Some NFL owners back out of selling stake in league-owned media

The NFL’s media headquarters is now housed in Inglewood at the recently opened facility which includes NFL Network, among other assets.Images: getty

SComing out of NFL owners’ meetings and on a sunny Florida afternoon last month, Brian Rolapp, the NFL’s director of media and affairs, was the picture of a relaxed executive.

As he spoke to a group of reporters, he spoke with confidence and poise about the negotiations he personally oversaw to sell a stake in the league’s owned-and-operated media properties.

Asked to reduce the chances of finalizing a deal in the coming months compared to last June, when the league brought in Goldman Sachs to assess its options, Rolapp said: “It’s more likely. … We’re starting to coalesce around a vision we love, but we still have work to do.

The struggle to coalesce around a vision is also playing out within the NFL, where several influential owners have begun to push back against the idea of ​​selling a minority stake in its media business.

The result is that no trade is imminent.

Last year, the NFL got $110 billion by licensing its live gaming rights to the networks conventionally. But these new conversations around his owned media assets — including NFL.com, NFL Network, NFL RedZone, the NFL App and more — are much more complicated. There is no doubt that these assets could generate more value than they currently do, but the path to unlocking this income is unclear and may require taking on more risk than owners wish.

Despite the internal setback, talks are continuing with interested companies and a deal could still emerge. Amazon, Apple and ESPN, among others, have had serious discussions about buying a stake in the league’s media business.

Skeptical owners worry about the permanence of selling even a tiny stake at a time when the media industry is going through huge changes. They view their complete control over valuable media assets in such an uncertain media world as a unique strategic advantage, perhaps more valuable than the likely return from a stock trade.

Specific NFL properties vary widely in their desirability and strategic fit for interested media and technology companies. NFL Network, for example, has a decreasing reach. It is currently present in around 56 million homes, according to Nielsen estimates. That’s down from its peak of 73 million households nine years ago, another reflection of the cord-cut.

The NFL RedZone channel, on the other hand, is a premium channel that could benefit much more from legalized gambling content.

Then there’s NFL Films, the production company with an extensive library of high-quality content documenting the league’s history. An ideal partner for NFL Films would certainly be of little interest to NFL.com.

Even if a singular fairness deal doesn’t materialize, NFL insiders — even deal skeptics — insist it shouldn’t be seen as a failure. Hiring Goldman was the first step in an exploration that had no goal or deadline. Discussions about what would be included — or not — remained fluid throughout the process, say both parties to the negotiations.

NFL sources believe they have generated extraordinary insights from the extensive research and conversations with potential partners.

With internal debate still ongoing, attention has in some cases turned to narrower — but still meaningful — deals that would address specific parts of the NFL’s media portfolio. This includes the idea floated by Rolapp to partner with a Hollywood or streaming company to create a content studio with NFL Films.

At meetings last month in Florida, NFL team executives and owners were briefed on NFL+, a direct-to-consumer offering being considered that would bundle rights to local mobile games and other content.

The role of “Sunday Ticket” rights in all of this remains unclear, and it could still be allowed under a traditional deal that doesn’t involve equity. Amazon and Apple, in particular, have shown great interest in the out-of-market package.

“It’s not a process where you sell a business and you set a deadline and run an option,” Rolapp said. “It’s the complete opposite of that. Rather, it’s about how we think about the next 15 to 20 years, which requires a very different kind of thinking and process.

The league’s goal is to become more direct to the consumer, Rolapp said. The NFL aspires to user data generated in a digital environment. Importantly, the league considers the distribution of NFL content on third-party services or platforms to be always direct-to-consumer, Rolapp said.

The internal debate highlights the differences between how owners and executive staff view the issue of unrealized value in media properties. In this age of easy corporate cash and investment capital, league executives see strategic deals as the best way to maximize returns.

But most owners intend to leave their teams, and their 1/32nd interest in NFL Media, to their families, and have a limited interest in diluting that in exchange for an uncertain return.

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