The NFL is exploring options to unload a minority stake in its media business as broadcasters face new challenges in cultivating and reaching audiences.
Minority Sale in NFL Media Business Could Lead to Innovation
The beauty is in the eye of the beholder, but with things-to-see proliferating and eyeballs now in short supply, traditional media businesses have had to reconsider the way they approach audiences. The National Football League (NFL) is the latest entity to have a think about what is next as the company is reportedly looking to unload part of its media business, including brands such as NFL.com, NFL Network, and RedZone.
Based on a report by The Wall Street Journal, the league has approached investment bank Goldman Sachs to assist with exploring several options, such as the sale of a minority stake in the business or offloading a bigger part of the portfolio. The move is a part of a broader trend for media businesses that have been struggling to retain viewership, faced with a new wave of streaming platforms and even video gaming.
Many sports media broadcasters have turned to sports betting and big data companies to retain and incentivize stronger viewership and engagement. This is move that has resulted in the creation of Fox Bet, a sports betting company that is affiliated with the namesake network. Fox, which is part of the Sinclair portfolio, is being rebranded as Bally Sports as a part of a naming rights agreement struck between Sinclair and Bally’s Corporation, a casino operator. The trend reflects on broadcasters’ dash to find new ways to engage with audiences.
Addressing the Changing Paradigms in NFL Viewership
The NFL is experiencing declining viewership across the board and is challenged by new sports streaming options readily available, which uproot the traditional cable broadcasting paradigm. Yet, the league feels confident that it can find a formula that allows it to tap into more sports fans. A league spokesperson commenting on the Wall Street Journal report argued that the NFL had a proven track record for building media platforms that “develop significant audiences, so we anticipate speaking to a number of interested parties.”
“We do not intend to provide an update on this process until it has concluded and will not speculate about potential outcomes,” the spokesperson added. While things may look entirely hot for the NFL, the league is still the world’s most successful in financial terms.
It has been able to negotiate a new 10-year collective bargaining agreement with the NFL Player Association, guaranteeing a period of stability ahead where issues such as player salaries do not crop up. The company has not actually withdrawn from the idea of running a media business entirely, it seems, as the NFL has signed an 11-year-deal to extend media rights agreement with FOX Corporation.
At the same time, the league is not looking to reduce its involvement in media companies but, rather, bring on buyers or a buyer who is interested in expanding the assets’ reach and success with audiences. The three assets offer a different type of experience. The NFL Network is focused on purely the regular NFL season, which saw a 7% decline in viewership during 2020, according to Nielsen data. RedZone is a premium channel that focuses on highlights, and then there is NFL.com, which is the league’s home.
An outside interest by tech giants such as Amazon and Facebook may give those companies a firmer foothold in sports and potentially sports betting. Amazon already owns Twitch, a video streaming platform, which it bought for close to $1 billion.