First up is the NFL contract.
David Ellison and his partners, some of them from oil-rich Middle East nations such as Saudi Arabia, Qatar and Abu Dhabi, now have the combined Paramount and Warner Brothers Discovery businesses under one roof. Skydance has CBS and TNT and that is where the sports industry enters the Skydance picture. Ellison more than likely overpaid in purchasing Warner Brothers Discovery for a reported $110.9 billion. Now comes the hard part, paying down the debt of the purchase. There will be massive firings, a closing down of various parts of the business, a combining of the Paramount and HBO Max streaming services and the question of what to do with the sports properties in the newly merged business.
Skydance’s Paramount CBS unit has the broadcast and video rights to National Football League games, the National Collegiate Athletic Association’s Men’s Basketball Tournament or March Madness as well as The Masters golf tournament and UFC matches. TNT holds Major League Baseball and National Hockey League rights. Under David Zaslav, Warner Brothers Discovery picked up ESPN sublicenses for the College Football Playoff as well as the Big 12 college football and basketball package and signed a deal to carry the French Open tennis tournament through 2034. The NFL rights are a problem. The NFL has a clause in its CBS deal. If there is a change in the ownership of Paramount that could trigger a contact renegotiation. The NFL is looking to renegotiate its over-the-air television deals. Paramount CBS is paying the NFL around $2.1 billion annually for the right to television NFL games. That contract is up at the end of 2029. Ellison told CNBC that “We have a great relationship with the NFL. We anticipate being in business with the NFL for the foreseeable future.” But there is debt and that could impact Skydance’s sports deals.
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