The Dept. of Justice is investigating the NFL’s media deals with streaming companies as more of its games go behind subscription pay walls.
The investigation first reported by the Wall Street Journal centers on the financial impact of live sports streaming on consumers and whether the league’s traditional broadcast partners are getting fair treatment.
The Justice Dept. did not respond to a request for comment. A government official told NBC News the DOJ’s investigation into the NFL is “about affordability for consumers and creating an even playing field for providers.”
Early last month, Sen. Mike Lee, R-Utah requested the investigation in a letter to the DOJ, and issued a statement Thursday on X saying he was glad to see it move forward.
The Sports Broadcasting Act passed by Congress in 1961 allowed professional football teams to collectively license the TV rights of their games to national broadcast networks without running afoul of anti-trust laws. Lee noted that courts have recognized the act refers to broadcasts “financed through advertising and made available free to the public.”
Lee said sports packages that go behind subscription paywalls “no longer align” with the intention of the act which was passed when the public only had access to three TV networks.
The NFL has not received a letter from the DOJ saying it is under investigation, according to a person familiar with the matter who was not authorized to comment. But the league issued a statement asserting that fans can see every NFL game played by the teams in their markets for free on broadcast TV unlike every other major sport.
“The NFL’s media distribution model is the most fan and broadcaster-friendly in the entire sports and entertainment industry,” the league said. “The NFL has for decades put our fans front and center in how we distribute our content.”
The NFL said 87% its games can be watched on free TV. The other 13% on streaming and cable platforms are made available on the local TV stations of the teams involved in those contests.
The sports rights landscape has shifted dramatically in the last 10 years as deep pocketed tech companies such as Amazon, Google and Netflix have provided the NFL with significant leverage in its negotiations with its longtime TV partners NBC, CBS, Fox and ESPN.
While streaming companies initially eschewed live sports because of the high cost of rights fees, they have found them to be an effective way to bring a massive number of viewers to their platforms.
Amazon Prime Video is paying $1.5 billion a year for the rights to “Thursday Night Football,” a package that was a money loser when carried by the broadcast networks. Netflix has picked up the rights to games on Christmas Day, while Google’s YouTube became the home of the Sunday Ticket package that gives subscribers access to out-of-market games.
The pressure from the newer competitors comes at a time when companies with traditional TV networks depend on the NFL more than ever as it provides the highest rated programming by a wide margin. The NFL packages also give TV station groups with leverage in negotiating carriage deal fees with cable and satellite companies.
Tensions over the rising rights fees are growing as the NFL has the right to open up the deal with Paramount, because the company underwent an ownership change last year when acquired by Skydance Media. The league is reportedly looking for another $1 billion annually from Paramount which is already paying $2.1 billion a year for its package of games on CBS.
The league has also made it clear it plans to exercise its option in 2029 to open the current 10-year media rights contract that runs through the 2032-33 season.
Fox Corporation — home of the Trump-friendly Fox News Channel — heavily depends on the NFL for programming on its TV stations — has already raised concerns about the renegotiation.
Executive Chairman Lachlan Murdoch has said he believes the $2.5 billion a year Fox pays the NFL is “fair market value.” But he has also told Wall Street analysts the company may have to re-examine its other sports deals in preparation to pay more to the NFL going forward.
Last week, Fox and station group owner Sinclair Broadcasting filed a statement with the FCC asserting that the NFL’s antitrust exemption does not apply to streaming platforms that require paid subscriptions.
“Congress provided a valuable exemption from the antitrust laws for leagues that bargain collectively for sports broadcasting,” wrote Joseph Di Scipio, Fox Corp.’s senior VP, legal and FCC compliance. “But on its face, the statute does not exempt negotiations that the leagues may have with streaming services.”