Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with the S&P Global Market Intelligence tech, media and telecom news team. Welcome to MediaTalk, a podcast hosted by S&P Global, where the news and research staff explore issues in the evolving media landscape. Today, I'm joined by a trio of S&P Global Market Intelligence Kagan analysts. Principal analyst Justin Nielson, who specializes in broadcast, among others; Principal Analyst Scott Robson, who tracks US TV networks and sports; and Research Analyst Michael Johnson, who is on the US Sports Watch. We're going to talk about the 2024 NFL season, which kicks off tonight with the two-time defending champion Kansas City Chiefs taking on the team they beat in the AFC Championship Game last year, the Baltimore Ravens. The game is on NBC and will also be streamed on Peacock. A lot of our conversation will center around the bifurcated landscape that is the NFL, which thrives on broadcast while increasing its streaming presence. We also hope to have a little fun with America's favorite sport along the way. Let's start with Michael. Are you a big NFL guy, and what are you looking forward to business-wise from this upcoming season?

Michael Johnson: Yeah, thanks for having me on the podcast. I'm a huge NFL fan. I've been a big Minnesota Vikings fan ever since the '98 Randy Moss days. From a business perspective, this season there will be NFL games broadcast on multiple different streaming platforms: Peacock, Prime Video, and Netflix for the first time. So, tracking how those media streaming platforms perform throughout the year will be something I pay close attention to.

Reynolds: Scott, your thoughts on the Chiefs-Ravens starting things off tonight, followed by Eagles-Packers in São Paulo, Brazil, streaming exclusively on Peacock this Friday night?

Scott Robson: Yeah, thanks, Mike. It's a little different start to the season this year. While the NFL has been kicking things off on Thursday nights, the Friday night game from Brazil, exclusively on Peacock, is definitely new. I think Peacock is looking to ride the momentum from the Olympics by getting some of the new subscribers who jumped on board for the games in July and August to stick around. I think NBC, with the opening game on Thursday night between Kansas City and Baltimore, will do great numbers. The Peacock-exclusive game on Friday will probably draw a smaller audience, but I think it will still do well as streaming audiences continue to grow.

Reynolds: Both games got a lot of promotion during the Peacock Chiefs-Dolphins playoff game last year, which did an average of 23 million concurrent streams. Given it's Friday night, I think that'd be a tough number for them to match with the Packers and the Eagles. Anyway, let's keep our streaming play going. Justin, it looks like the NFL might have taken a hit with the class action suit where a jury found the league would have to pay about $4.7 billion in damages to subscribers and restaurant bars that showed the out-of-home Sunday Ticket package over the years. Since it was an antitrust case, the damages would have tripled to $14 billion, but a judge overturned it. That’s got to be maybe the biggest win of the season for the NFL.

Justin Nielson: I believe so. That would have been a huge hit if the NFL had to pay out $14 billion, for sure.

Reynolds: Scott, back in the day, DIRECTV Entertainment Holdings LLC stated on earnings calls that the Sunday Ticket would have between 1.5 million and 2 million subscribers. This past season was the first with YouTube in that game instead, and the NFL was very happy. Any sense you have for how big YouTube did with Sunday Ticket this past season?

Robson: Yes, before going private, DIRECTV had stated on earnings calls that the Sunday Ticket would have between 1.5 million and 2 million subscribers. That number likely dwindled in the final years of the agreement. Meanwhile, the package was losing DIRECTV about a billion dollars per year towards the end of that agreement due to the hefty cost. I think YouTube was able to attract some additional subscribers towards the end of last season with creative pricing options. It has been reported that YouTube is also losing money on the deal, although I think they knew that going in. From what we've heard from Alphabet Inc. executives, they're pretty pleased with how Year 1 went, so I think they're finding additional revenue advantages from the package that DirecTV might not have been able to leverage. They were looking at somewhere around 1.3 million subscribers.

