Will NFL price hike mean Paramount has to slash and burn?
Will NFL price hike mean Paramount has to slash and burn?
Paramount Skydance is making huge investments in sports. Add in a purchase of Warner Bros. Discovery, and huge cuts to other types of content could be on the way.
Has Paramount Skydance already charted an untenable course for itself? Less than a year after Skydance Media merged with Paramount Global, it’s fair to wonder if the company is already over its skis. Those questions are intensifying after new reports indicate that the NFL is looking to significantly increase how much it makes from the Sunday afternoon package of games on CBS through 2033 or 2034.
The league has broadcast contracts through at least 2029 in place already, but wants to renegotiate those deals before the start of the 2026-27 season. Paramount has gotten furthest in its talks with the league, and has reportedly been confronted with a fee increase of 50% to 60% per year in order to simply maintain its current package of games on CBS. Paramount currently pays $2.1 billion per year for those rights, so a little math indicates the NFL is looking for around $3 billion annually in a new deal.
Letting the NFL walk away without a new agreement is a nonstarter for Paramount; pro football games made up more than 80 of the top 100 TV broadcasts in 2025, and CBS has one of the crown jewels of NFL broadcast rights. Even $3 billion per year is a bargain for those rights, but the added expense won’t do anything to help Paramount’s balance sheet.
Paramount is, of course, a huge media company; its full-year revenue for 2025 hit $29.03 billion. The problem is that the big purchases are starting to pile up. Sports expenditures have led the way, starting with a $7.7 billion deal to stream all UFC events for the next seven years. The company abandoned the previous pay-per-view format for numbered UFC events in the deal, shifting them all to stream on Paramount+ with just a subscription.
Andrew Root of Sportico compiled an exhaustive formula to try to project whether or not new subscribers brought to Paramount+ specifically to watch UFC fights would generate enough money to pay for the deal over the course of its lifetime. His conclusion was that, while UFC would bring more than 23 million new subscribers to Paramount+ in the next seven years, Paramount would take a $3.5 billion loss on the deal without generating revenue from another source, such as a price increase for the streamer. The company’s current advertising revenue isn’t enough to fill the gap, either, even with Paramount adding significantly more commercials to each UFC numbered event than were previously shown.
So, Paramount is already looking at some challenging math to make its UFC deal pay. Add an increase of $1 billion per season to keep its NFL rights over the next six or seven years, and the equation becomes even more daunting. Oh, and Paramount also recently emerged successful from a months-long pursuit of Warner Bros. Discovery in a deal valued at over $110 billion.
Clearly, Paramount is going to have to generate large amounts of new revenue and cut costs if it wants to keep all those credit-card swipes from sending the company into an unmanageable situation. Buying WBD will obviously create new revenue streams, but will also come with additional costs, and that could mean major cuts are in store. When Netflix was competing with Paramount to buy WBD, the world’s largest streamer claimed that a deal between Paramount and WBD would lead to $6 billion in job cuts.
Indeed, Paramount has already announced plans to cut back its streaming division. The company will shut down the BET+ streaming service in June, with its content library moving to Paramount+. HBO Max will also be merged with Paramount+ when Paramount’s takeover of WBD is complete. And while Paramount has promised that HBO will remain a robust and independent part of the company, there will no doubt be some cuts involved with the synergies generated by merging the streamers.
However, that still won’t be enough to fill the revenue gap created by all of Paramount’s recent — and likely upcoming — sports purchases. And that could lead to other major cuts around the company, including dropping other sports rights, slowing down production of new TV shows and movies, or even canceling some titles. Multi-hyphenate creator Taylor Sheridan, who has long been a ratings and viewership juggernaut for the company is set to leave Paramount for a new overall deal with NBCUniversal once his current contract expires, and the growing cost of the company’s sports portfolio may have been a factor in Paramount’s decision not to fight harder to keep him.
A price increase for Paramount+ would, of course, help boost revenue generated from the streaming service. After adding BET+ and HBO Max content, there’s no doubt that such an increase is coming, even though the service most recently executed a rate hike in January. Certainly, the company will point to the new additions like UFC and HBO content when the next adjustment comes, but Paramount has also done a great deal of work to position its streamer as affordable. There’s a pricing ceiling for Paramount+, and its brand could be damaged if it surpasses that ceiling.
Paramount may look like a very different company five years from now, whether or not its deal to purchase WBD is consummated. Its huge expenditures on popular sports rights will no doubt bring eyes to its channels and streaming services, but a future featuring expansive cuts may be the price of doing business with the NFL and UFC well into the 2030s. Even the built-in financial backstop that CEO David Ellison’s father, Larry — one of the world’s richest men — won’t be enough to prevent some belt tightening in the months and years to come at Paramount, and unfortunately, that will likely mean that customers will have to deal with higher rates and fewer content options in the future as well.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr., and more. Get free access with a Walmart+ subscription.
Paramount+ includes “1883,” “Tulsa King,” “Star Trek: Discovery,” “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa League, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.