Lachlan Murdoch has announced that Fox intends to adjust its sports rights portfolio if the costs associated with NFL broadcasting rights rise.
The NFL stands as the most lucrative content available on television today, prompting broadcasters to invest significantly in acquiring the rights to showcase its games. With indications that the NFL is contemplating renegotiating its existing media rights agreements ahead of schedule, broadcasters brace themselves for the inevitable increase in costs tied to NFL broadcasts. These renegotiations could happen as early as this year, although the current contracts are set to extend until 2033, with an option to opt-out in 2029 for most deals (the ESPN agreement allows a 2030 opt-out).
Recognizing that their current deals do not reflect true market value, the NFL does not wish to wait until 2029 to maximize its financial return. The league generates over $10 billion annually from domestic media rights, amounting to more than $100 billion over the lifetime of these contracts. When these agreements were initially established in 2021, they seemed appropriately priced, but it has since become clear that the NFL could secure even higher revenues.
A significant signal of this shift is evident in the NBA's recent media rights deals, which are valued at $75 billion over the next 11 years. Notably, despite the NFL consistently attracting larger audiences compared to the NBA, two of the NBA’s new media partners are paying more for those basketball rights than what they currently pay for NFL games. For instance, NBC invests $2 billion each year in Sunday Night Football, while it pays $2.45 billion for its NBA package. Similarly, Prime Video contributes $1 billion for Thursday Night Football but shells out $1.8 billion for NBA games, and ESPN spends roughly the same amount on both its NFL and NBA packages.
This disparity indicates that the current NFL contracts are undervalued in comparison to what broadcasters are willing to pay for NBA content. Given this context, the NFL is poised to capitalize on this market opportunity. Broadcasters are thus gearing up for discussions with the NFL much sooner than originally planned. For longstanding networks such as Fox and CBS, retaining the NFL is crucial for their financial stability. If the NFL were to issue a directive, Fox and CBS would be wise to comply promptly.
Fox anticipates that the NFL might demand a more substantial financial commitment than currently required. During a recent earnings call, CEO Lachlan Murdoch outlined the company’s strategy in response to the expected rise in NFL prices. He stated that Fox is ready to "rebalance" its sports rights portfolio, essentially signaling that some other sports programming may need to be sacrificed in favor of accommodating the increased costs associated with NFL rights.
Looking at Fox Sports’ lineup, there are several high-value sports rights that could be relinquished to help fund the NFL's escalating expenses. One prominent example is the FIFA World Cup, with this summer's tournament being the final event covered under Fox’s existing contract with FIFA. While the specific cost for the 2026 World Cup remains undisclosed—since Fox received a no-bid contract after the 2022 Qatar tournament was moved to winter—the network had invested $425 million for four tournaments between 2015 and 2022 (which included two men's and two women's events).
This represents an excellent deal for what is arguably the largest sporting event globally. However, it's highly likely that the World Cup will not be as cost-effective in 2030 and 2034, especially as streaming services and networks compete aggressively for broadcasting rights. If Fox aims to cut costs to allocate funds for the NFL, its chances of successfully competing against potential bidders like Netflix—who already secured rights for the next two Women’s World Cups—diminish.
If Fox is seeking to implement significant savings, its most substantial non-NFL media rights deal is undoubtedly its MLB package. Fox spends about $729 million annually for MLB broadcasts, which include the World Series, league championship series, and regular-season games. The network has been the exclusive broadcaster of every World Series since 2000. However, MLB intends to auction its media rights in 2028, with expectations for a notable increase in value.
The World Series is unique in that it is Fox’s only annual championship broadcast among major sports. In contrast, the Super Bowl is shared with three other networks, and the World Cup takes place every four years. Thus, while it would represent a considerable loss for Fox's sports division, letting go of baseball could yield significant savings. Given Fox's long-standing relationship with MLB, it seems more probable that the network will pursue a renewal for baseball in 2028 rather than for the World Cup.
Outside of the NFL, college football constitutes a significant portion of Fox's offerings. It appears unlikely that the network would reduce its college football inventory, especially considering its ownership stake in the Big Ten Network. Instead, Fox may consider offloading lesser properties such as non-World Cup soccer, having deals with CONMEBOL for Copa America, UEFA for the Euros, and CONCACAF for the Gold Cup, along with a limited selection of non-exclusive MLS games. Should Fox decide against renewing its FIFA World Cup agreement, shedding some of these smaller deals would be a logical next step.
Fox’s motorsports contracts, particularly its NASCAR agreement—which includes 14 Cup Series races such as the Daytona 500—are likely safe, as this agreement extends through 2031. Furthermore, Fox recently acquired a stake in Penske Entertainment, which oversees IndyCar, ensuring that this inventory remains in place.
This situation illustrates the harsh reality facing other leagues in the broadcasting sphere. With the NFL commanding a larger share of broadcasters’ budgets, this trend inevitably leaves less financial room for other sports. We have already observed ESPN taking measures to avoid overspending on sports rights, as seen with its recent strategies regarding Formula One and MLB. This dynamic is now poised to impact additional leagues as well.
