Fox will have broadcast rights to NFL Thursday Night Football for the next 5 years in a deal that is reportedly worth over $3 billion. That would work out to an average of $60 million per game, up from the $45 million NBC and CBS paid per game over the past 2 years and up from the $37.5 million CBS alone paid in 2014 and 2015. The broadcasts will be presented by Bud Light.

The deal gives fresh credence to the idea that “live sports are TV’s firewall” against changing viewer behaviors and the rise of SVOD. The “firewall” concept has been around for years now and has driven the exorbitant rise in sports rights and the multi-billion dollar “sports tax” that pay-TV subscribers who are not sports fans pay each year.

To be sure, sports remain very popular, but every industry trend indicates that their value to TV networks will likely decrease going forward. That suggests TV networks should actually be paying the same or less for sports rights. But Fox’s deal shows just how pinched networks are becoming to hold on to their audiences and how unique the economics of sports has become.

Most important to understand is that audiences for NFL games are decreasing. MoffettNathanson published data earlier this week showing that viewership across all games over the past 2 years is down 13%. Sunday night is down the most at -27%, with Thursday night -13%. Only Sunday football eked out a gain in ’17 vs. ’16. The ’16 losses were initially blamed on the election, but MoffettNathanson now sees “structural” declines occurring. Pick your favorite reason(s): games too long/too violent, player protests, lack of star players, fewer popular teams winning, etc.

While the NFL has its own product problems, larger industry dynamics are now finally catching up too. Cord-cutting which has taken millions of viewers out of the pay-TV ecosystem crucial for tuning into the games unless you have an antenna. Booming SVOD subscriptions which are only getting better all the time as Netflix, Amazon and Hulu alone will spend $15 billion on content in 2018, much of it available ad-free. And compelling alternative ways to spend time: gaming, YouTube, social media, etc.

Add it all up and it’s no surprise NFL ratings are declining. But for Fox, which will be slimmed down following its asset sale to Disney, getting more NFL games is no doubt perceived as the easiest way to hang on to more audience. Whether it can make money at $60 million/game is another question. Pay-TV operators will balk at paying higher retransmission consent fees due to cord-cutting pressures and with smaller audiences, Fox’s ad revenue will be under pressure.

Sports was once the golden ticket for TV networks, but it’s a totally different environment now. There’s little doubt to me that 15-20 years from now much of live sports will migrate to digital platforms, but in the meantime, as the Fox deal shows, even as sports’ “firewall” value declines, TV networks will pay up to hang on to whatever rights they can get.