Fox CEO: Company is paying market price already for NFL rights
TL;DR
Fox CEO Lachlan Murdoch says the company is paying market price for NFL rights and plans to manage potential cost increases by rebalancing its sports portfolio, such as possibly dropping MLB. Analysts warn Fox is vulnerable to rising NFL fees due to its heavy reliance on live sports and linear TV, with a stock downgrade reflecting concerns over profitability if fees increase significantly.
Tags
Fox CEO: Company is paying market price already for NFL rights
Fox Corporation’s NFL Rights Strategy Under Scrutiny Amid Renewal Risks
Fox Corporation CEO Lachlan Murdoch recently stated that the company is prepared to manage potential cost increases from a renegotiated NFL media rights deal by rebalancing its sports portfolio. Speaking during Fox’s Q2 earnings call, Murdoch emphasized that the network views its sports assets holistically, allowing it to offset higher NFL costs by adjusting investments in other properties. This approach comes as the NFL signals intent to renegotiate its media deals earlier than the current 2030 expiration, potentially driving up fees for broadcasters.
However, analysts at Bank of America have raised concerns about Fox’s exposure to NFL rights costs, downgrading the stock to "underperform" and citing a potential 22% reduction in fiscal 2027 EBITDA estimates if the NFL secures a 1.5x increase in annual rights fees. The firm argues that Fox’s business model—centered heavily on live sports and news since offloading entertainment assets to Disney in 2019— leaves it uniquely vulnerable to rising NFL costs. Unlike peers such as NBC or CBS, Fox has not diversified into streaming, relying instead on retransmission fees tied to linear TV’s declining bundle.
Murdoch’s comments suggest Fox may prioritize NFL inventory over other sports properties, such as MLB, which currently costs the network $728 million annually. Dropping MLB after its 2028 deal expires could free up capital to compete for a larger NFL package. Meanwhile, Fox remains optimistic about near-term profitability, with 80% of its FIFA World Cup inventory already sold and expectations of strong advertiser demand.
The NFL’s leverage stems from its role as a “linchpin” for the pay TV bundle, with record revenue ($25 billion in 2025) giving it significant negotiating power. While Murdoch expresses confidence in Fox’s ability to adapt, analysts warn that an accelerated rights deal could force legacy broadcasters to accept fewer games at lower multiples (e.g., 1.5x vs. the NFL’s target of 1.8–2.0x), opening inventory to streamers like Netflix.
Fox’s stock has fallen 3.7% following the downgrade, though it remains 19% above its 52-week low, indicating partial pricing of NFL risks. The company’s strategy—and its ability to navigate the NFL’s impending renegotiation—will likely remain a key driver of investor sentiment in the coming months.
