The economic impact of the coronavirus on the NFL as a business is as yet untold. The manner in which the 2020 season unfolds, and, frankly, whether or not the virus continues to linger deep into next year, will dictate the waters through which the league, and all other major sports leagues, will have to navigate, and only then can the finally tally on damages be taken.
Last month, it was reported that the league and the players union agreed to an arrangement that set the salary cap floor for the 2021 season at $175 million, with the potential for it to rise higher in the event that the economic damage suffered is less severe than had been predicted. As a reminder, the 2020 salary cap is nearly $200 million.
A key hidden piece of the NFL’s economic recovery is the looming future business arrangements with networks to broadcast their games, as every time they are able to negotiate new broadcasting rights deals with their partners—sometimes changing partners for more lucrative opportunities—it results in a boost to the bottom line, and for the salary cap.
According to the Sports Business Journal, via Mike Florio of Pro Football Talk, the NFL has actually been quietly negotiating with its broadcasting partners since June, pertaining to new business deals, and reports that the deals are “likely to remain the status quo”.
It’s not fully clear what that means, but seems to indicate a belief that the league’s partners will remain the same, not necessarily that the value of those deals would remain the same. It would be a setback if they did not receive an increase in value for broadcasting rights in an era of television in which viewership is declining across the board as more and more people are turning to streaming services for their entertainment and news.
Another element of the report states that the new deals could be in place, at least on paper, in time for Labor Day, which is September 7, roughly in the ballpark of when the 2020 regular season is set to begin, though the contracts likely would not be signed much sooner than before the end of the year.
Every NFL fan should be invested in seeing the league maximize its broadcasting revenue, because that directly translates into an increase in the allotted salary cap that each team is permitted to spend. Some teams, like the Pittsburgh Steelers, chronically spend more than others, and so would be most impacted by a rise in revenue due to new television contracts—especially in light of the economic blow of the coronavirus that they may help to offset.