Monday, February 12, 2024

Football's Streaming Future

Streaming was a hot topic during Super Bowl Week.  Thursday Night Football has aired on Amazon Prime for the last two seasons, and Peacock had an exclusive broadcast of the Chiefs-Dolphins wild card game that drew heavy criticism, but also set records for subscriptions and viewership.  That inevitably led to questions about the NFL's future plans regarding streaming, specifically whether there will be a streaming-only Super Bowl eventually.  Roger Goodell couldn't guarantee that it'll never happen, but he did say that if it does, it won't be anytime soon.

That answer, frankly, was expected.  The NFL just wrapped up the first season of its new 11-year broadcast contract that sees the Super Bowl split between all four of its primary broadcast partners (minus Amazon).  So, even if they wanted to, they wouldn't be able to make any changes until the next TV deal...which won't be for a while! 

There was such a backlash to the Peacock wild card game that people actually wondered if the NFL would go the other way and reconsider having a streaming-exclusive playoff game.  They didn't.  They even announced that the wild card game that was on Peacock this season will shift to Amazon Prime next season, a move that at least makes sense since Amazon already has Thursday Night Football.  Well, as it turns out, there's actually a clause in their Thursday Night Football contract that gives them the option.  They declined the option in 2023-24 but will pick it up next year.

When the NFL expanded the playoff field to 14 teams and added the two extra wild card games, they worked it out so that each of the four primary networks would get a game in their normal spot, the Saturday afternoon game would rotate between CBS, FOX and NBC, and the sixth game would go out to bid.  Amazon has the right of first refusal for that sixth game.  They can even come in with a lower bid if they want.  They didn't this season, so it went to Peacock.  Next season, it'll be on Amazon.

Back to the Super Bowl, though.  It's not like the game isn't available on streaming, so the cord-cutters aren't missing out on anything.  In fact, every NFL game is available on streaming, whether they're also on linear TV or not.  Paramount+ actually crashed because of the number of people trying to sign up just so they can watch the game on the service.  NBC's games are also streamed on Peacock.  Monday Night Football is on ESPN+.  FOX uses its app.  There's also NFL+ and YouTube TV (which has NFL Sunday Ticket), so they aren't exactly missing out.  Quite the contrary.  Games are actually more available when they're on both linear TV and streaming.

It simply doesn't make business sense right now to pull the Super Bowl off linear TV entirely.  Will it in the future?  Perhaps.  Streaming isn't going away.  We all understand that.  But linear TV isn't going away, either.  So why not continue utilizing both distribution methods to bring in as many viewers as possible?

Business reasons aside, I think there's a completely separate reason why the NFL is hesitant to go entirely all-in on streaming.  They have an antitrust exemption.  That antitrust exemption would very likely face legal challenges if the Super Bowl were ever moved behind a streaming paywall.  The NFL obviously doesn't want that.

The NFL's antitrust exemption dates back to the Sports Broadcasting Act of 1961, a landmark piece of legislation that overturned a lower court ruling that had determined the NFL's TV contract with CBS violated antitrust laws and was illegal.  The Sports Broadcasting Act of 1961 found that the various franchises in professional sports leagues, while technically "competitors," are also business partners in a broader sense, and the league is authorized to act as a representative of those business partners and negotiate on their behalf.  Therefore, it's permissible to negotiate a television "package" in which all league members share equally.

This has been a common practice ever since.  Not just with the professional leagues, either.  Every major college conference has its TV deal, as well (and we all know how lucrative those contracts are for the member schools).  But it's most relevant in the NFL since every game is nationally televised (with only preseason games negotiated and broadcast locally by the teams).  And because of how it impacts the NFL schedule.

Certain restrictions still apply regarding when the NFL can and can't broadcast games.  Specifically, from the second week of September until the second week of December, they can't broadcast any game on a Friday night or Saturday if there's any high school or college football game being played within 75 miles of the game site.  This effectively prohibits the NFL from holding any games on Friday night or Saturday until mid-December.

Sometimes there's a loophole they can exploit, though.  There are five Fridays in September this year.  The restriction doesn't kick in until the second week.  So, they were allowed to schedule a Friday night game in Week 1.  Which they did.  The Eagles will be the home team for the Brazil game, and it'll be on that Friday night, the day after the season opens in Kansas City.  (The Black Friday game doesn't violate the exemption because it's an afternoon game and the restriction doesn't start until 6 p.m.)

They're very cognizant of those limitations and don't want to do anything that jeopardizes their antitrust status.  That's why we don't see Saturday NFL games until mid-December.  And I think that's why it'll be a while until we see a Super Bowl that isn't broadcast on over-the-air TV (ESPN's Super Bowls will also be on ABC).  Sure, it may be allowed under the Sports Broadcasting Act of 1961.  But there's also a chance it may not be.  Why take the risk and invite the inevitable lawsuits just to find out?

No one is denying that streaming is the future.  Not just for sports broadcasting, but for broadcasting in general.  The future isn't here yet, though.  And, even when it is, I don't think the NFL will ever completely abandon the traditional TV model.  Especially since, as I said, they can continue to do what they're already doing and broadcast the games both on linear TV and streaming.  That really does seem to be the model that makes the most sense.

Which isn't to say the NFL won't continue having games that are streaming-only.  There's already Thursday Night Football, it looks like the streaming-exclusive wild card game isn't going anywhere, and the Jaguars' London game this season was exclusively on ESPN+.  But a Super Bowl that's only available behind a streaming paywall?  We aren't there yet.  And we may never be.

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