Who Needs the Other More: ESPN or the NFL?

Not long after last week's TV[R]EV post around future sports media rights, a CNBC report revealed that the NFL was closing in on new deals with existing TV partners CBS, FOX and NBC for new broadcast deals worth about double their current rates. Noticeably absent in that list, however, was Disney-owned ESPN.

ESPN currently airs Monday Night Football each week during the season, but pays more than its counterparts for inventory that's appeared to lose viewership over the course of the current deal and sat last in terms of average viewership this past season, per Nielsen audience numbers. The network's deal in place right now doesn't include the additional $100 million per year it pays for a one-game wildcard simulcast on ESPN and ABC as well, though.

According to the recent CNBC report, Disney's balking at the 100% price jump -- though a new deal would also net them more benefits: streaming rights, more Monday night doubleheaders with ABC and putting ABC into the Super Bowl rotation.

These negotiations are far from over, but if Disney won't meet the NFL where the other partners are on price, it's interesting to discuss which party may need the other a bit more.

Though the NFL is the top show on television by TV ad impressions (per iSpot), the Monday night returns are a reason to question from ESPN's standpoint. ESPN also has the rights to a ton of top-tier sports inventory -- more than any of CBS, FOX or NBC -- and without the NFL, there's still plenty to watch there. NBA and college football games, which both appear frequently on ESPN networks, were also among the top five shows by TV ad impressions last year, according to iSpot.

ABC/ESPN/Disney has owned NFL primetime rights in some form since 1970, and there's obvious value in being a league broadcast partner. It's part of why Amazon's willing to shell out a ton to stream Thursday night games. And it's why ESPN's already paying nearly double what FOX and CBS do for fewer games and no current Super Bowl rotation access.

ESPN's NFL coverage apparatus isn't just limited to the game broadcast either, of course. The network covers the NFL Draft for months on end, and has made it a simulcast event. Various shows cover the league both in-season and during the offseason, including NFL Live, NFL Matchup, NFL Primetime, NFL Rewind and Sunday NFL Countdown. ESPN could still air those programs without league broadcast rights, but... would they want to? Doing so would require them licensing footage from broadcast competitors and the NFL, and ultimately using air time to drive viewer interest in a product they'd no longer have a stake in.

While the NHL is not nearly as popular as the NFL, you can see how the network deprioritized coverage of hockey in the last decade and a half with no games appearing on ESPN's linear channels. You can't do the same with the NFL, but there's a case to be made that ESPN would want to move away from the same level of coverage. That could also have a negative impact on network talent, which has a heavy emphasis on NFL coverage and analysis as well.

And that's why the NFL potentially has the advantage here. That doesn't mean they'll be able to get double the price from Disney. But it means they have a little more leverage.

Ultimately, if Disney were to walk away from negotiations (unlikely), there are plenty of suitors for the Monday Night Football deal, including at least some of the CBS/FOX/NBC group, Amazon and maybe even Apple -- and they'd be willing to pay what the NFL wants here. Less exposure on the most-watched sports network (ESPN) sounds problematic, but you could make a case that the lack of NFL inventory on the network could encourage more cord-cutting, or at least fewer viewers.

Even if ESPN still opted to cover the NFL at the same level, that would be a net win for the league, as a channel without broadcast rights would need to license content that continues to drive viewers to the NFL. Another option, if ESPN opted to decrease original league content on its networks, would be to air NFL Network programming instead, similar to what ESPN's done with some MLB Network content in the past. Again, another win for the NFL, which would continue to get eyeballs on its league, shows and talent while still getting the dollar amount it wants for TV rights.

The fact that the other TV rights partners are largely on board with 100% increases already removes most of the cards from ESPN, so it would seem like there will be a deal between the two sides sooner rather than later -- in fitting with the NFL's desired timeline of getting a deal done before next season. Maybe it means a concession around the Super Bowl or Monday night doubleheaders. But ultimately, the NFL's going to get what it wants here, and then move on to Sunday Ticket negotiations, if it hasn't already begun those talks.