Courtesy Sports Business Daily

(January 6, 2010) ESPN and the NFL have agreed to broad terms on a new media rights deal that will be worth nearly $2 billion per year. Specific numbers still are difficult to confirm, but multiple sources say ESPN has told the NFL that it will increase its annual rights fee by 40%, which means it will pay the league a record fee, between $1.8 billion and $1.9 billion a year.

Despite agreeing to pay the league nearly $2 billion per year to extend its rights to NFL content, including “Monday Night Football,” neither ESPN nor ABC will be in the rotation to carry the Super Bowl, according to several sources. In fact, it appears that ESPN still will not have the rights to televise any NFL playoff games, at least not initially. The league has long been unwilling to move playoff games off of broadcast television. But during the negotiations, ESPN has been pushing hard to pick up at least one wild card game, and the NFL has showed signs that it is willing to consider moving a playoff game to cable eventually.

The contract extension still has not been finalized and could be several weeks away from completion. But many of the bigger deal terms – including money and length – essentially have been worked out, sources said. ESPN will wrap up “Monday Night Football” rights well into the next decade. The deal length is for nine or 10 years, which would take it up to 2022-23.

As is part of all ESPN negotiations these days, the network is pushing forward on a “TV Everywhere” concept that includes broadband and mobile rights. The two sides still haven’t reached an agreement on mobile rights, however. Last year, Verizon signed a four-year, $720 million sponsorship deal that includes the exclusive mobile rights to stream “Sunday Night Football” and NFL Network games, as well as the NFL RedZone channel. The NFL sees significant value in these types of rights and is guarding them jealously.

The two sides have agreed that ESPN will hold onto key rights, including highlights and the Draft, which has grown in stature since ESPN first started covering it in 1980. The NFL had toyed with the idea of making the first few rounds of the NFL Draft exclusive to NFL Network, but ESPN will continue to carry it through the new deal. The potential deal comes as the NFL enters its CBA negotiations and sets up consistent and profitable revenue streams for the league. It comes after the league last year extended current partners NBC, CBS and Fox through 2013.

The NFL and ESPN started talking about extending the deal around Labor Day, when an exclusive negotiating window opened in ESPN’s current 8-year, $8.8 billion deal. The window originally expired around Thanksgiving, but talks progressed far enough that the two sides agreed on an extension.

Talks have reached the highest levels of both companies, with ESPN President George Bodenheimer visiting NFL Commissioner Roger Goodell at the league’s Manhattan offices several times this fall. Teams led by ESPN’s Exec/VP, Content John Skipper and the NFL’s Exec VP Steve Bornstein have handled most of the negotiations.

Even before this negotiation, ESPN was paying the league much more than any of the NFL’s other TV partners. ESPN’s annual payout of $1.1 billion dwarfs the annual rights fees paid by Fox ($720 million), CBS ($620 million) and NBC ($603 million). DirecTV pays about $1 billion a year for exclusive access to Sunday Ticket.

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