Amazon likely front-runner for multi-year NFL Sunday Ticket deal — sources

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Amazon is in talks to buy back the rights to the National Football League’s “Sunday Ticket” package and is seen as being spearheaded by others involved in negotiations with the federation, according to people familiar with the matter. this problem.

Amazon is genuinely interested in a multi-year bundle of off-market games, the people who requested anonymity said because the discussions are private. Amazon in May agreed to pay about 1 billion dollars per year to become the exclusive provider of Thursday Night Football games starting next year. That deal made Amazon Prime Video the first streaming service to own an exclusive NFL broadcast package.

An Amazon spokesperson declined to comment on the “Sunday Ticket” discussions.

The NFL is expected to ask for between $2 billion and $2.5 billion annually for the package and wants to wrap up discussions before the season ends in February, two of them said. “Sunday Ticket” has been owned by DirecTV for the past 27 years. Negotiations are underway with interested parties, suggesting the federation is getting closer to choosing a new supplier, the people said.

DirecTV renewed its ‘Sunday Ticket’ in 2014 for eight years. The current contract expires after the 2022-23 season.

NFL Commissioner Roger Goodell told CNBC on Wednesday Sunday’s out-of-market bundles “may be more appealing on digital platforms” as streaming platforms continue to add subscribers at the expense of traditional pay-TV. Goodell also suggested to CNBC that the league is looking for a strategic partner to not only acquire the “Sunday Ticket” rights, but also invest in the NFL Network, which broadcasts NFL content all year, and NFL RedZone, which screens Live footage of game action as teams near touchdown. The NFL currently owns both the NFL Network and the NFL RedZone.

Amazon has competition for Sunday game rights. ESPN President Jimmy Pitaro told Bloomberg this week “Sunday Ticket” is “an extremely valuable product” and is acknowledged Disney had exploratory conversations with the league. Information Apple report have also expressed interest in the package. NBCUniversal’s Peacock is not expected to bid for the copyright, according to a person familiar with the matter.

Several media executives involved in the discussions told CNBC they consider Amazon the preferred company to win the rights to the package. NBC News reported early interest from Amazon and ESPN in the package in July.

DirecTV’s tenure

DirecTV, that AT&T became a new company last month, still considering its options but may not have a balance sheet to compete with Amazon or Apple, has a market valuation near or above $2 trillion, two of them said.

DirecTV has paid about $1.5 billion a year for “Sunday Ticket” for the past seven seasons, and now charges around $300 for the package as an add-on. The satellite TV provider also now offers a “Sunday Pass” as part of its “Selection”, “Last” and “Premium” pay-TV packages.

DirecTV has been losing money on “Sunday Ticket” for years. At its current $300 price point, DirecTV would need 5 million subscribers to break even. DirecTV has averaged nearly 2 million “Sunday Ticket” subscribers over the years, according to a person familiar with the matter. CEO at DirecTV and its majority owner AT&T argued that “Sunday Tickets” have become increasingly diluted over the years as the NFL removed Sunday games and added Thursday, Saturday, and Monday Night games.

However, DirecTV is willing to use “Sunday Ticket” as a loss leader if it turns subscribers into full-year satellite TV customers. That way, the company can offset some of the losses by charging monthly pay-TV fees during the NFL season and the seven-month season.

Why Amazon makes sense

The NFL was able to significantly expand the audience for “Sunday Ticket” by separating the production from DirecTV. The satellite TV provider only allows customers to stream “Sunday Tickets” without becoming DirecTV customers if they live in areas where they do not have access to DirecTV. A streaming service that would allow anyone access to “Sunday Tickets” without the added restriction of having to switch pay-TV providers to DirecTV. That could unlock product for millions of Americans who buy cable TV service that comes with broadband. DirecTV does not provide high-speed Internet service.

Amazon also has an ancillary business it wants to push to “Sunday Ticket” subscribers: an Amazon Prime membership. Amazon’s Video Strategy has long revolved around getting people to follow Prime. In his attempt to become “Everything Store, “Amazon can use live sports to connect directly with fans who are also interested in buying sports goods. Amazon has reached an agreement with the New York Yankees of Major League Baseball and Major League Soccer’s Seattle Sounders over the past year as they try to connect with audiences with Prime Video and live sports.

Amazon also hopes to expand Prime Video’s business with pending acquisition of MGM for $8.45 billion and the purchase of “Thursday Night Football” to build a growing advertising business, up 87% year-over-year in the second quarter to more than $7.9 billion. While Amazon Still Follows Digital Advertising Giants Facebook and Google in the US market, the company won 10.3% of US digital advertising dollars last year, up from 7.8% in 2019, according to a report from research firm eMarketer.

Amazon Web Services is also the technology provider of the NFL in the development of Next Gen Stats, has been analyzing and storing data on every NFL player and game since 2017. The NFL has a history of working with broadcast partners with whom it has established relationships. generation. Tournaments Broadcast deals are upgraded again with all of its existing media partners earlier this year. While Apple’s spending power rivals that of Amazon, Apple doesn’t share the same history of relationships with the NFL.

Buying live sports rights also allows Amazon to expand its business while regulators crack down on major tech acquisitions. Amazon was previously able to grow into new businesses by acquiring Whole Foods, Ring and Zappos. That path may be temporarily restricted as new FTC President Lina Khan, who has openly criticize Amazon’s growing market power and influence on the economy, check Amazon deals. How regulators view Amazon’s pending MGM deal a window into Khan’s thoughts.

–CNBC’s Jabari Young supported this story.

(Disclosure: NBCUniversal is the parent company of CNBC.)

WATCH: NFL Commissioner Roger Goodell on partnership with Verizon, “Sunday Ticket”


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