SBJ Football: NFL reconsidering the Swoosh

Nike still has the rights to design and produce NFL uniforms for three more seasons after this one, but the league is already exploring its options for what’s next, according to sources who saw a presentation during Tuesday’s closed-door owners meeting. Signed in 2018, the Nike contract expires after the 2027 season (in Q1 2028).

It’s early, but bidding is “open and active,” league execs told owners and team officials, citing “several” companies interested in competing with Nike for on-field uniform rights. One source left Tuesday’s meeting believing that Nike still had the inside track, considering the logistical barriers to making a change, but that Nike’s broader corporate challenges have opened the door to a competitor who might be able to offer better economics.

Nike has made the uniforms (and enjoyed on-jersey branding rights) since replacing Reebok in 2012 . The current talks are centered on Nike’s rights to make the on-field product worn by players and sideline apparel. Replica jerseys and other fan apparel is manufactured and distributed by Fanatics under a separate 10-year, three-way deal with Nike and the NFL. If there were to be a change, sources said, the league would likely want to maintain Fanatics’ role in merchandise, but Fanatics would need to sign a new deal with the Nike successor. The NFL is a shareholder in Fanatics.

These deals are normally done years in advance. Nike has had dominant market share for on-field rights, with the business for the NFL, NBA and MLB for years. We don’t know who the NFL is talking to, but Adidas and New Balance are possibilities. Whether there’s a change or not, manufacturing would still be done by third parties as it is today under Nike’s oversight.

The state of NFL viewership remains strong, on pace for its best average since 2015 through Week 6. Viewers have not slid over to cable news coverage around the presidential election as they had in prior election cycles. Overall NFL viewership is up about 0.5% at the same time last year, averaging 17.4 million viewers through Week 6. It’s the best number at this point in the season since 18.8 million viewers in 2015. 

Back in 2016, cable news outlets (MSNBC, Fox News and CNN) were seeing gains north of 30% during election season, and the NFL took direct hits to early numbers when two highly watched Hillary Clinton-Donald Trump debates aired against “Monday Night Football” and “Sunday Night Football” games. But this year, the lone presidential debate this fall and the vice presidential debate avoided NFL games -- combined with the fact that audiences are not rushing to cable news anywhere near the levels of past years.

Fox is seeing the biggest gain, up 7% for its Sunday NFL windows to date (18.4 million vs. 17.3 million). That’s also the network’s best figure through Week 6 since 2019 (18.9 million). Helping lead Fox’s gains is a 12% jump for its national windows at 4:25pm ET. Those windows are averaging 25.1 million viewers -- a figure that should go up with Sunday’s 49ers-Chiefs game in the window, as noted by Fox Sports’ Mike Mulvihill on the SBJ Sports Media Podcast that dropped today .

CBS’ average of 18.4 million viewers is up 4% through Week 6. CBS and Fox are neck-and-neck in average viewership to date, with CBS having an edge of just 20,000 average viewers.

For "Thursday Night Football," Prime Video is averaging just under 14 million viewers, up 3% season-to-date. Each of Amazon's first five games have drawn north of 12 million viewers, a figure that was only reached once during Prime Video's first exclusive season with "TNF" in 2022. Prime Video also drew its best "TNF" game yet with Giants-Cowboys at 16.2 million in Week 4.

Two networks are seeing lower viewership: NBC and ESPN.

NBC’s package of NFL games is averaging 22.6 million viewers, down 2% to date. Bengals-Giants in Week 6 this past weekend had to compete with a bigger-than-normal figure for Game 1 of the Dodgers-Mets NLCS. NBC also was hit with a 90-minute delay for “SNF” in Week 5 when lightning halted Cowboys-Steelers. But NBC did start the season strong with Ravens-Chiefs delivering the best NFL Kickoff game audience on record. 

