RedBird Capital founder and Paramount board member Gerry Cardinale is the latest media executive to demur at the prospect of early renegotiations with the NFL.
In an interview at the Bloomberg Screentime event Thursday, Cardinale said that Paramount-owned CBS would be better off negotiating with the NFL “in a few years when the contract comes up.” The NFL is able to opt out of most of its current rights contracts after the 2029 season.
Paramount is uniquely vulnerable to the NFL’s desire for early negotiations, as the league reportedly holds a change-of-control provision that it can activate within two years of a merger, such as Paramount’s acquisition by Skydance last year. NFL commissioner Roger Goodell has not given a clear answer on whether the league will seek to utilize that option to force a renegotiation with Paramount.
The NFL is widely believed to have been pursuing early negotiations with all of its partners this year, but it had no mechanism in its other deals to force the issue.
Cardinale, who described the NFL as “absolutely critical” to the future of the company, acknowledged that the bill for NFL rights will probably go up.
“Obviously, I’m very close to [the NFL], and we’ve had a lot of very good, long-term strategic dialogues about where they want to go, how important they are in anchoring a lot of the stuff we do,” Cardinale said. “One of the first things I did when we invested in Skydance is we created Skydance Sports. That really was a joint venture with the NFL for all of their unscripted and unscripted programming.”
The NFL is a minority owner of Paramount by way of the Skydance Sports joint venture, Cardinale noted, and thus has “a vested interest in what we’re doing.” The league has said it will comply with the legal principle of maintaining an arm’s length in negotiations with partners in which it holds an equity stake.
The NFL holds a 10% equity stake in ESPN (which it acquired as part of its sale of NFL Network), but its stake in Paramount is “significantly less,” according to CBS Sports president/CEO David Berson.
Fox Corporation CEO Lachlan Murdoch said on the company’s last quarterly earnings call that it would not renegotiate its deal with the NFL early, opting to wait until closer to the contractual opt-out period. The decision came after what Murdoch claimed were “recent, thorough, and productive discussions with the league.”
Earlier in the year, Ellison told CNBC that Paramount has “planned accordingly” to continue its relationship with the league and alluded to an “ongoing negotiation.”
Paramount is days away from being absorbed into the new Skydance Corporation, a company that will be formed out of its merger with Warner Bros. Discovery. The company is expected to have a net debt load of approximately $79 billion and will engage in synergies of $6 billion.
“I think that by the time that [NFL] contract comes up, we should be well on our way to being investment grade,” Cardinale concluded, “and we should be able to put our best foot forward.”