Reynolds: So that's a decent start. Michael, this is the third season that Amazon Prime Video is the primary Thursday Night Football rights holder. Last season, there was some significant viewership improvement. Does Prime Video continue to close the gap this year between what was last year when the games were on FOX (US) and NFL Network (US) and on Prime Video?

Johnson: Yeah, I think so. As more fans get comfortable with the Prime Video platform, you'll see these viewership numbers continue to improve in my opinion. This season, six teams make multiple appearances on Prime Video, three of which are big market teams: the 49ers, Jets and Rams. Plus, Thursday Night Football doesn't have the luxury of flex scheduling, but their lineup this year has many divisional marquee games to look forward to, with Joe Burrow and the Bengals going to Baltimore on November 7th. So, a lot of big games coming, and I expect the viewership numbers to follow.

Reynolds: Good deal. Justin, what do you make of the Amazon Black Friday game? Now there's going to be a pair of games on Christmas, which is a Wednesday this year, and those two games are going to be on Netflix.

Nielson: Yeah, it's really interesting. The Amazon Black Friday game makes a ton of sense for them. It's a big shopping day, and having their branding and advertising around that Black Friday game will add value in terms of both the viewing and shopping experience. Also, on Netflix, the two Christmas games will definitely be something to watch while you're opening those presents. So Netflix will be front and center in terms of branding on Christmas Day.

Reynolds: Yeah, that's their first entry into NFL games. We're going to be watching that closely. Scott, going back now to the NBA, according to reports, Warner Bros. Discovery Inc. during its and Disney's exclusive negotiating window with the NBA in April, reportedly advised that the league might be able to bolster its streaming position with Amazon Prime Video. That hasn't worked out so well for Warner Bros. Discovery and TNT (US), given the legal situation they find themselves in now. CBS Sports President Dave Burson at the company's NFL media day said Netflix's Christmas Day entry is good for the league and CBS, which is getting production-free coverage on its local stations for the two games, including local ad inventory, and will receive on-air promotion from Netflix. Despite those benefits for CBS, could this be another case of inviting a fox? And I don't mean the network here, but inviting a fox into the henhouse?

Robson: Yes, looking at this situation, I think the national broadcast networks are in a different and much better position than the basic cable networks right now. So I'd be less worried about the NFL cutting CBS or FOX or NBC out of the picture in favor of Netflix in the near term than I would be about the NBA cutting out TNT in favor of Amazon. That being said, I think this is a bit of an experiment by the NFL and Netflix, and I expect it to go well for both parties. The streaming services are good partners for the NFL and will likely only grow the amount of exclusive NFL games they carry over time. For the time being, though, I think broadcast is still the best platform for the NFL in terms of reach.

Reynolds: All right, Michael, talk about the differences in the streaming game plans for NBCU's Peacock and Paramount+ with CBS Sports.

Johnson: Yes, so Paramount+ will continue to provide live streaming of in-network NFL on CBS games throughout the year. Peacock will again stream all NBC "Sunday Night Football" games, including the playoffs, with the return of their "Football Night in America" studio show, as well as post-game coverage. Additionally, Peacock will also hold an exclusive national game between the Packers and the Eagles from Brazil on the NFL's opening weekend — the league's first opening weekend Friday night game since 1970. So it'll be interesting to track the performance of each streaming platform throughout the year.

Reynolds: Yes, the Peacock games are national, and the games on Paramount+ are in that regional mode, if I'm not mistaken.

Johnson: Correct. Yes.

Reynolds: All right, Justin, we're going to talk about Venu again. The streaming JV of Disney, Fox Corp., and Warner Bros. Discovery got tackled by a preliminary injunction. The partners are filing an appeal. Even if the service — a streaming video sports-oriented service — does launch, is Venu all that? Is it really that big for pro football?

Nielson: Not specifically pro football. It does offer a comprehensive sports package when it comes to college football, but not so much for the NFL. You don't have any of the NBCUniversal Media LLC or Paramount Global streaming alternatives, as well as Amazon Prime Video for Thursday Night Football. So, you would basically have to package Venu with other streaming platforms or buy a cable package to get all the NFL games.

