In the aggregate, broadcasters are paying $10 billion per year to air NFL games. But are any of them making money doing so?
One would be right to presume the answer is yes. After all, why pay billions of dollars each year for the most expensive content on the planet to not turn a profit? The answer might not be that simple, at least according to former ESPN president John Skipper.
On a recent episode of Pablo Torre Finds Out, Skipper claimed the NFL is “a loss leader” for broadcasters.
Former ESPN president John Skipper on the “dangerous scenario” the NFL is headed towards — where tech and streaming giants don’t need an NFL package in order to exist. pic.twitter.com/edkqLqvgXc
— Pablo Torre Finds Out (@pablofindsout) May 16, 2026
“I don’t know what the books look like at NBC or CBS, but everybody’s losing money on their NFL deal. It’s a loss leader,” Skipper argues. “CBS is not generating $2 billion worth of advertising, and their package is going to go up to $3 billion,” the former ESPN boss claimed as part of a larger point about tech companies like Google and Amazon not necessarily needing to overpay for the NFL like traditional broadcast networks.
His assertion that the NFL is a loss leader, however, didn’t jive with former Fox Sports executive Bob Thompson’s view of the situation. Thompson, who is now a sports media consultant, pointed out a rather obvious revenue stream separate from advertising that is buoyed through ownership of NFL rights: retransmission fees.
I have had several people ask me about this segment on Torre’s podcast so I thought I would respond here as opposed to DM’s.
To assert (first 20 sec) that nobody is making money on their NFL packages is misleading in my mind.
Let’s look at it how TV networks look at it…On… https://t.co/iYJ4gnAOnw
— Bob Thompson (@rltsports) May 18, 2026
Retransmission fees are paid by distributors like Comcast and DirecTV to include broadcast networks like CBS and NBC within cable or satellite packages. They’re essentially equivalent to a carriage fee, calculated on a monthly, per-subscriber basis. Additionally, broadcast networks like CBS and NBC make money via reverse retransmission fees. These are licensing fees paid by local affiliates bearing the CBS or NBC name, but owned by a different company (for instance, Sinclair), allowing the local affiliate to broadcast national programming like the NFL or 60 Minutes or NCIS.
Thompson estimates that the NFL alone drives approximately 60% of all retransmission fees; perhaps even more for a network with limited entertainment programming like Fox.
Thompson then explains how, while factoring in retransmission fees, the NFL is clearly a profitable enterprise for broadcast networks.
For simple, but effective illustration purposes let’s look at CBS. They generate something like $2.5 billion in total retrans payments each year. So, we will allocate (60%) $1.5B to NFL (by the way, those fees are going up in 2027 due to contracts expiring). Throw in about $1.35 billion for ad revenue in a typical NFL season. There are also lead in/out bumps to other programming that while not necessarily allocated to the NFL P&L, do provide additional financial benefits.
So, we have $2.85B in total revenue less $2.1B in rights fees which equals to a $750m surplus. Now I’m not sure of their exact season long production costs, but I guarantee you it is not $750 million. Let’s assume $200m in a non-Super Bowl year. Nets them $550 million for the year. Are these exact numbers? No, but they are pretty close.
So, what about a Super Bowl year? Figure an additional $30m or so in production for a Super Bowl year, but an astounding $700m in extra ad revenue. There is no additional Super Bowl rights fee. It is baked into the yearly fees.
Of course, Skipper knows this; he likely just wasn’t exacting with his words.
That said, the calculus for ESPN is a bit different than the broadcast networks. ESPN, with its tonnage of live sports rights, could conceivably command lucrative distribution fees even without the NFL. But that’s not the case for broadcast networks, which are heavily reliant on the NFL to maximize its revenue stream from distributors and affiliates.
So is it fair to say the NFL is a “loss leader” for the broadcast networks? Well, if you’re looking at it purely from the standpoint of advertising revenue sold against NFL games, then yes. But if you’re looking at the broader picture, and the leverage NFL programming provides broadcasters during distribution negotiations, it’s a no-brainer that the NFL is a profit engine for broadcast networks. And increasingly, it’s the only profit engine they have.
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