The future of NFL Sunday Ticket has been in question for (at least) four years, and we’ll finally be getting a decision about the package’s new home in the coming months.
And while a deal hasn’t been reached yet, three companies have submitted bids, according to Alex Sherman and Jessica Golden of CNBC: Amazon, Apple, and Disney. The NFL is seeking $2 billion per year for Sunday Ticket and a chunk of NFL Media. Currently, DirecTV is paying $1.5 billion per year, and this is the final season of the eight-year agreement announced in late 2014.
Speaking of DirecTV, they haven’t made a bid for Sunday Ticket this time around, meaning the package won’t be exclusive to their service. However, that doesn’t mean DirecTV won’t offer Sunday Ticket at all after the 2022 season. Per the CNBC article, the company may attempt to negotiate a deal with the winning bidder, focused around providing the service to bars and restaurants and/or acting as a residential pass-through (in short, DirecTV would still offer Sunday Ticket to its customers, but the money would end up in the pocket of the winning bidder).
DirecTV isn’t bidding on the current rights package but is willing to cut a deal with the winning buyer, two of the people said. An agreement, if reached, could lessen the financial burden for the winning streaming platform.
DirecTV is interested in maintaining a relationship with bars and restaurants. Sunday Ticket is a staple in sports bars that use the game package to bring in fans of nonlocal games, most of whom have no other way to watch their favorite team. Sunday Ticket is also popular with sports gamblers who want to see multiple games at the same time.
DirecTV would also consider acting as a residential pass-through. Under such an agreement, it could transfer all revenue for Sunday Ticket to the rights owner but still offer it to customers. This would allow DirecTV to mitigate churn while reducing switching costs for consumers. It would also backstop any potential streaming latency or reliability issues that may come with broadcasting live football over broadband.
And in other news that will interest readers and potential Sunday Ticket customers, a significant price decrease doesn’t seem possible because of contractual details in the NFL’s TV deals with CBS and Fox.
When the NFL signed contracts with CBS and Fox, the deals included language that mandates Sunday Ticket have a premium price so as not to pull too many eyeballs away from the local market Sunday afternoon games acquired by the broadcast networks, three of the people said.
That means any owner of Sunday Ticket rights won’t be able to significantly lower the price on the out-of-market package, which typically costs about $300 per year. It also prevents an existing streaming service, such as ESPN+, to simply add in Sunday Ticket at little or no extra cost to boost subscribers.
I don’t know if you could consider either of the three candidates as the favorite. While Amazon and Disney are current NFL rightsholders with established streaming services, Apple has been going in big on sports over the last year, striking deals with both MLB and MLS. Adding the NFL to their portfolio would catapult it to a new level, but at a far more significant cost than the two deals I just mentioned (MLS is getting $2.5 billion over a decade, while MLB is getting $55 million in rights fees and $30 million in advertising from Apple in each of the next seven years).
[CNBC]
