The National Football League is on the clock and is set to begin its 102nd season on Thursday.
The defending Super Bowl champion Tampa Bay Buccaneers will play the Dallas Cowboys in what should be a highly regarded opener under two popular quarterbacks – Tom Brady and Dak Prescott. Meanwhile, the NFL’s overall opponent remains Covid, with more variants developing and fears of another wave of cases in the fall.
A positive case has already impacted the season opener, with Cowboys starting offensive lineman Zack Martin missing the game. And last month there was a mini-breakout within the Tennessee Titans. The NFL said more than 99% of league and team staff have been vaccinated, but added that more positive cases are expected this season, even among vaccinated individuals. Still, the league remains adamant to finish the season on time. The NFL has already fined players for Covid-related violations and threatened forfeiture to teams that don’t follow the rules.
So the show continues. Here’s a quick look at what’s happening on the business front before the 2021 NFL season kicks off.
On the hunt for 100 million viewers
After agreeing to pay more than $100 billion over the next decade for its media rights, the NFL’s viewership will remain in the headlines this season, especially with networks raising ad rates to pay for their investment.
ViacomCBS will further leverage its NFL content and return the Nickelodeon game during the postseason. The kid-friendly broadcast was popular and could attract marketers looking for a younger audience. And CNBC parent company NBCUniversal thinks the Super Bowl broadcast could draw 100 million viewers. The ad rate for the Super Bowl in 2022 is already expected to rise to about $6 million, up from $5.5 million this year. At that rate, it will likely eclipse $545 million in revenue CBS Sports earned from the 2021 game.
The question is, will the NFL’s top game in a new TV consumption environment ever draw more than 100 million viewers consistently again?
The Super Bowl failed to draw 100 million viewers in two of the last three years, after nine consecutive years eclipsing that total. The 2021 game averaged 96.4 million viewers (including streaming) for the Bucs vs. Kansas City Chiefs game. It is the least watched Super Bowl game since 2007.
NBC last broadcast the Super Bowl in 2018, attracting more than 100 million viewers. The 2015 game between the New England Patriots and Seattle Seahawks remains the most watched Super Bowl with approximately 114 million viewers, and that game was also NBC.
Brady should help get things going
Both games featured Brady, who started 2021 strong on and off the field.
Brady, 44, won his seventh Super Bowl after leading the Bucs past the Chiefs and taking back the best-selling merch spot from Patrick Mahomes. He even got into the NFT business. He will also want to rise in the record books on Thursday.
Brady needs 300 passing yards to join quarterback-turned-NBC-Sports analyst Drew Brees as the only two players in NFL history to have at least 100 career games of 300 or more passing yards. Doing this in a primetime matchup should only help the narrative component of the broadcast.
NBC aims to top 19.3 million viewers on average, which was what the opener drew for last year’s matchup of Chiefs and Houston Texans. According to ad data company EDO, the network brings in an estimated $50 million in ad spend for NFL openers.
NFL season a ‘monumental event’ for gambling companies
And with football back, more sports bettors will be looking for extra income around NFL games.
According to the American Gaming Association, it is estimated that a record 45.2 Americans will bet on games during the 2021 season, with 19.5 million bets online. The company added that Americans wagered $27 billion on sports in the first seven months of 2021, generating more than $350 million in federal, state and local taxes.
With states like Michigan, Virginia and Arizona now allowing legalized gambling, players from PlayUSA, which follows the regulated marketing of sports betting in the US, are estimated to be able to wager more than $20 billion on NFL and college football-related betting this season.
So far, the Chiefs and Bucs are the favorites to win the Super Bowl. A person from New Jersey already bet $38,000 that the Bucs would finish with a perfect record. The bet was made through Caesars Sportsbook and could net $1.3 million if the Bucs go undefeated.
Eric Hession, co-president of Caesars Entertainment Digital, the division that runs his sportsbook, called the start of the NFL season “a landmark event.”
He added that Caesars’ technical teams are testing its systems by using large amounts of concurrent bets and trades to prepare for the volume of NFL betting this weekend.
“Each [sportsbook] recognizes that the NFL is the premier betting opportunity for the season, and it’s the real catalyst for getting customers to come to your property, download your app, or join from a betting experience,” Hession told CNBC on Wednesday.
Hession said Caesars has already pledged more than $400 million for its parlay product, and has been offering a $25 million reward every week throughout the season. In this product, bettors wager $10 and try to predict point spread bets for each NFL game. The parlay card offering is available in New Jersey, Washington DC and Nevada.
With the NFL presence returning and restaurants and sports bars back up and running after pandemic closures during the 2020 season, Hession predicted a “dramatic” increase in sports betting.
NFL business continues to thrive
Caesars is one of the top three gambling companies that signed exclusive deals with the NFL last April. The agreement will allow Caesars to use NFL intellectual property around its sports betting offerings, and it will also help the league increase its national revenues.
The NFL earned approximately $9.8 billion in national revenue, with 32 teams receiving a record $309 million each, according to Green Bay Packers shareholder filings. Much of the NFL’s revenue comes from media rights and sponsorship, which brought in $1.62 billion last season.
Early estimates from sponsorship valuation agency IEG suggest that figure will rise to $1.72 billion for the upcoming season. In addition, IEG noted that revenue from tech sponsorships from Cisco, Microsoft and a beverage deal with alcoholic beverage company Diageo will help the NFL thrive in sponsorship money.
NFLPA to launch its internal business
On the players side, expect discussions on Covid protocols and debates over vaccine mandates to continue throughout the year with the competition.
The union continues to advocate for daily tests for all players to help prevent outbreaks, but the NFL only approved weekly tests for vaccinated players and daily tests for unvaccinated players. Aside from Covid issues, there are also internal issues for the NFLPA to resolve.
Executive Director DeMaurice Smith’s future remains unclear, but more will be revealed this month. First, NFL players will start the election to determine whether Smith will lobby to keep his position unopposed. Smith must vote unanimously on the NFLPA’s executive committee, or receive approval from the board, which is made up of players from all 32 NFL clubs. Here, Smith needs at least 17 out of 32 votes to keep the executive director’s seat or face opposition.
Smith was first elected in 2009, winning three elections to retain the position. Under Smith, the NFLPA has expanded its business, including closing a stock deal with Fanatics, which will take over their trading card merchandising rights. Under Smith, the NFLPA also renewed a licensing agreement with Electronic Arts, creator of the popular Madden video game franchise, and grew its presence in professional video games.
Smith also signed a new 10-year collective barge agreement with NFL owners last year. Under the agreement, the minimum salary for players with no experience has increased again this season and is now $660,000, up from $610,000 in 2020. That figure will increase by $45,000 per season for the remainder of the deal, reaching $1 million by 2030.
But it’s this CBA deal that lingers over Smith’s future.
The NFL has added one more regular season game thanks to the pact. Some players are still angry about that, blaming the union leadership for additional health risks associated with the added matches. Asked about Smith’s future after the 2020 employment contract, Lorenzo Alexander, a member of the executive committee, told CNBC that a unanimous decision by the executive group is unlikely.
“I can say based on what has happened in the past year or so, it will probably be opened up to the board, and they will have the opportunity to decide what happens next,” Alexander said in March 2020.
Disclosure: NBCUniversal is the parent company of CNBC.