By Buddhika Rajapakse and Jacques Bassili
The NFL is as synonymous with America as apple pie, democracy, freedom of speech, and free enterprise. But as the comedian Bill Maher famously pointed out, a lot about the league appears inherently socialist and at times dictatorial… at least at first glance. In a series of articles, Jacques Bassili and Buddhika Rajapakse decided to take a closer look at the apparent contradictions in how this most American of sports is run and what other sports can learn from it.
Before we get started, let's define what we mean by socialism. Stanford University’s “Encyclopedia of Philosophy” defines socialism using the five principles below. (Please note: the aim of our articles is to discuss the business of sports, so forgive us if these principles do not align perfectly with other reputable political and economic references.)
Equality: Everyone has “broadly equal access to the necessary material and social means” to flourish.
Democracy: Everyone has “broadly equal access to the … means to participate meaningfully in decisions” that affect them. (We must acknowledge of course that there have been many socialist and communist dictatorships throughout history that have hardly paid attention to this principle, to the point where many people associate socialism and communism with dictatorships.)
Individual freedom: “Real freedom” of being able to develop one’s own projects and bring them to fruition. (But not to the extent that it violates the other principles, such as “equality” or “community,” presumably…)
Self-realisation: Ability to engage in “autonomously chosen activities featuring people’s development and exercise of their creative and productive capacities in cooperation with others.”
Community or solidarity: “People … organise their economic life so that they treat the freedom and well-being of others as intrinsically significant. People should recognise positive duties to support other people.”
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Topic 1: The NFL's approach to rights distribution
Unless you have been living under a rock, it should be self-evident that the NFL’s media distribution agreements are highly sought after. The Super Bowl is routinely America’s most watched television broadcast, with 30-second advertising slots fetching as much as US$7m.
However, if you live outside the United States, it may surprise you to learn that the vast majority of NFL games are broadcast live on free-to-air broadcast television. There are some exceptions: “Monday Night Football” airs on cable sports channel ESPN and “Thursday Night Football” is now on Amazon’s Prime Video streaming service. (However, each week MNF and TNF games are carried live on broadcast TV in the cities of the participating teams so that their local fan bases don’t miss out.) There are also technically TV “blackout” rules applicable to markets where the home team’s stadium doesn’t sell out, but it appears that these rules haven’t been rigorously enforced for some years.
What may surprise you further is that the broadcasting rights are far from exclusive. The NFL partners with the four big free-to-air TV networks to distribute its content in the USA: ABC, Fox, CBS, and NBC (although, ABC’s rights overlap with its sister cable network ESPN).
NFL TV broadcast rights deals
Not only is the NFL staunchly proud of its free-to-air accessibility, it “shares the love” across all four major US networks. “The NFL continues to be the only [US] sports league that delivers all of its games – regular-season and playoffs – on free, over-the-air television [in the USA.]” The league goes on to say, “Along with our recently completed labor agreement with the NFLPA, these distribution agreements bring an unprecedented era of stability to the League and will permit us to continue to grow and improve our game.”
Broadcaster | Value (USD bn. p.a.) |
ABC / ESPN / Disney | $2.7 |
Fox | $2.2 |
CBS / Paramount | $2.1 |
NBC / Comcast | $2.0 |
YouTube / Google | $2.0 |
NFL Network | $1.3 |
Amazon | $1.0 |
Going back to our socialist principles above, we see an apparently strong commitment here to equality. In other words, open access for all fans to enjoy the sport and broadly equivalent broadcast rights amongst major networks.
So why does the NFL pursue this diversified, largely free-to-air media distribution strategy when most major sporting codes globally have partnered heavily with pay TV or streaming services? Here are some ideas that suggest this strategy not only promotes “equality” amongst viewers and broadcasters, but also makes good long-term financial sense for the league.
Free-to-air vs. pay TV
There is no right or wrong answer regarding to whom a sports rights holder should sell its inventory. Context matters. The two main options are pay TV and free-to-air TV, each with their own advantages and disadvantages.
Pay TV sports broadcasts generally have significantly lower viewing audiences than free-to-air. Some examples include:
European Cup rugby in Ireland moved from public RTE to pay TV Sky Sports in 2007. Irish club Leinster’s quarter final match was watched by 255,000 people in 2006 and 47,000 in 2007.
In the early 2000s, the English Cricket Board sold its test cricket broadcast rights as a joint package to free-to-air Channel 4 and pay TV Sky Sports. Channel 4 had the right to screen all but one home test match each year. In the 2004 England vs. New Zealand test series, Channel 4 had a viewing audience of nearly 4.5 million for the first match. The second match - exclusive to Sky Sports - had a viewership of just under 900,000.
Golf’s the Open Championship saw viewing numbers drop by circa 75% in 2016 when Sky Sports won the live broadcast rights away from the BBC.
Furthermore, in our current era of (pay) TV “cord cutting,” we see that US basketball, ice hockey, and baseball teams are leaving cable TV regional sports networks (and their dwindling audiences) and returning to regional free-to-air TV channels.
