To lower expenses and offset the impact from declining subscriptions and increased competition in the wireless and home internet space, Verizon (VZ) reportedly considered trimming—or exiting altogether—its 10-year, billion-dollar sponsorship contract with the National Football League, sources familiar with the matter told The Wall Street Journal.
The 2021 deal made Verizon (VZ) the official 5G network of the football league and deployed the company’s 5G capabilities to enhance broadcasts. But as the telecom company looks at options to lower costs, the contract was reportedly being reconsidered.
“We’re looking at every expense and investment across the business, sponsorships included,” a Verizon spokesperson said to the publication, a sentiment echoed by CEO Daniel Schulman during the company’s most recent earnings call.
“We have $5B of cost transformation in our plans for 2026….we’re carefully examining all areas of our cost structure to run leaner and be more agile,” Schulman said, noting that cuts could come from decommissioning legacy elements in the network and reductions in the company’s workforce, all of which will allow Verizon (VZ) to invest in the customer and return a “significant” amount of capital to shareholders.
But while the company could save on operational costs—Verizon reportedly spends more than $250M each year on sponsorship deals—the penalty for ending its NFL contract and the legal hurdles to overcome made ending the contract prohibitively expensive.
Verizon (VZ) shares are grinding higher on Tuesday, setting an all-time high of $51.09.