Department of Justice sets sights on NFL’s media rights deals

The Justice Department is investigating the NFL’s media deals with streaming companies as more of its games are subscription-based.

The investigation first reported by The Wall Street Journal focuses on the financial impact of live sports streaming on consumers and whether the league’s traditional broadcast partners are receiving fair treatment.

The Justice Department did not respond to a request for comment. A government official told NBC News that the department’s investigation into the NFL focused on “affordability for consumers and creating a level playing field for providers.”

Early last month, Sen. Mike Lee (R-Utah) called for an investigation in a letter to the Justice Department and released a statement Thursday on X saying he was happy to see things moving forward.

Congress passed the Sports Broadcast Act in 1961, allowing professional football teams to collectively grant television rights to their games to national broadcast networks without violating antitrust laws. Lee noted that courts have recognized that the law refers to broadcasts that are “advertising-supported and freely available to the public.”

Lee said sports packages offered behind paid subscriptions “no longer fit” the intent of the law that was passed when the public only had access to three television networks.

The NFL has not received a letter from the Justice Department saying it is under investigation, according to a person familiar with the matter who was not authorized to comment. But the league released a statement saying fans can see all NFL games played by teams in their markets on television for free, unlike all other major sports.

“The NFL’s media distribution model is the most fan- and broadcaster-friendly in the entire sports and entertainment industry,” the league said. “The NFL has for decades put our fans first in how we distribute our content.”

The NFL said 87% of its games could be watched on free TV. The remaining 13% on streaming and cable platforms are available on the local television channels of the teams involved in these competitions.

The sports rights landscape has changed dramatically over the past 10 years, as deep-pocketed technology companies such as Amazon, Google and Netflix have provided the NFL with significant leverage in its negotiations with longtime television partners NBC, CBS, Fox and ESPN.

While streaming companies initially avoided live sports due to the high cost of royalties, they found them to be an effective way to attract massive numbers of viewers to their platforms.

Amazon Prime Video pays $1.5 billion a year for the rights to “Thursday Night Football,” a package that was a loser when it aired on broadcast networks. Netflix picked up the rights to games on Christmas Day, while Google’s YouTube became home to the Sunday Ticket package that allows subscribers to access out-of-market games.

The pressure from new competitors comes at a time when companies with traditional television networks are more dependent than ever on the NFL because it has the highest-rated programming by far. NFL packages also give TV channel groups leverage to negotiate carriage rates with cable and satellite companies.

Tensions over the tariff hike are growing as the NFL has the right to open a deal with Paramount, as the company underwent an ownership change last year when it was acquired by Skydance Media. The league is reportedly seeking an additional $1 billion a year from Paramount, which already pays $2.1 billion a year for its set of CBS games.

The league also made clear it plans to exercise its option in 2029 to open the current 10-year media rights contract that runs through the 2032-33 season.

Fox Corporation – home to the Trump-friendly Fox News Channel – relies heavily on the NFL for programming on its television channels and has previously raised concerns about the renegotiation.

Executive Chairman Lachlan Murdoch said he believes the $2.5 billion a year Fox pays the NFL is “fair market value.” But he also told Wall Street analysts that the company may need to reexamine its other sports deals with an eye toward paying more to the NFL in the future.

Last week, Fox and station group owner Sinclair Broadcasting filed a statement with the FCC asserting that the NFL’s antitrust exemption does not apply to streaming platforms that require paid subscriptions.

“Congress has provided a valuable exemption from antitrust laws for leagues that collectively bargain for sports broadcasting,” wrote Joseph Di Scipio, senior vice president of FCC legal affairs and compliance at Fox Corp. “But on its face, the statute does not exempt negotiations that leagues may have with streaming services.”