The NFL’s decision this week to pick Twitter as their streaming partner for Thursday Night Football is potentially a big gain for the social media service, but it surprised many observers given that Twitter wasn’t even one of the three reported finalists (Amazon, Facebook and Verizon) in early March. Things appeared to change when Facebook pulled its bid last week, though, and CNBC’s Michelle Castillo reports that Facebook and the NFL were on very different pages:
Several sources with knowledge of the NFL’s thinking said the league’s decision to partner with Twitter to stream 10 games next season may have been due to arguments with Facebook over how much its games are worth.
The sources, who spoke on condition of anonymity, said the NFL felt that Facebook undervalued content rights and has a poor monetization model. The sources added that while Facebook does have a large audience and Facebook Live’s platform is promising, its ability to get revenue from livestreaming — as well as the product’s capability — is still evolving, whereas Twitter’s product is ready for primetime.
One digital media strategist for sports leagues agreed, saying it was a widespread sports-world sentiment that Facebook video ad revenue was “a little underwhelming from what was expected.”
Castillo’s piece also notes that Facebook was the one to back out of the deal, and that they didn’t agree with the NFL on the value of non-exclusive streams for these games. She mentions that a source said Amazon backed out too and Twitter was one of the last bidders left, picking up the rights for less than $10 million according to Re/code. However, the NFL disputes this source’s account, and senior vice president Hans Schroeder claimed to Castillo that they didn’t even take the highest bid:
Hans Schroeder, senior vice president of media strategy, business development and sales for the NFL, said the deal was more about the unique opportunity to build a new audience for “Thursday Night Football,” especially among mobile users.
Schroder said the NFL opted to go with Twitter, which “wasn’t the highest bidder,” because it has a unique way to drive engagement. As for ad revenue, the NFL will allow some of its national advertisers to advertise on its Twitter livestream, and Twitter will directly handle the remnant ad space.
“There’s really a handful of folks with the size and scale that Twitter brings,” he said.
It’s perhaps not entirely surprising that Facebook wound up backing out here, considering that their focus on sports streaming to date has largely been about behind-the-scenes content, not game broadcasts. Facebook is finding plenty of success with that approach, which doesn’t require anywhere near the amount of rights fees games would. They’re also doing very well on a number of fronts, so they don’t necessarily need the NFL content to the extent Twitter does; it’s been called a potential “lifeline” for that company. Still, it’s interesting to see Facebook beaten out by Twitter here, and the reported dispute over rights value and monetization may have played a major role.