Reynolds: Yes, so two checks have to be written there. Or Venmo's, or however you pay these days. Anyway, how important is the NFL for FOX and other broadcast station owners in terms of retransmission consent and local ad sales?

Nielson: The NFL has always been the broadcasters' most important content set in terms of their ability to sell local advertising, as well as getting the Super Bowl every four years. From that perspective, the broadcasters feel like the NFL is their premier content and something they've paid up for in every renewal period. From the NFL's perspective, it's been a good partnership because the broadcasters can always deliver the reach of the entire US.

Reynolds: Sure. And they also have wraparound shows and the like to further amplify the association with the local club.

Nielson: Exactly. In all these local markets, they have sports reporters, so yes, it's been a great partnership that has gone back decades for the NFL and broadcasters.

Reynolds: All right, let's talk a little bit more about linear viewership. While attention is focused on the presidential cycle every four years, which takes a bite out of NFL ratings to some extent, the league is still going to set the viewership pace. Scott, the NFL routinely accounts for what, all or almost all the top shows on TV?

Robson: Yes, the NFL is king when it comes to viewership. I was looking at a report earlier today that showed the NFL accounted for 93 of the top 100 TV broadcasts of 2023. So, it's really just in a league of its own there.

Reynolds: I gotcha. And obviously, the NFL season culminates, as Justin just mentioned, with the Super Bowl. Last year, CBS, Paramount+, and Univision (US) combined for nearly 124 million viewers — it's a record audience. Michael, your thoughts on the scope of the game and reports indicating that FOX, which holds the rights this year, has only a handful of in-game spots left in the title game? I think they're going for more than $7 million per 30-second spot.

Johnson: Yes, the Super Bowl obviously has a massive audience and still offers a pretty good value for advertisers, given that massive audience, which is why you're seeing a limited number of in-game spots left this far out from the broadcast. It will be hard to continue to grow the audience given the number of people who already watch, so that will be something to keep in mind in future years.

Reynolds: Yes, again, at some point you have to wonder where does it top off? And we're not going to talk about this now, guys, but at some point, they want to go to an 18-game schedule — maybe that pushes the Super Bowl to the Sunday right before the President's Day holiday. Anyway, that's a story for another day. Scott, any reason to think that NBC "Sunday Night Football" won't extend its run atop primetime to a 14th straight year? It's a record that it holds onto itself. It's also first in a host of demos. Why does "Sunday Night Football" work so well?

Robson: Yes, I think it works well because people in the United States just love the NFL. It's got a major fan base, and primetime Sunday is one of the most coveted time slots for TV viewing. People are home; they aren't out partying like on Friday and Saturday nights, so "Sunday Night Football" is the entertainment choice for many. I'd be very surprised if it doesn't get the top spot again this year.

Reynolds: Yes, again, I guess it just speaks to the appetite for the games. Anyway, Justin, let's go to the late afternoon window, the 4:25 p.m. ET slot. FOX's America's Game of the Week has been the most-watched window in linear TV for many years. CBS, which had its best year with the NFL last year since it got back into the game in 1998, finally beat FOX in that late window war. Any sense for how that battle is going to shape up this year?

Nielson: Yes, it's going to be really interesting with that scheduling shift with Fox and CBS. There are some big games coming up in Week 1 and Week 2. You've got the Bengals and the Chiefs in Week 2 and then the afternoon slot on CBS with the Steelers and the Broncos. So, it's going to shift some of the viewership, but I think overall, just the NFL in general has increased viewership year over year.

Reynolds: Yes, they have. Again, last year, I think they were up 7%. So anyway, we've talked about ESPN (US) in the context of Venu, the streaming joint venture, and next year the flagship ESPN streaming service is scheduled to launch. ESPN+ is not really that big an NFL player as Disney has sought to maintain the value of affiliate fees, which are the highest at basic cable by far. Michael, is there going to be a little more ESPN action with the NFL this year?

