Warner Bros. Discovery and ESPN strike 5-year deal for College Football Playoff games

Disney will keep exclusivity on the championship game throughout the terms of the contract, which runs through 2031, said the people, who asked not to be named because the details are private. Disney is paying about $1.3 billion per year for rights to the entire College Football Playoffs.

The new 12-team College Football Playoff slate debuts in December, replacing a four-team tournament that began in 2014. Under the new format, the top four teams get byes while teams seeded No. 5 through No. 12 play first-round games at the home stadium of the higher-ranked team.

ESPN will produce the games and primarily use ESPN talent for the broadcasts, which will be TNT branded, said the people familiar. As part of the sublicensing agreement, Warner Bros. Discovery is paying ESPN an average of “hundreds of millions” per year for the games over the course of five years, though less in years one and two when it only has two games per year, said the people.

Warner Bros. Discovery has the exclusive rights to sublicense the games for the length of the deal.

“It is exciting to add TNT Sports, another highly respected broadcaster, to the College Football Playoff family,” said Bill Hancock, executive director of the College Football Playoff, in a statement. “Sports fans across the country are intimately familiar with their work across a wide variety of sports properties over the past two decades, and we look forward to seeing what new and innovative ideas they bring to the promotion and delivery of these games.”

This year’s first round of the CFP will take place on Dec. 20 and 21.

Warner Bros. Discovery plans to add the games to its Max sports tier. The company is bulking up on live sports while in the middle of a difficult negotiation with the National Basketball Association for a package of live games.

TNT has been a partner to the NBA for nearly 40 years but risks losing the games to Comcast-owned NBCUniversal and Amazon if Warner Bros. Discovery decides to forgo its matching rights, or, potentially, if the league opts to ignore those rights.

College football is some of the most popular programming on television. Michigan’s semifinals victory over Alabama last year drew an average audience of 27.2 million viewers — the most watched non-NFL sporting event since 2018.

Even if Warner Bros. Discovery loses the NBA, it will now have both CFP and the NBA until mid-2025, in addition to several weeks of games for the NCAA men’s basketball March Madness tournament, men’s and women’s soccer, NASCAR, Major League Baseball and the National Hockey League. That should help the company in its upcoming carriage renewal deals for TNT and its other cable networks.

ESPN sublicensing to Warner Bros. Discovery also keeps all of the CFP games on Venu Sports, the new sports streaming service that’s being developed by Disney, Fox and Warner Bros. Discovery and is expected to launch in the fall.

Disclosure: Comcast owns CNBC parent company, NBCUniversal.

WATCH: The root problem facing streamers is the lack of daily usage, says LightShed’s Rich Greenfield