NFL Moves Toward Labor Deal Aimed at Luring TV Billions

(Bloomberg) -- The timing and terms of the National Football League’s proposed labor contract suggest that management’s principal goal is to entice media companies like Walt Disney Co. and Fox Corp. into paying billions more for the rights to show live games.

Owners convened in New York on Thursday and approved an outline of an offer to players that includes a 17th regular-season game and two additional playoff games, satisfying broadcasters that are salivating for even more contests from the most-watched U.S. sports league.

Lee Berke, an industry consultant, said the additional games and related content may enable the NFL to reap almost double the $6.5 billion that it currently gets in major broadcast fees.

“It allows you to meet the needs of a growing number of deep-pocketed and well-financed media companies, all of which are looking for an NFL relationship,” Berke said. “But the prelude to that is that you need to have a long-term labor contract.”

Under terms of the proposal, the players would receive, among other concessions, an increased share of revenue in exchange for agreeing to the additional games, according to people familiar with the matter. The people were granted anonymity because terms of the proposal are private and no deal has been signed.

If the players decide not to approve the negotiated terms within a week, the owners approved scrapping the proposal and moving forward under the terms of the current 2011 labor contract, set to expire after next season.

The players are scheduled to convene via conference call on Friday to discuss various proposals. The union declined to comment on the negotiations.

Contract Extension

A long-term contract extension of as much as 10 years would help the NFL in talks with broadcasters leery of a possible lockout or strike canceling games. The longest work stoppage in NFL history preceded the current agreement.

The NFL has begun preliminary talks with networks seeking to secure one of the last guaranteed ratings draws on television. The league’s existing television partners -- Disney, Fox, ViacomCBS Inc.’s CBS, Comcast Corp.’s NBC and AT&T Inc.’s DirecTV -- combined to pay the NFL more than $6.5 billion in annual rights payments.

Those deals expire in the next couple of years, setting the stage for bidding wars that may include technology companies like Apple Inc., Alphabet Inc.’s Google, DAZN and Amazon.com Inc., which currently pays $65 million a year for the streaming rights to Thursday-night games.

According to Berke, the league’s increased fees for the next rights deals with broadcasters would come in about $2 billion lower if it’s unable to secure the additional games in the next collective bargaining agreement.

The 17th game was a major focus of negotiations, with some players arguing publicly that more play would compromise their health and safety. Adding the game, however, is the union’s biggest bargaining chip.

To contact the reporters on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net;Eben Novy-Williams in New York at enovywilliam@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, ;Tom Giles at tgiles5@bloomberg.net, John J. Edwards III

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