The Future of NFL and Sports Streaming?
- Feb 3, 2023
The fight for DirecTV's NFL “Sunday Ticket,” a sports staple of traditional television, was the most recent indication that expensive live and popular sports bundles are migrating to streaming services controlled by digital companies.
Sports, and especially the NFL, have traditionally been seen as the backbone of the conventional TV package. Sports channels, particularly those that broadcast live games, command some of the highest rates from pay TV providers and receive some of the best ratings. By broadcasting live games, the NFL earns significant revenue.
In this digital era, people crave the possibility of being able to stream exclusive content on their laptops and mobile devices wherever they go. Sports leagues are working ever more closely with digital businesses as consumers cut cables and as their current contracts with traditional cable providers expire. To attract more customers to their individual streaming platforms, which mostly offer on-demand material such as movies and TV series, those providers are eager for premium content like live sports, one of the most viewed telecasts.
According to Adtaxi's yearly Super Bowl viewership poll, approximately one-third of spectators want to watch the big same on a streaming service instead of on broadcast or cable television. Furthermore, according to Adtaxi, more than 30% of viewers said they would watch the Super Bowl through a streaming service, outnumbering cable (29%) and broadcast (26%).
The NFL revealed that, commencing with the 2023/24 season, its Sunday Ticket package of out-of-market games will be available on Google's YouTube. According to reports, Google has a seven-year license for the Sunday Ticket bundle. The biggest search engine company won the contract in a bid-off against both Amazon and Disney. Over the next seven years, YouTube will pay nearly $2 billion per year for residential rights, according to CNBC.
The Wall Street Journal claims that if certain criteria are fulfilled, the yearly valuation of the streaming agreement may top $2 billion. Until recently, DirecTV held the license for the Sunday Ticket bundle and is said to have paid $1.5 billion annually for the broadcast rights.
Sunday afternoon NFL games played outside of major markets are included in the Sunday Ticket package. Games that are played outside of a consumer's city are referred to as “out-of-market games.”
The Sunday Ticket will be made available to subscribers in the U.S. through YouTube, having started with the upcoming season either as an add-on to its YouTube TV subscription, a digital TV package that is like the conventional pay TV package, or a la carte via YouTube's Primetime Channels.
For the next 10 years, Thursday Night Football will only be available on Amazon Prime Video, with Amazon paying a whopping $11 billion. To expand its content collection, strengthen its advertising division and attract more Prime subscribers who make purchases on its platform, Amazon has introduced other live sports to its Prime service, including European soccer matches and NY Yankee baseball games.
Although the cost has not yet been established, customers are likely to save money by subscribing to YouTube TV and acquiring the Sunday Ticket, which streams NFL games in markets other than their own on Sunday afternoons. Almost all NFL games will be available to them in one location. NBC, Fox and CBS are among the broadcast networks that are part of Google's YouTube TV package.
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Richard Nachmias is an Audit Partner and Partner-in-Charge of the firm's Sports and Entertainment Group. Rich has more than 25 years of experience providing services to companies in the media and technology industries.
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