Johnson: Yes, to go along with the current ESPN+ capabilities, I believe in Week 7, ESPN+ will be the home to an exclusive Monday Night Football game between the Chargers and the Arizona Cardinals. So, it'll be interesting to track how that broadcast performs when compared to the traditional Monday Night Football broadcast.

Reynolds: Yes, that'll be an interesting one. Scott, last year for Monday Night Football was its best year for ESPN since it secured the rights from ABC (US) in 2006. But it benefited largely because I think every "Monday Night Football" window had ABC in it because of the writers' and actors' strike. We're probably going to see a little bit of a downturn on "Monday Night Football" this year.

Robson: Yes, last season there were more "Monday Night Football" games broadcast across ABC and ESPN. As you mentioned, the Hollywood strikes allowed for the addition of ABC, which really boosted overall audiences and highlights the expanded reach of broadcast over cable. Given that, I don't think ESPN will be able to match those audience numbers this year. They have game simulcasts across ESPN and ESPN2 (US) with the Manningcast, but that doesn't really add as much as an ABC simulcast.

Reynolds: No, not anywhere close. The NFL's current rate deals go through 2033, but the league has an out clause in 2029. Do you think at that point we’re going to look at more streaming? Is that what you guys expect, Justin?

Nielson: I would think so. The out clause—who knows what the pay TV environment is going to be in 2029? We could have some new players or more consolidation in the industry, so it is tough to see where that rights deal may make more sense to be renegotiated at that time. But I think they've got a pretty good deal in place right now, and it's definitely serving both partners.

Reynolds: Michael, what do you think?

Johnson: Yes, with the continued growth of the NFL and possibly the implementation of an expanded 18-game regular season schedule, they could definitely be in a position to negotiate larger payments from networks and potentially even introduce new partners such as Apple TV or something like that in 2029.

Reynolds: Scott, what are you thinking here?

Robson: Yes, I agree with Justin and Michael. I expect more games to be added to streaming services, resulting in higher rights fees, possibly from an additional regular season week or maybe some more international games — lots of things in the mix there.

Reynolds: Okay, let's turn our attention to S&P Global Market Intelligence Kagan Consumer Insights, which recently conducted an online survey about sports viewing behaviors. A few things here, Justin, the NFL topped viewing interest by a good margin. Are you surprised by how some of the other sports shook out?

Nielson: I was a little surprised with Major League Baseball just because we've heard a lot of talk about how viewership for Major League Baseball has been down. With all the disruptions that have happened with Diamond Sports Group LLC and regional sports networks, I was surprised by that. But the Summer Olympics — being in the mix, especially this year in Paris — was not a surprise. But yes, I was a little surprised by the baseball number.

Reynolds: All right, Scott, the survey found that the top three teams respondents are interested in are the Dallas Cowboys, the Kansas City Chiefs, and the San Francisco 49ers. Your thoughts? What about the Steelers, the Packers, the Giants? What do you think here?

Robson: Yes, I was a little surprised that the Patriots weren't in the top three, given their large social media following and the fact that the team has been so dominant over the past two decades. Same with the Steelers, as you mentioned, who have had a large fan base for decades as a result of their six Super Bowls. So those were the two I was expecting to see in there.

Reynolds: Okay. Michael, according to the survey, the NFL ranked third in terms of women's viewers.

Johnson: Yes, women's interest in the NFL has been on the uptick for some years now and has seen notable growth recently with newsworthy events and pop culture, such as the Taylor Swift and Travis Kelce relationship. The NFL will continue to capitalize on this momentum and create conversations that women would want to engage with around the game.

Reynolds: Speaking of capitalism, Michael, NFL valuations are shooting up substantially.

Johnson: Yes, valuations continue to increase for all NFL teams. I believe the Dallas Cowboys are valued at over $10 billion now, and you'll see these valuations continue to grow as the NFL aims for that $25 billion in revenue by 2027 target. Additionally, you'll see different private equity firms get involved to drive up these valuations as well.

