Now, on to the NFL and a giant sucking sound…

Both David Ellison and the Murdochs seem to be fighting back, or at least their favorite Trump official is fighting on behalf of their respective conservative media empires. Brendan Carr, the F.C.C. chair, said this week on Fox News—where else?— that he’s “looking into” the antitrust exemption that allows the NFL to do league-wide TV deals only if it protects customer access. If the league continues to shift games from “free” TV to paywalled streaming services, Carr might pounce, and “there could be actions at other portions of the government, and Congress as well,” he warned. It’s not hard to see who would benefit from those kinds of “actions.”

At the same time, Murdoch’s Wall Street Journal warned in an editorial yesterday that team owners “should consider the backlash building against the antitrust exemption they retain from another era.” Goodell, the missive continued, “thinks he can get more money from Big Tech’s streaming services than he can from his longtime TV partners. That would hurt the networks, especially local stations, that rely on the NFL for ad revenue.” And Fox News is giving airtime to an amusing poll showing that majorities of both sports fans (72 percent) and non-fans (60 percent) think big sporting events should be required to stay on broadcast TV. The results may be accurate—of course people prefer “free,” though they probably aren’t familiar with the retrans fees CBS and Fox receive from distributors that are then passed on to consumers—but they also reinforce Carr’s position, which is also the Murdoch and Ellison position: Watch your step, Roger.

It’s particularly ironic to see this argument coming from Rupert, normally a free-market conservative who famously overpaid for an NFL package back in the early ’90s precisely to help build an audience for his fledgling Fox TV empire, just as Prime Video and Netflix are doing in streaming today. The NFL has always leveraged competition among platforms to extract ever more numerous pounds of flesh. The difference is, in the linear TV era, that competition supported the same channel bundle that included all sorts of networks—and their robust programming—that football fans paid for but maybe never watched. (And vice versa; your aunt who thinks of Travis Kelce only as Mr. Taylor Swift continues to fund Robert Kraft’s massage therapists via her DirecTV bill.) The unique NFL content allowed those channels to keep raising carriage and retrans fees, not to mention ad rates.

But now the NFL is basically the only thing propping up these linear networks, and carriage fees are stalled or even declining, thus making football more valuable and less affordable for their owners, who, for the most part, are not growing their overall businesses to match the expected rights fees—at least not yet. Losing football entirely might irreparably harm their businesses, but participating in a bidding war with deep-pocketed streamers might also drive them off a cliff. Unless… they cut their content budgets elsewhere.

Hence what will likely be a major retrenchment from both lesser sports leagues—not great news for MLB or NASCAR or PGA golf—and, crucially, entertainment content. Balancing these budgets “can be achieved by pulling back spending on other areas of content like scripted entertainment and films,” the analysts wrote. Which likely means less money for Hollywood at a time when so many disruptions are already siphoning money away from Hollywood.

How much? We’ll see, and obviously there are risks to outlets that reduce their entertainment offerings—namely, non–sports fans could tune out or unsubscribe. But even a few billion in annual spend would be felt throughout the community. It’s enough to make people in Hollywood root for the Murdochs and Ellisons in this fight. Will political pushback from the government stop the NFL from doing what the NFL does—extracting billions more from its partners? Probably not. But the Trump administration certainly isn’t afraid to align itself with media players it deems allies.

The conservative-friendly TV station merger of Tegna and Nexstar got the greenlight from Carr despite an F.C.C. rule explicitly forbidding it. We know what happened in the run-up to the Skydance-Paramount deal. My colleague John Ourand reported last week that executives at certain networks are weighing whether to hold off on renegotiating now and pressing their luck when the opt-outs arrive in four years. That’s probably the first salvo in this negotiation war, and given the potential high-stakes fallout, all of Hollywood has a vested interest. 

See you Monday,
Matt

Got a question, comment, complaint, or a box of Peeps? Email me at Matt@puck.news or call/text me at 310-804-3198.

Need help? Review our FAQ page or contact us for assistance. For brand partnerships, email ads@puck.news.

You received this email because you signed up to receive emails from Puck, or as part of your Puck account associated with {{customer.email}}. To stop receiving this newsletter and/or manage all your email preferences, click here.

Puck is published by Heat Media LLC. 107 Greenwich St., New York, NY 10006