There’s been lots of discussion about where the NFL Sunday Ticket package may land after the DirecTV deal expires at the end of next season, with Amazon and Disney both previously discussed as key suitors. A piece from Daniel Kaplan of The Athletic Thursday added another one to that mix, claiming “sources say the NFL wants — or perhaps, better termed, hopes — Apple gets the out-of-market package.” And absolutely, there’s some logic to the NFL hoping Apple lands that bid.
In particular, Apple, unlike those other two companies, doesn’t have an existing NFL rights deal. If the league can bring yet another big company into the NFL partnership fold, and do so without sacrificing a lot of money or terms relative to bids from companies they’re already dealing with, that makes some sense for them. But Kaplan’s piece doesn’t clearly indicate that Apple’s actually going to win, and there’s a lot of time left to see who emerges with Sunday Ticket. What’s far more tangible and notable from that piece is the discussion of whoever wins possibly breaking up the Sunday Ticket monolith, and offering options for single-team or perhaps even single-game purchases rather than buying the entire out-of-market package. Here’s what Kaplan wrote on that:
[T]hat package could look a lot different structurally than the one DirecTV has shopped since its inception in 1994, charging a basic rate for all the games. Under consideration is adding choices like allowing fans to buy just one team’s out-of-market games, or perhaps even stand-alone games, sources said.
“Everything is on the table,” one source said, but nothing is set in stone.
Again, that’s pretty loose in terms of details, but it’s certainly interesting that these kinds of more limited packages are being discussed. Team and single-game out-of-market options have been available in the NBA and NHL since 2015, with those moves coming after the resolution of a class-action lawsuit against the NHL to offer a single-team package. (In the case of the NHL, that doesn’t appear to apply any more with the shift from NHL.tv to ESPN+, but the wide out-of-market package is mostly just included in ESPN+ now.) MLB has offered slightly cheaper single-team packages since 2016, also as a result of a settlement. There have been some antitrust cases to try and force this with the NFL too, but no definitive victories there so far.
The idea of selling an out-of-market team pass, or even individual games, has pros and cons for the NFL. It’s a clear win for consumers that want to pay a lesser price for more limited options rather than the current hefty price for the all-inclusive Sunday Ticket (as per Kaplan, DirecTV charges current customers $300 for the basic package, or $400 with add-ons like their RedZone Channel, but many of the current subscribers are getting the package for free as a DirecTV sign-up or renewal incentive). It’s notable that this isn’t a “All the NFL” package, but rather an out-of-market package; it doesn’t cover games in your market on your local broadcast stations (or ESPN in the case of Monday Night Football, or NFL Network/Fox/Amazon in the case of Thursday Night Football).
And with many of the most desirable games airing nationally anyway, Sunday Ticket’s main use for many is in following a specific team from a different market, or with RedZone. However, it’s notable that there’s the separate NFL Network RedZone available through many non-DirecTV providers, and also over the top for mobile devices. Some really care about getting the DirecTV RedZone Channel with Andrew Siciliano rather than the NFL Network one with Scott Hanson, but there aren’t a ton of significant differences between them. So while there would certainly be some appeal to being able to get “Just RedZone Channel,” or “Just one team and RedZone Channel,” a lot of the people who want a red zone option but not Sunday Ticket have already grabbed NFL Network RedZone.
But while there are advantages for consumers in that kind of shift to a single-team or even single-game option, part of the reason it hasn’t yet been done is that it didn’t necessarily make sense for DirecTV. Even with the massive price tags they charge, Sunday Ticket has been seen as a loss-leader and marketing expense for DirecTV, bringing people to their satellite TV service who wouldn’t subscribe to it otherwise. (And part of why much of the reporting so far has DirecTV not seen as a favorite to retain the package is that this kind of loss-leader may not make as much sense for them these days, where there’s dramatically increased cord-cutting.) And while they certainly could have gotten more Sunday Ticket subscribers with a lower price for single-team options, that wouldn’t necessarily have led to more revenue; many of the people paying for the expensive full package likely would have switched to the cheap single-team one, perhaps lowering the amount DirecTV brought in off Sunday Ticket and increasing the loss they tick on it.
And that’s going to be a discussion for whoever wins this new package. Is the best way for them to make their money back by selling a cheap single-team package to a lot of people, or selling a much more expensive comprehensive package to a smaller group of people? The answer there isn’t clear, and that’s why the quotes on this are so vague at this point. It should also be noted that there’s maybe a NFL angle to consider here; Kaplan’s piece suggests that the league has a preference (namely, Apple) in who wins, which might get them to not take the top bid financially, and they might also have preferences in how the winner distributes games.
The finances of broadcasting deals have typically been set up so that leagues don’t have a direct stake in how many people watch games or buy subscription products involving their games. That’s true for broadcast TV as well; leagues are paid $X for the rights, and the winner then tries to recoup some or all of that by selling those rights for $Y to consumers and/or advertisers, but the bid winner’s success doesn’t affect what the league gets paid. (Part of what’s interesting with the NFL comparison to the MLB, NHL and NBA out-of-market deals is that those latter platforms have usually been run by leagues themselves, while the NFL sold Sunday Ticket to DirecTV and gave them free rein. That’s part of why we’ve seen single-team options come up more quickly in those other leagues.)
So, on some level, Sunday Ticket may continue to be “It’s yours, do what you want” to the winning bidder. But there’s also a chance that the NFL is willing to take lesser money for a more favorable buyer and/or more favorable terms. And favorable terms might include a single-team package in the name of outreach to fans. (A single-team package option would certainly reduce one significant source of fan complaints to/about the NFL.)
At any rate, Kaplan’s piece makes it clear that nothing’s been decided yet, either in terms of who’s winning Sunday Ticket or in terms of how they’ll then sell it to consumers. So there’s going to be lots to watch here down the road. And it’s absolutely possible that this ends with no change in the package that’s actually available, just a change in which company is selling it. But it’s certainly notable that there’s reporting out there of league sources considering single-team options here, and that “everything is on the table” right now. We’ll see what remains on that table as these talks progress.