Amazon won Thursday Night Football streaming rights last year. Who will take them this year?

Going year-by-year for Thursday Night Football streaming rights has worked out well for the NFL so far, with Twitter paying $10 million for those rights in 2016 and Amazon boosting that to $50 million for 2017. Recode’s Kurt Wagner reports that the next TNF streaming deal is expected to cover multiple years, though, and Twitter, Amazon, YouTube and Verizon are still in the hunt for it:

Twitter, Amazon, YouTube and Verizon are the remaining bidders, according to multiple sources. Twitter paid $10 million for these digital streaming rights from the NFL in 2016; Amazon won them in 2017 for $50 million, with the latest renewal going for much more.
Verizon is an existing NFL partner and already owns some mobile streaming rights for Thursday. YouTube is the only company without a prior streaming relationship with the league, though CEO Susan Wojcicki said just this week that she would “love to stream the NFL.”It’s unclear what kind of price the NFL is looking for in 2018, though multiple sources say the league is likely to strike a multiyear deal. 

However, Wagner goes on to note that Amazon may have concerns over some proposed contract terms. That’s expanded on a little further in this Bloomberg piece:

Amazon.com Inc., YouTube and Twitter Inc. are all weighing bids for streaming rights to “Thursday Night Football,” according to people with knowledge of the matter, providing the latest evidence of technology companies’ growing interest in live sports.

The three are bidding as much as hundreds of millions of dollars for rights that will run for as long as five years, according to the people, who asked not to be identified discussing the negotiations. The National Football League is getting help in the talks from 21st Century Fox Inc., which acquired the TV rights to the games through 2022.

The NFL is looking for a technology company to offer an interactive stream with social-media commentary and statistics that entice kids raised on video games and Snapchat, the people said. Amazon already does this with the G League, a minor-league version of the National Basketball Association. The TV audience for the NFL has declined for two years in a row, slumping almost 10 percent last season alone.

Amazon bid for the rights in the initial round, but hasn’t decided whether to bid this time around due to changes in the NFL’s proposal requests, one of the people said. About 300,000 people watched games on Amazon in the most recent season.

This will be interesting to watch for a few reasons. The decline in NFL audience could have an effect, but it’s notable that an audience drop didn’t prevent the league from getting more money for the broadcast rights from Fox (five years, $550 million per season, a boost from the combined $450 million CBS and NBC were paying yearly). Part of that was to lock up the rights longer term, but part of that’s also because even low NFL ratings are looking pretty good next to other advertising opportunities, with other broadcast television shows continuing to struggle relative to live sports (especially when it comes to people watching live and seeing the commercials rather than skipping through them on DVRed shows) . So there could still be a big market for these streaming rights.

One of the criticisms of Thursday Night Football has been the quality of the matchups, and there’s been some speculation that the NFL may shoot for better matchups there now that they have this longer-term, more lucrative deal for the broadcast rights to that spot. That could make this more valuable for whichever tech company winds up with the streaming rights, and that might lead to more being paid here. But that’s one of the challenges with going for a multiyear deal here, which offers both risk and reward. If Thursday Night Football improves as a product and draws a larger audience, whatever’s paid here could be a bargain. But if NFL ratings continue to drop, and if oversaturation really starts to bite the league, this deal might not work all that well for the tech firm over the long term.

Beyond that, the discussion about changes in the NFL proposal requests is notable. Neither piece has details on just what that might be, but it’s certainly significant if it’s giving Amazon some hesitation. And that could be problematic for the NFL, as Amazon perhaps has the most incentive to spend big on these rights thanks to their ability to capitalize off multiple revenue streams.

Amazon can make money off of the Prime memberships bought to see this content and off of selling NFL-related products to those who watch the streams in addition to traditional advertising, while YouTube and Twitter aren’t retailers, and Twitter at least likely wouldn’t paywall the content (YouTube might or might not; they could roll it into YouTube Red or maybe even YouTube TV, or they could stream it to all users). Verizon does have products to sell (specifically, phone and internet services), but there isn’t quite the connection there is with Amazon, where they can show NFL-related or team-related products to people watching the stream who can then buy them with one click.

Those extra revenue streams are a big reason Amazon paid more last time around, so if they’re less interested in this round of bidding, that might drop the price the NFL gets. It’s also notable that Amazon has invested a lot of time, effort and resources into making NFL streams as lag-free as possible; if they’re starting to have some hesitation about bidding for this next round of rights, that’s probably not a great sign for the league. But Wagner’s report has Amazon still involved, as well as those other three companies. So maybe this will wind up giving the NFL a lot of money after all. Regardless of the result, it’s worth paying attention to this, as it’s likely going to say a lot about the value of sports streaming rights going forward.

[Recode]

About Andrew Bucholtz

Andrew Bucholtz is a staff writer for Awful Announcing.