NFL Set to Close Major Media Deals Worth $3.2B Annually

The National Football League is close to extending three major media-rights deals that should earn it a total of roughly $3.2 billion a year from its broadcast partners over the course of the 8-year contract.

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The deals — which would be struck with News Corp.’s (NASDAQ:NWSA) Fox, Comcast’s (NASDAQ:CMCSA) NBC, and CBS Corp.’s (NYSE:CBS) CBS — would last through 2021, and represent a 60% increase over their prior contract

The broadcast media agreements, when added to deals with Walt Disney’s (NYSE:DIS) ESPN and satellite operator DirecTV (NASDAQ:DTV), are expected to lock in average annual media fees of about $6 billion for the NFL.

The NFL’s recent $15.2 billion deal with ESPN for “Monday Night Football”, which also spans eight years through 2021, includes an average annual rights fee increase of $800 million, bringing ESPN’s average payment to the league to $1.9 billion per season. The deal also allows ESPN to show games on certain portable devices.

The NFL and media executives are now in the process of exchanging term sheets. After months of negotiations, they hope to effect a deal before the holidays.

The current deals with the NFL’s cable and broadcast partners expire after the 2013 season. Those generate roughly $3 billion a year for the NFL, not including revenue from DirecTV. The NFL is projecting revenue of about $9.4 billion this year.

The size of each network’s increase would be tied to the value of its deal and will by no means be the same across the board. NBC currently pays an average of $600 million a year for its Sunday night package. CBS pays $623 million for the American Football Conference Sunday afternoon package, and Fox pays $713 million for the National Football Conference Sunday afternoon package.

DirecTV pays $1 billion a year to offer Sunday Ticket, which provides subscribers with all Sunday afternoon games and a variety of other NFL programming.

The popularity of NFL programming means networks have little choice but to accede to fee increases. In fact, many networks are spending more so that they can broadcast the games on any screen, from laptop computers to tablet devices to mobile phones, allowing fans to watch NFL games away from their TVs with a paid application.

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The issue has led to debate over which devices fans should be able to use to view games. Verizon Wireless (NYSE:VZ) recently signed a four-year contract worth $720 million with the NFL allowing its customers to view the league-owned RedZone channel, which highlights scoring plays and other critical moments in games, on their smartphones.

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