In an aggressive bid to reshape the Fox broadcast network into a more formidable sports powerhouse, Rupert Murdoch’s media company agreed to pay an average $660 million a year for the rights to NFL “Thursday Night Football.”

The NFL and 21st Century Fox on Wednesday announced the new five-year partnership, which kicks off this fall.

The $3.3-billion pact to televise Thursday games represents a big bet at a time when the NFL is facing multiple challenges that contributed to a nearly 10% drop in viewership during the just-ended regular season. But Fox is willing to spend heavily to turn its broadcast network into a showcase of live sports after it sells much of its entertainment empire to Walt Disney Co.

Fox will pay 47% more for “Thursday Night Football” over the current-season rate. CBS and NBC collectively paid the NFL $450 million for their shared package of games last fall, which included several match-ups that were duds.


Despite bleeding hundreds of millions of dollars on those packages, both CBS and NBC bid again — but Fox prevailed.

“We are thrilled to have our great partnership with Fox become even deeper and broader than the Sunday afternoon package,” NFL Commissioner Roger Goodell said Wednesday in a conference call with reporters.

It was Rupert Murdoch’s audacious bet 25 years ago on the NFL that established the also-ran Fox network as a force in television. In 1993, the shrewd mogul from Australia wildly overpaid for the rights to the NFL’s Sunday afternoon NFC games, squeezing out then-incumbent CBS. At the time, Fox agreed to pay about $400 million a year, which was $100 million more than what CBS had offered to keep the franchise.

That power play forever changed the competitive landscape of television and led to decades of inflation in sports fees because networks have been willing to overpay for the rights.


Now, Fox will spend nearly $1.8 billion a year for the two NFL packages. And, at age 86, Murdoch is looking to redraw the television map once again.

“If you think about the history of Fox … Fox Broadcasting was built on the power of the NFL,” Fox President Peter Rice said during the conference call. “I think we are getting tremendous value here.”

The package includes 11 weeks of Thursday night games: Week 4 through Week 15, with the exception of Thanksgiving night. (Last season’s CBS-NBC arrangement included 10 games.) The Thursday games will be simulcast on the league-owned NFL Network and the Spanish-language Fox Deportes channel. Fox also gained rights to stream its NFL games to mobile phone users, although the NFL plans to negotiate a separate big-ticket deal with a streaming service such as Amazon or YouTube in the coming weeks.

Goodell and Rice declined to discuss their financial arrangement, which was confirmed by three people familiar with the terms who were not authorized to discuss them.


“Yes, the $660-million was higher than expected, but it’s not surprising Fox was an aggressive bidder,” Wells Fargo Securities analyst Marci Ryvicker said in a research note. “From a strategic standpoint, Fox really needed something to strengthen the network.”

Another prominent analyst, Michael Nathanson, said the deal could translate into $280 million a year in losses for Fox.

“The Fox-TNF deal is both offensive and defensive,” Nathanson wrote in a report, noting that “Thursday Night Football” attracted an average of 13.8 million viewers a game in 2017, which was more than double that of Fox’s top-rated show “Empire.”

“It is no secret that Fox network has struggled outside of sports,” Nathanson said. “Devoting Thursday nights in the fall to football means one less night of original programming to worry about. And despite its declining ratings, Thursday Night Football’s reach ... towers over all of Fox’s original scripted dramas and comedies and would be strong competition against ABC, CBS and NBC.”


Television ratings continue to decline across the board, and the Fox network has had more than its share of struggles. Throughout the industry, TV executives are getting increasingly panicky about finding and retaining programs that can still draw a huge audience.

“NFL football continues today as the most valuable commodity in all of media and we’ve benefited enormously from our close partnership with the NFL,” Rice said.

CBS and NBC on Wednesday expressed muted disappointment in losing to Fox.

“We explored a responsible bid for ‘Thursday Night Football’ but in the end are very pleased to return to entertainment programming on television’s biggest night,” CBS said in a statement. “At the same time, we look forward to continuing our terrific long-term partnership with the NFL on Sunday afternoons.”


NBC, which will broadcast the Super Bowl on Sunday, added that it too submitted “a competitive bid based on our two years of carrying TNF,” according to an NBC Sports spokesperson.

“We’ll now continue to focus on keeping NBC’s ‘Sunday Night Football’ in its perch as prime time’s No. 1 program,” he said.

NBC in December expanded its NFL agreement, which expires in 2022, to allow cellphone users to stream the “Sunday Night Football” games.

But Fox had a pressing incentive to out-muscle its rivals.


Under a $52.4-billion deal unveiled in December, the Murdochs plan to sell much of the company to Disney, including the television and movie studios, FX and National Geographic channels. Regulators must still approve the transaction.

Fox plans to retain core assets, including Fox News Channel and the Los Angeles-based broadcast network, with plans to use them as anchors of a smaller and scrappier enterprise.

Expanding its NFL schedule quickly became a crucial piece of Fox’s mission to rebuild the broadcast network around live sports and news. So Fox’s Rice and the company’s executive chairman, Lachlan Murdoch, penciled in a huge number when they submitted the Fox bid to the NFL earlier this month.

“Knowing how important sports programming and live news is to them was part of what made us feel comfortable in making this commitment,” said Robert Kraft, the owner of the New England Patriots and the chairman of the NFL’s broadcast committee. “We have great confidence that this is going to turn into a great partnership over the next five years.”


There had been concerns in the TV industry that the abundance of NFL football has led to the lower ratings. And there is grumbling among NFL players that the short weeks for teams that play on Thursday are too taxing and could lead to even more injuries.

The NFL has combed through its data base on injury reports and was unable to draw a link to Thursday night games, Goodell said.

“There have been no increase in injuries over that period of time,” Goodell said. “Players are unanimous on the fact that they love the 10 days after a Thursday night game. There are different views, but we will do everything we can to make sure it was the best possible outcome for our players as well.”

In addition to offering more cash, Fox made a commitment to keep the games on broadcast TV. Both CBS and NBC had suggested mixing things up by running some of the Thursday night games on their cable sports channels — to raise the profile of those channels, according to one executive who was not authorized to discuss the various bids.


The NFL rejected that idea.

“We believe in broadcast [television],” Goodell said. “We believe that it is best for our fans because it is the most broadly distributed. The big events continue to be on broadcast television and they amass the biggest audience.”

That’s precisely what the Murdochs are banking on as they construct what they are calling “new Fox.” Pay-TV cord-cutting accelerated in 2017 as consumers ditched their pricey packages that offer hundreds of cable channels. If the trend continues, broadcast networks that are available to anyone with a digital antenna should become even more valuable.

“We are making a commitment to ensure that Fox will continue to offer the best in programming very long into the future,” Rice said.


Fox shares closed down 4% at $36.90.

meg.james@latimes.com

@MegJamesLAT

UPDATES:


5:05 p.m.: This article was updated with additional details.

8:45 a.m.: This article was updated to include information on the deal’s price and other bidders.

This article was originally published at 7 a.m.