David Gelles NFL deals come with digital rights

When the National Football League yesterday struck a trio of eye-popping deals with big TV networks, the focus was rightly on just how valuable live sports have become to broadcasters today.

But buried in the press releases heralding the agreements (which will bring the NFL $24bn over nine years) was some rather revolutionary news: the TV networks also secured the digital rights to the most popular sport on television. 

The US television industry is in the midst of a bumpy transition to the web. While the overall number of pay-TV customers is flat or slightly down, those with TVs are watching more than ever. At the same time, Netflix and Hulu are providing new high-quality viewing options on the web, even as the industry’s own online initiative — TV Everywhere — gets off to a slow start.

In theory, TV Everywhere allows pay-TV subscribers to authenticate themselves online and then watch live programming on computers and tablets. Not every cable company has embraced the initiative, however, and turf wars are breaking out over fragmented rights. The result is slow consumer adoption.

But if NFL games — consistently among the highest rated broadcasts each week, but not yet widely available for online viewing — were available to watch live on laptops and tablets, that could give TV Everywhere the kick-start it badly needs.

In a note about CBS, one of the networks in yesterday’s deals, Macquarie Capital analyst Tim Nollen zeroed in on the importance of digital rights. ”The CBS deal comes with digital streaming rights that could pave the way for live online broadcasts,” he said. “We would not be surprised to see tablet broadcasts emerge at some point as well.”

This could also allow networks including CBS to ask more from the local stations that carry their signals. “We believe this deal can help CBS in negotiations for high-margin retransmission fees from affiliate stations, especially considering the new streaming rights,” Mr Nollen said.

There are some wrinkles in the deals. Namely, the digital rights do not seem to include streaming to smartphones, according to a statement from Fox, another one of the networks that renewed with the NFL: ”The agreement also includes fully authenticated ‘TV everywhere’ rights, which enables Fox Sports to offer games it broadcasts . . . on FoxSports.com, tablets and other digital platforms, excluding mobile phones.”

Even without smartphone rights, these digital rights deals could be a boon for the big broadcasters, and set up a breakthrough moment for TV Everywhere. And for consumers, it means that the most popular live programmes on TV might not have to be watched on TV at all, but on a desktop, laptop, or tablet.