The NFL is close to a deal to swing its highly coveted Sunday Ticket out of market games package to Google’s YouTube, a source close to the NFL confirmed to The Athletic. The Wall Street Journal was the first to report this news. Here’s what you need to know:
- The deal would end DirecTV’s nearly 30-year run with the package, and underscores the migration of sports to streaming.
- The NFL was seeking well north of $2.0 billion a year.
- Apple had been the frontrunner for some time, but left the negotiating weeks ago.
The deal, which still must be voted on by owners, ends the long reign of DirecTV, which launched the package in 1994, giving fans who resided outside of their favorite team’s market the ability to watch the games. The NFL and Google declined to comment.
The deal would mark yet another major inflection point in media, with a major sports property moving from a traditional carrier to streaming. Ironically, DirecTV in the early 1990s was viewed as a pioneer with its satellite service. Now it is losing out to the hot medium in sports.
Google’s YouTube and YouTube TV can use Sunday Ticket to goose their subscription business. How much Google, a division of Alphabet, is paying could not be determined. DirecTV was paying on average $1.5 billion annually, and the NFL was looking for at least $1.0 billion more.
But whether the league got that much is unclear. The value of Sunday Ticket for many has declined with so many national windows scooping up games from Thursday Night Football—now on Amazon Prime—to Christmas Day games and a third Thanksgiving Day game.
Also noteworthy is if the deal includes a carve out for bars and restaurants to be sold separately. Amazon sublicenses Thursday Night Football to DirecTV to bars and restaurants, which generally would struggle to stream the games. So it is possible DirecTV could keep a cut of Sunday Ticket through this avenue.
Apple had long been the front-runner and coveted candidate for the NFL for some time, but could not agree on contract language and backed out of the talks recently.
A lot of the details need to be filled in: How much will YouTube charge for Sunday Ticket, would it sell packages for just one team, individual games? Do you need a subscription to YouTube TV or to YouTube Premium, the $11.99 a month ad-free platform for the video site?
Pricing will be fascinating because it is no secret that DirecTV from a financial perspective lost heavily on the service, by some counts having two million subscribers, many of whom were heavily discounted. DirecTV charged a base price of $300 to $400 a season, not nearly enough to account for its average $1.5 billion annual payment to the NFL. DirecTV saw the package as a loss leader because it got customers in the door, and so that is likely how YouTube will view Sunday Ticket.
Clearly this move will meet the NFL’s objective of making Sunday Ticket more accessible; signing up for YouTube Premium and then Sunday Ticket would be a lot easier than getting a satellite (DirecTV offered a streaming option in those areas where satellite dishes were not possible).
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