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Fox Corp. COO: We’re at “very, very early stage” of NFL rights renewal

John Nallen, Fox Corp. chief operating officer, said the company is at a “very, very early stage” of negotiating a potential rights renewal with the National Football League.

Speaking at the Credit Suisse Virtual Communications Conference, Nallen not surprisingly lauded the robust ratings strength of the NFL, which posted an overall viewership increase during the 2019 season and remains the top-rated programming, regardless of genre, across all of American television.

“Give me the NFL, the ability to have that kind of programming,” Nallen said. “That’s where the focus should be.”

Fox’s current nine-year deal with the NFL for Sunday afternoon NFL games runs through 2022, with average payments of $1.1bn per year. The network’s five-year Thursday night package is worth an additional $550m per year, and also goes through 2022.

But Nallen at the conference decried consumer and analyst focus on average annual value in the rights packages, believing that view does not provide a correct view into the network’s business, and not equate to the quarterly based focus of Wall Street.

Average annual value “is a press headline that makes it great on the sports pages. But it really has no relevance to the business,” he said. “If I took the AAV of my affiliate revenues, you’d say, ‘Wow, that’s fantastic.’ But you always measure me on how I did last quarter, never mind last year, compared to this quarter.

Though incumbent NFL rightsholders such as Fox, NBC, CBS, and ESPN are each expected to be vigorous players in the next rights cycle, given the high importance of NFL programming to their respective business, it’s long been expected the upcoming round will include additional players, including digitally focused ones.

And already, Amazon has expanded its role with the league, earlier this year picking up exclusive rights to a late-season Saturday game as part of an extension and expansion of its NFL rights.

“I think this next negotiation is going to be fun, more complex,” NFL commissioner Roger Goodell said to CNBC last year. “Probably will include additional players because our whole strategy is to have great reach and to be able to engage fans. And you have to do that on different platforms.”

The NFL also has additional strength to go to market with its media rights as labor peace is secured for the next decade. Earlier this year, the league struck a 10-year collective bargaining agreement with the NFL Players Association.