Smaller viewership brings additional financial downsides. Pay TV rights deals are generally more lucrative for sporting bodies than free-to-air TV rights deals. However, they make the league less attractive to sponsors because of the league’s reduced audience reach. The same logic applies for TV advertisers: most brands prefer a broader reach than not. In the USA, the large free-to-air networks have enviable economies of scale that simply do not exist in smaller countries and economies (e.g., in Europe, free-to-air broadcasters are fragmented along linguistic and / or national lines), along with a broad viewership base that appeals to advertisers. This translates to an ability to bid strongly for NFL broadcast rights, with a further advantage being the NFL’s clear strategic commitment to growing and maintaining the game’s all-encompassing presence in its home market through free-to-air broadcasting (see “Distributing via multiple broadcasters” below).
Free-to-air broadcasters can manage only limited sporting inventory. Free-to-air broadcasters typically balance a variety of content (e.g., news, entertainment, sports) and adjustments to their programming schedules to accommodate sports events or seasons risk alienating a large part of their regular viewerships. Sports events that take place during primetime (8-11 pm weekdays) present scheduling challenges for free-to-air networks that don’t want to disturb their regular programming. Most NFL games avoid primetime; taking place on Sunday afternoons. Primetime games are broadcast on either pay TV (Thursday Night Football on Amazon Prime, Monday Night Football on ESPN) or are so popular as to be worthwhile for free-to-air TV (Sunday Night Football on NBC).
Distributing via multiple broadcasters
By distributing its inventory relatively evenly across many networks, the NFL is somewhat unusual in the sports world. On the surface, this may seem counterproductive, as a single exclusive distribution contract is typically more valuable than many non-exclusive distribution contracts. We have identified four factors that might be driving the NFL’s distribution approach.
The NFL may want to maintain a strong broadcasting ecosystem for its content. In this way, the NFL avoids picking a single broadcast “winner” every few years when rights are renegotiated, while leaving unsuccessful bidders to “wither on the vine.” Unlucky networks might not be able to justify maintaining investment in production crews and equipment, presenters, analysts, commentators, etc. between contracting cycles. This would leave the NFL with fewer bidders at renegotiation time and facing the risk of more concentrated buying power from the remaining network(s).
Having multiple broadcast partners allows diversity in presentation styles, commentary and analysis. Many fans of the NFL enjoy the differences in commentary and production values between networks; for example, Joe Buck and Troy Aikman on “MNF” bring a different flavour to game coverage compared to Jim Nantz, Tony Romo and the CBS NFL team. At the other end of the spectrum, cricket fans from the 1980s and 1990s had a decidedly “love or hate” relationship with Australia’s Channel 9 broadcast team, which covered practically every single international cricket match that was played during that era.
The NFL can reach a broader cross-section of viewers by working with multiple broadcasters and streaming platforms, each of which would cater to different demographics. (Whilst we haven’t done extensive research into this, it would be reasonable to assume that each free-to-air network has a somewhat different demographic. When it comes to streaming vs. network TV, the demographic differences are likely to be even more stark.)
Multiple broadcasters sharing the load is only possible with largely free-to-air distribution. Viewers are unlikely to be thrilled about needing multiple subscriptions to watch one league. Likewise, pay TV providers or paid streaming platforms are less likely to want to bid for a share of the rights when exclusivity (or near exclusivity) over the entire league would be a major driver of subscriptions. For example, Fox League in Australia brings every match from the NRL live to its subscribers and uses this as a major selling point; whereas free-to-air rival Channel 9 only covers a couple of games each week.
What can other leagues learn from the NFL?
Other leagues can learn two key lessons from the NFL. The first is that dividing rights across multiple broadcasters is an effective way to drive competition and secure the best price for those rights, assuming the market has multiple broadcasters. The second is that free-to-air brings greater audience reach than pay TV.
Maintaining multiple broadcast partners allows rights holders to ensure credible competition among broadcasters, which generates bidding competition. However, many sports leagues operate in much smaller broadcast markets that often lack multiple broadcasters operating at scale. They cannot adopt the NFL’s approach in its totality. When putting its 2025/26 to 2028/29 rights up for auction, the EPL divided them into five buckets and mandated that one broadcaster could not win all five. The result was that Sky won four of the five and TNT Sports won the other. Although not as well-balanced as the NFL’s rights distribution, this should at least ensure that TNT Sports is a credible threat to Sky’s dominance of EPL rights when the next negotiation happens. Meanwhile, in the very small New Zealand market, New Zealand Rugby really has only Sky TV NZ as a commercially viable broadcast partner.
Free-to-air brings greater audience reach than pay TV. This leads to better fan acquisition and engagement, thus increasing sponsorship value and long-term sustainability. The obvious trade-off is that free-to-air contracts may not be as lucrative as pay-TV contracts in the short-term.
Conclusion
“Equality” for the NFL’s viewers and broadcasters may be a happy coincidence stemming from a strategy that prioritises the long-term viability of the league. Beaming the league into practically every household in the country largely for free helps maintain the NFL’s broad appeal and status as “America’s Game,” as well as a wide reach for TV advertisers and sponsors. A strong stable of broadcasting partners supports the desire to broaden the viewership base and reduces the risk to the NFL of being overly reliant on one or two broadcast partners. But, the NFL is fortunate that its home market has multiple broadcasters with sufficient scale to make shared, free-to-air rights distribution financially viable. Few other leagues enjoy this luxury.