Reynolds: Yes, Justin, there was a meeting where private equity guys were trying to court the NFL.

Nielson: Yes, all the names you would expect were there in New York talking with the NFL. It's interesting because they're looking to put a cap on private equity investments; there are always loopholes around that. The fact is that these NFL valuations have gotten to a point now where unless you're a multi-billionaire, you really can't afford to buy a team outright. You also look at these family partnerships that may want to exit the situation, like Mark Cuban did with the Dallas Mavericks. So private equity is an opportunity to do that.

Reynolds: Yes, there may not have been so much interest in NFL.com and NFL Network. The league tried to find a buyer during its last round of rights negotiations. Disney and ESPN say they're still looking for partners. Does Disney ultimately team with the NFL and take operational control of the website and network? Do you think that's a possibility, Scott?

Robson: I think the ESPN and NFL partnership would be a good one and possibly beneficial to both parties. The NFL would get an equity stake in ESPN, and in turn, ESPN would take control of NFL media, which includes the website, network, and library. There's not a ton of interest from other parties for the NFL Network, as there just isn't a lot of interest in buying basic cable networks right now. ESPN is looking for a partner before the launch of the direct-to-consumer service next year. Yes, the NFL could be a good partner.

Reynolds: All right, guys, we're getting to the end here. Time to go inside our personal huddles. Tom Brady is in the booth for FOX, his lead analyst alongside Kevin Burkhardt. Will Tom be terrific, or are you voting, as some of us call him, loathsome Tom off the island? Justin, what do you think?

Nielson: He was definitely a presence at the Paris Olympics, and I think he's got a good enough personality to add additional color to the FOX team. I think he'll do well.

Reynolds: Scott, Brady caused your Jets a lot of pain over the years.

Robson: Yes, I wasn't the biggest fan of Tom Brady as a player since he beat the Jets regularly, but I think he will be pretty good in the booth. His presence on the call adds a little extra element of excitement, and people will tune in to see how he does. It should be interesting.

Reynolds: I'm a Giants guy, so I'll just say Eli. Here we go. Would you rather go to a Chiefs game or a Taylor Swift concert at Arrowhead Stadium? Michael?

Johnson: I guess that depends on who I'm bringing with me. But if it's just me going by myself, I'm going to lean toward the Chiefs game for sure.

Robson: If the Chiefs were playing the Jets, I'd go to that. Otherwise, I'm seeing Taylor Swift. I think the ticket is more expensive.

Reynolds: Justin, what if you could take your daughters?

Nielson: Oh, absolutely. They're huge Swiftie fans. It's funny, during the Super Bowl, all they were asking for was where Taylor Swift was at all times.

Reynolds: I'm not a Swiftie by any means, but if the Kelcebrothers, Coach Andy Reid, and the Olympic star known as Snoop Dogg were on backup vocals and dancing behind Taylor, I'm going to the concert. So guys, the Chiefs: threepeat or who knocks them off? Justin, what are you thinking?

Nielson: Wow, I don't know. It could be the Chiefs' year again, but I think the 49ers are going to be tough.

Robson: I'm going to have to say this is the Jets' year — Jets Super Bowl.

Reynolds: Okay. All right. I'm going to go silver and Honolulu blue — the Detroit Lions — on their way to their first NFL championship since 1957. Anyway, last pick to you, Michael: Chiefs repeat or someone else?

Johnson: I'm going to think outside the box here. I'm going to go Bengals. I think Joe Burrow has a stellar season, and they knock off the Packers in the Super Bowl.

Reynolds: All right, fearless selections. That concludes this episode of MediaTalk. I want to thank Justin Nielson, Scott Robson, and Michael Johnson for sharing their insights on the business of the NFL season. Thanks, guys.

Nielson, Robson and Johnson: Thanks, Mike.

Reynolds: This is Mike Reynolds. Thanks to all of you for listening. We'll catch up soon on the next edition of MediaTalk.