursday night games and Google-owned YouTube owns the rights to Sunday Ticket, a paid subscription that gives viewers access to out-of-market Sunday games.