ESPN is down 11% for “Monday Night Football” through Week 6, as the network went without an ABC simulcast strategy for a number of games. That shifted recently, and ABC was added to the most-recent Bills-Jets game in Week 6 (but didn’t help much with a Cowboys game to compare to in Week 6 last year). Games across ESPN/ABC/ESPN2 (the Deuce has the ManningCast) are averaging 13.4 million viewers, down from 15.1 million at the same point last year.

The ManningCast has also dropped 14% through four telecasts, with Peyton and Eli averaging 1.1 million viewers vs. 1.3 million at the same point in 2023.

Last week, this newsletter looked at how NFL owners want to see more on international strategy before making decisions on a potential 16-game package abroad (like is there a realistic path to new league-level revenue via media rights sold overseas and/or a new Sunday morning domestic package?). NFL Network’s two Sunday morning London games this season to date are up 2% so far this season, but those 9:30am ET games have averaged only average 4.8 million viewers (vs. 4.7 million for the first two matchups in 2023). Those 9:30am games on NFL Network over the years have crossed 5 million viewers just a couple of times, so how much would such a package be worth on the market?

At Tuesday’s meeting, NFL owners approved four new club minority shareholders , including the most decorated QB of all time. The same day, Sportico reported three celebrity athlete investors are in line for shares of the Bills. Meanwhile, the Dolphins are preparing to sell 10% to Ares Management, which would be the first of presumably several institutions to take NFL positions. We know of several other LP sales efforts afoot.

By historical standards, this is all highly unusual. Teams with diverse syndicate ownership have always been the exception, with most held closely by single individuals or their families. Newsworthy LPs -- either through size of their share or their personal prominence -- have always been rare. Not anymore. Why?

• Diversity. In March 2022, owners officially declared that going forward, potential ownership groups with racial minorities would be seen more favorably than those without. This alone incentivizes more LPs. The Broncos and Commanders’ new buyers both complied.

• Slower future growth. With so much NFL value growth in the rear-view mirror, some strategists conclude the next era of growth won’t be as robust in terms of percentage return. If that’s true, it makes less sense to own 100% of a team. That’s got people thinking about taking cash off the table.

• Tardiness. The NFL is simply late to the sports industry-wide trend of celebrity shareholders as marketing vehicle and realizes how valuable it can be.

• Tom Brady formally became a limited partner in the Raiders after NFL owners voted 32-0 to approve the transaction. Brady and his co-investor, Knighthead Capital Management founder Tom Wagner, bought 10% of the team. They will pay $220 million for the equity investment, plus about $24 million in a “Flip tax” payable to the other owners, a condition of the Raiders’ relocation from Oakland in 2020. The deal values the team in the range of $3.5 billion, sources confirmed.

• NFL team owners wishing to sell equity to private equity funds under the league’s new policy may be challenged to close their deals by the end of the calendar year, said Chiefs owner and finance committee chairman Clark Hunt.

• NFL owners formally awarded Super Bowl LXII in 2028 to Atlanta, giving that city its second big game in nine years. The decision was a coup for Falcons owner Arthur Blank, who has made his desire to host another Super Bowl publicly clear. His popularity among NFL Commissioner Roger Goodell and other key owners played a role in this vote, insiders say. 

• Harris Blitzer Sports & Entertainment signed Campbell’s to an expansive sponsorship deal that will also include the Commanders, even though the NFL team isn't part of HSBE (but share common ownership in co-founder Josh Harris). Campbell’s will have a presence at the Commanders' USO Tent at Northwest Stadium, a premium tailgate for active duty military, veterans and their guests. Concessionaires at each relevant venue are not party to the deals, but the parties do hope to use the sponsorships as a starting point for larger in-venue distribution, with Campbell’s CEO Mark Clouse noting the potential of food-service soup sales for football and hockey (Levy Restaurant is the concessionaire for Northwest Stadium and Prudential Center).

• The Broncos’ Throwback Game against the Raiders at Empower Field at Mile High in Week 5 produced the highest game day and weekly merchandise and food and beverage sales in team history, reports SBJ's Bret McCormick.