ESPN, NFL Extend Broadcast Agreement Through 2021 Season
ESPN extended its broadcast-rights agreement with the National Football League for eight years, giving the Walt Disney Co. (DIS) unit “Monday Night Football” through the 2021 season.
Financial terms weren’t disclosed in a statement from Bristol, Connecticut-based ESPN, which will also telecast the NFL draft and the Pro Bowl. The New York Times reported the deal was valued at $1.9 billion a year, or about 73 percent more than the network has been paying.
The cost of programming rights, particularly for sports, has soared in recent years as ratings increase. “Monday Night Football” has become the most-watched series in cable-TV history since it moved to ESPN from ABC in 2006. The series, which debuted in 1970, ranked eighth among broadcast and cable programs last year, averaging 10.5 million households a night.
“It keeps ESPN’s lock on a lot of NFL content and will continue to drive up their affiliate fees and secure audience and advertising growth,” said David Joyce, an analyst at Miller Tabak & Co. in New York, who recommends buying Disney shares. “The NFL is easily the most valuable cable-television franchise.”
The contract renewal potentially lets ESPN charge cable operators more for its programming. While contracts with pay-TV providers are private, ESPN probably charges distributors about $4.75 a month for each subscriber, according to Joyce, almost four times more than a cable network such as USA or TBS.
Football is the most-watched U.S. televised sport. The past two Super Bowls have been the most-watched TV programs ever.
ESPN will add 500 hours of studio programming and receive the right to broadcast games in 3-D under the agreement, according to the statement. The network also gets increased international broadcast rights.
“Today we’ve secured cable’s most valuable television franchise, along with an enhanced international package of year- round multimedia rights,” George Bodenheimer, president of ESPN and ABC Sports, said in the statement.
Disney, based in Burbank, California, fell 68 cents, or 2.1 percent, to $31.95 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have dropped 15 percent this year.
To contact the reporter on this story: Aaron Kuriloff in New York at akuriloff@bloomberg.net; Alex Sherman in New York at asherman6@bloomberg.net
To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net
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