Deeper Dive—Did the NFL deal a death blow to the MVPD bundle?

The health of the multichannel TV bundle is already steadily declining but the NFL’s newest distribution deals – which lean heavily into streaming – may have officially killed it.

That’s according to Lightshed’s Rich Greenfield, who marked down March 18, 2021 as the day the bundle died.

As it currently stands, there are 81.3 million pay TV subscribers in the U.S., according to Leichtman Research Group. That’s across cable, satellite, telco and virtual MVPDs. UBS estimated that the U.S. pay TV industry lost 1.3 million subscribers in the fourth quarter. The analyst firm said the total equals a 5.1% rate of annual decline, compared to 4.6% in third quarter and 4.8% in the fourth quarter of 2019.

The ongoing declines are likely heading toward a floor where they would meet the base of pay TV subscribers still willing to fork over relatively high monthly fees for reliable access to live content like news and sports. But Greenfield estimates that after the latest round of NFL distribution rights renewals, that ground level could be much lower than originally thought.

“What we thought was a 40-50 million subscribers floor due to the NFL is probably now closer to 20 million, as more and more marquee sports content (especially NFL content) becomes available outside the legacy multichannel bundle,” he wrote in a research note.

The most notable streaming aspect of the NFL’s new distribution deals is the agreement with Amazon. Beginning with the 2023 season and running through 2033, Amazon Prime Video will be the only place to watch Thursday Night Football in what the NFL called its first all-digital package. Amazon Prime Video has been streaming NFL games since 2017 but within a tri-cast model it shared with broadcast partners like Fox.

However, all the NFL’s media partners built streaming into their new deals. CBS kept its Sunday afternoon AFC games and will livestream them on Paramount+. ABC/ESPN will be able to simulcast all games on ESPN+. NBCUniversal’s Peacock will simulcast all Sunday Night Football games and will get exclusive access to some NFL games throughout the deal. And Fox expanded its digital rights so Tubi can deliver NFL programming. Lightshed said that in Fox’s case, the stage could be set to add a subscription tier to Tubi for accessing NFL content.

Since these are simulcast deals, it means that NFL games will still show up on CBS, NBC, Fox, ABC and ESPN within the MVPD bundle for a long time. However, consumers will have more platform options for watching games and fewer reasons to stick with a bundle of channels they may not want just so they can get the NFL.

“Given the acceleration of cord-cutting and legacy media’s urgency to build their own streaming services and connected TV advertising presence, we suspect all will utilize their simulcast streaming rights sooner than later. With more and more NFL content available outside the bundle, the legacy multichannel bundle will evaporate even faster than expected (cord-cutting) and the ultimate subscriber floor will be lower than anyone thought possible before,” Greenfield wrote.