CBS and Fox Are Ripe For Purchase By Amazon or Apple As Part of NFL Deals

As NFL TV negotiations prepare to commence there is the sense that the existing TV network parternships status quo may prevail. That is Fox, CBS, NBC, and ESPN/ABC all may retain — or expand — upon their TV partnerships with the league. That means no one will be left standing when the NFL rights deal musical chairs end.

It’s no surprise NFL owners, smartly, want to get their CBA worked out and hammer out TV deals this spring and summer. Why? The economy is strong, there’s no uncertainty about the next president for the rest of this year at least, and all of the TV networks are bellying up to the table to increase rights fees by somewhere between 50 and 100% over what the NFL receives now. (The NFL would be likely to receive a 100% increase if they expand the season to 17 games and add two playoff teams, potentially less if that doesn’t happen).

Indeed, if I were betting right now on what the NFL outcome ends up resembling I’d bet on Monday Night Football moving to a simulcast with ABC and ESPN. As part of that new deal I’d also bet that ABC gets into the Super Bowl rotation and becomes a host every four years. I think Sunday Night Football stays the same on NBC and new packages are created that end Fox’s ownership of the NFC and CBS’s ownership of the AFC to create more of a draft system where each network picks games each week like exists in most of college now. I think NFL Sunday Ticket goes to either ESPN+ or Amazon although I also think there’s a decent possibility the NFL opens up the Sunday Ticket to all streaming companies and lets them all sell the package so the widest possible audience is permitted to buy it.

But I think the idea that tech companies are going to sweep in and buy up NFL rights is, for the most part, not going to happen.


Because the NFL remains focused on reach.

That is, the NFL wants to ensure that the largest possible audience is exposed to their games. Where is the largest possible audience — particularly in this cable and satellite cord cutting era? — broadcast networks. In an era when virtually every other television audience is stagnant or falling, the NFL has had rising ratings the past two years on broadcast television.

So while the continued flirtation with the big tech companies — the Amazon’s, Apple’s, Facebook’s and Google’s of the world — are likely to continue, unless one of these companies sweeps in and takes away the NFL Sunday Ticket exclusivity from DirecTV, it’s unlikely the NFL is suddenly going to want to put its games on streaming services.

So let’s consider the four media companies that look like they will be extending their NFL rights for the foreseeable future. Two of them are somewhat similar: Disney, which owns ABC and ESPN, is a $238 billion dollar media leviathan since their acquisition of the Fox assets. Comcast, which owns NBC, has a market cap of $203 billion. There’s a school of thought that these two companies could try and blow Fox, $21 billion, and CBS, $16.5 billion, out of the water when it comes to bidding for NFL rights, but that might not make the most sense for the NFL, which has produced the largest possible audience by having all four networks constantly promoting its product.

The smartest move for the NFL is to do what it’s doing now, spread its rights around all four companies and use their broadcast megaphones to drive as many eyeballs as possible to its product.

Which is why the tech angle that isn’t being talked about as much might be more interesting.

At the present moment CBS has a market cap of $16.5 billion and Fox has a market cap of $21 billion. Putting that into context, Apple’s market cap is $1.3 trillion and Amazon’s market cap is right at a trillion dollars as well.

Both Apple and Amazon have moved aggressively into original programming of late. So if Apple and Amazon are both interested in expanding their media portfolios into sports, why wouldn’t the two companies look at acquiring Fox or CBS as part of the new round of NFL rights negotiations? Again, the NFL isn’t likely to give Apple and Amazon the rights to their product because streaming doesn’t have the audience scale the NFL craves right now, but what if Apple and Amazon owned a broadcast network? Then they could use CBS and Fox to air the NFL games and craft impressive streaming options around those products for their existing customers.

That way the NFL could have its cake and eat it too. The NFL would have major tech partners going forward, but it would also retain the scale of the broadcast networks for the next decade plus. (There’s also an argument to be made here, by the way, that Amazon or Apple should buy the NFL Network for this same reason).

Sure, you can argue this doesn’t make sense for either Apple or Amazon because we’re rapidly moving to a world where everything is streaming, but the broadcast networks, at least for the next decade, and potentially much longer, have an audience reach and scale that you simply can’t find anywhere else. The NFL wants its games on broadcast networks. So if you want the NFL, you probably need a broadcast platform, which Apple and Amazon don’t have.

Fox and CBS are profitable and relatively small acquisitions for companies of Amazon and Apple’s size. (There have been rumors in the past that Apple might buy Disney. That’s still possible, but Disney’s size makes that purchase more challenging.)

In fact, there have been rumors in media circles this is one reason CBS didn’t want to pony up big dollars for an SEC football extension. Remember, CBS has the SEC game of the week under contract for four more years. CBS was given the option to extend the SEC, but the network was told they’d have to increase the amount they were paying for the final four years of the deal. Given how much CBS was making on the deal, this would have been a no brainer for most companies.

So why did CBS balk at extending the SEC and increasing its rights fees in the meantime?

There’s a school of thought that CBS didn’t want to encumber its balance sheet because the company, which recently merged CBS and Viacom back together to add scale, is going to be sold in the next three years to a bigger company.

This theory makes a ton of sense to me.

And who makes the most sense as a buyer? Apple or Amazon.

(Full disclosure, I’m not just writing this column endorsing the idea making sense, I’m putting my money where my mouth is. I bought CBS stock, which is at a multi-year low, amid the market sell off today).

Plus, the broadcast network’s value to Amazon and Apple doesn’t even consider the possibilities of the other assets both companies have. Fox, for instance, has a massive broadcast studio lot in the heart of west Los Angeles. How much value is there in simply being able to produce all your streaming shows in the heart of west LA? Sure, Amazon and Apple might not want to own FoxNews, but that actually makes the Fox broadcast networks and the Fox sports assets even more affordable. Amazon or Apple could spin off FoxNews into its own company — or give it back to News Corp — and buy the Fox broadcast network, the studio, and the sports cable channels for $15 billion or less. That’s pocket change for companies of their size.

In the process they could lock up major sports rights and, especially in the case of CBS, substantial assets for their streaming networks going forward as well.

Put simply, if Apple or Amazon want to be major players in the world of sports, there’s an easy, and relatively inexpensive way to do so — buy Fox or CBS.

Written by Clay Travis

OutKick founder, host and author. He's presently banned from appearing on both CNN and ESPN because he’s too honest for both.