SouthernWorldwide.com – The NFL’s lucrative broadcast model, valued at over $110 billion, is facing increased scrutiny from Congress, with House Oversight Committee Chairman Jim Jordan requesting NFL Commissioner Roger Goodell to testify on June 10.
The request, detailed in a letter sent to Goodell, is not a subpoena, meaning the Commissioner has the option to appear or decline. He is expected to communicate his decision to the Committee by June 3.
The hearing is slated to examine the Sports Broadcasting Act (SBA) of 1961, a piece of legislation that has significantly shaped the way professional sports leagues, including the NFL, negotiate and sell their television rights.
The letter specifically states the hearing will focus on how the distribution of professional sports has evolved since the SBA’s enactment 65 years ago. It will also delve into whether the antitrust exemption provided by the SBA has been used to the detriment of consumers.
Furthermore, the hearing aims to determine if legislative changes are needed to address any potential harm caused to consumers by the current broadcasting practices.
This development poses a significant challenge for the NFL, as its entire business model is deeply intertwined with the antitrust exemption granted by the Sports Broadcasting Act.
The SBA of 1961 allows professional sports leagues to pool their television rights and sell them collectively. This enables the NFL to negotiate as a single entity on behalf of all 32 of its teams, a practice that has been instrumental in its financial success.
The league’s current media-rights agreements, extending through the 2033 season, are reportedly worth more than $110 billion. These agreements break down to substantial annual figures for its major broadcast partners.
NBC (Comcast) is said to receive approximately $2 billion annually.
CBS (Paramount Global) is also reported to be in the $2 billion per year range.
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Fox (Fox Corporation) is similarly valued at around $2 billion per year.
ESPN (Disney) is estimated to command roughly $2.7 billion per year.
The potential for changes to this framework could profoundly impact the NFL. This comes as Congress, the Department of Justice, and the FCC are all investigating how professional sports leagues might be circumventing the spirit of the Sports Broadcasting Act.
These investigations are particularly focused on the trend of games being funneled to pay-per-view streaming services such as Amazon, Netflix, and Peacock.
Commissioner Goodell is expected to be prepared to deliver a five-minute opening statement and answer questions from Subcommittee members during the hearing.
The NFL has previously attempted to address these concerns by presenting its case to the FCC. The league argued that its business model benefits consumers, citing that 87% of its games are available on traditional “free” television.
However, consumer complaints have risen as more games are exclusively broadcast on streaming platforms that require paid subscriptions. This shift has led to increased costs for fans who wish to watch all NFL games.
For the upcoming season, Amazon Prime will exclusively carry the NFL’s Black Friday game along with 15 Thursday Night Football matchups. Netflix is set to broadcast two Christmas Day games, and Peacock will stream one regular-season game.
The cumulative cost of subscribing to these various services to access all games is at the core of consumer dissatisfaction.
