Two years of success broadcasting Englands Premier League proved a basic truth to NBC Sports: It would have to pay a lot more to keep carrying the leagues games.
Now it will. Under a six-year agreement announced Monday that starts next season and is worth about $1 billion, NBC retained the rights to the Premier League through the 2021-22 season.
NBC will pay steeply more for the package starting next season the new rights fee basically doubles the annual cost of NBCs current, three-year $250 million contract but its willingness to do so was an acknowledgment of how the globally popular league has come to redefine NBCs sports cable network, NBCSN, and also of the value NBC sees in Americans growing appetite for top-shelf European soccer.
You do the math, Mark Lazarus, chairman of the NBC Sports Group, said Monday. Thats 2,280 matches over the next six years, plus hours of other related content shoulder programming, original content, library programming which we have used extensively and will continue to use.
In the United States, networks pay far more for the rights to major sports. ESPNs rights fee to the N.F.L. alone is $1.9 billion a year. But American media companies are far more likely to pay high prices for overseas events like the World Cup and the Olympics than for rights to a league based in a foreign country.
NBCs winning bid suggests that it believes it has tapped into a growing, youthful, family-heavy fan base but also that expected offers from rivals pushed it to the $1 billion threshold.
We have always believed in this sport, this particular league, the finest in the world, had a growth trajectory, Lazarus said during a conference call with reporters. He added, We think that theres still plenty of headroom for this property to grow from an audience point of view, both on television and digital.
In 2013-14, NBC and NBCSNs initial season of Premier League games, the networks averaged 438,000 viewers a game, up 118 percent from the audience on Fox Soccer, ESPN and ESPN2 the season before.
Last season, the combined viewership on NBC and NBCSN climbed another 9 percent, to 479,000.
Richard Scudamore, executive chairman of the Premier League, said by telephone that NBC had given the games a focus that went beyond his early expectations.
Theyve thrown their creativity, their people and their whole essence into it, Scudamore said after attending Mondays game between West Bromwich Albion and Manchester City.
The Premier League opened its bidding on Thursday with only NBC, Fox and beIN Sports known to have made submissions. No one was allowed to bid with a partner but, Scudamore said, networks were allowed to designate partners to whom they would subsequently sell games under a sublicense.
ESPN did not bid because of scheduling conflicts. Premier League games are generally played on Saturdays, when ESPNs channels are flush with college football, and Sunday mornings, which would bring them into conflict with ESPNs Sunday morning N.F.L. programming for a large part of the soccer season. ESPN held some talks about sublicensing games from Fox, which has scheduling complications of its own like its new contract to carry Bundesliga games about the same times Premier League matches are being played.
With only about 18 million subscribers, beIN would have had to meet the Premier Leagues strict requirements to expand its distribution through sublicensing partnerships with a broadcaster and cable network. But NBC had no such concerns, having decided to fully devote itself to the Premier League on multiple networks three years ago, when it won the bidding for its current deal.
Lazarus said that after submitting NBCs bids for three- and six-year contracts, he did not hear back for a couple of days.
But we worked through the weekend to finalize the deal, he said.
For NBC, the Premier League has become almost an essential property, especially on NBCSN, where 150 matches will be shown this season, mainly during weekend mornings and afternoons. The rest are shown through a streaming service or, for some of the seasons biggest matches, on NBC.
I think when you look at the quality of live events, the live hours and the fact that it is largely weekend mornings, it has set you as a weekend destination, Lazarus said during the conference call. Later, in an interview, he added, Its created a new sports day part.
The Premier League has quickly become one of the pillars of NBCSN, along with the National Hockey League and auto racing from Nascar, Formula One and IndyCar.
For the first time since its Premier League contract began, NBC will put games on USA, the widely-distributed entertainment network that is part of NBC Universal, this season. By showing 40 games on USA, NBC hopes to expand the leagues reach. In the past, some Premier League games have aired on CNBC. Telemundo and NBC Universo also carry games; the new contract includes the Spanish language rights.
Lazarus conceded that the Premier League had not earned a profit through advertising during its current deal and would not in the next, more expensive one.
But he said: We look at it for what it does for our portfolio from all our revenue streams: advertising, affiliate deals, digital monetization. Its hard to break out what comes from E.P.L. or hockey or Nascar. Its in the total offering. This isnt a deal thats profitable, but we believe it adds to the profitability of our business. And he added, Our sports business is profitable.
