It’s one of the crown jewels in sports streaming rights and the latest sign that, even for live sports, streaming — and thus not linear TV — is the future. Despite other tech behemoths like Apple and Amazon both circling (an individual with knowledge told IndieWire the Google deal was for seven years and is in the range of the previously reported $2 billion+ annual asking price the NFL sought for Sunday Ticket), YouTube is the destination that made the most sense for the popular package.
“Sunday Ticket is definitely the golden prize in sports streaming. It draws more than anything else…It does it in a way that follows the sort of migratory patterns that sports fans are increasingly following today,” Rachel Nichols, a sports broadcaster with Showtime and a longtime host at ESPN, told IndieWire. “The fact that YouTube got it says a lot about where they stand.”
In Sunday Ticket, which allows fans to watch every out-of-network football game on Sunday afternoons, YouTube wins a huge influx of eyeballs that can bolster both YouTube TV as an add-on package and its newly launched subscription business Primetime Channels as soon as the 2023 NFL season kicks off. DirecTV, which has held the rights since 1994 in a deal that expires after the 2022 season, has 1.5 million subscribers to Sunday Ticket paying at least $300 a year. It’s long been a key differentiator in the pay-TV battle, but parent company AT&T, as far back as 2019, felt the subscription’s value to the service had peaked as more people cut the cord.
As analyst Bruce Leichtman of Leichtman Research explains, the marriage between DirecTV and the NFL was never about subscribers but about exclusivity. For years, NFL Sunday Ticket never climbed above 2 million subscribers, and DirecTV called it a “zero margin” product. Even though a shift to YouTube will, in theory, make Sunday Ticket more accessible, Leichtman doesn’t expect Sunday Ticket to become much more than a niche subscription suddenly growing to tens of millions of subscribers. But that won’t stop YouTube from reaping the benefits.
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“Sunday Ticket is image more than it is revenue. It helped differentiate DirecTV from Dish. It was the sexy product. It was the sports product, even though under 10 percent of their subscribers ever got it,” Leichtman said. “They can spend something like this as a bit of an experiment to see what it does for YouTube and see how it distinguishes YouTube TV, if that is the goal.”
While analysts who spoke to IndieWire agree the NFL ultimately sided with Google because it was willing to pay what the NFL wanted, there are perks YouTube can offer that Apple and Amazon cannot.
For starters, Apple and Amazon do not have the large-scale, live, linear service that YouTube does. Leichtman explains the others would offer Sunday Ticket as an a la carte product rather than build upon the established base of 5 million YouTube TV subscribers. But because Google has its own pay TV service, it’s less likely to disrupt the NFL’s existing relationships with broadcast TV that still bring in the most money. That’s because if a consumer doesn’t have access to the in-market game via Sunday Ticket, YouTube TV users can still switch over to their local CBS, Fox or NBC affiliate.
NFL also extended its carriage agreement with YouTube TV for NFL Network and NFL RedZone, the latter of which is a good alternative for the displaced fans and fantasy football junkies who don’t necessarily need every minute of every game that Sunday Ticket provides. And despite some prior reports that this deal could also include rights to a stake in other NFL media, this is a traditional license deal, but the individual added talks and exploration involving NFL media is ongoing.
YouTube TV has the added perk of allowing viewers to comment in real-time, something that’s been a nifty feature when MLB games stream for free via YouTube.
“Interactivity in TV, especially live content, is becoming very popular,” Elizabeth Parks, president and CMO of Parks Associates, told IndieWire. “Many video viewers now have tried co-viewing, and there will be a substantial increase in the interaction specific to leagues, players, specific teams — all of this drives additional revenue streams and partnerships.”
But the NFL is likely thinking about the long game as well, and diversifying beyond Amazon as a streaming partner doesn’t hurt. Paul Erickson, a principal with Erickson Strategy, says that while YouTube TV isn’t considered a major player, Google, YouTube, and Android operating systems have a reach that no entertainment company can match. The announcement also revealed that the NFL will give access to top YouTube creators, and YouTube will be a presenting sponsor on two NFL original series.
“It also allows Sunday Ticket that premium ticket proposition to reach an incredibly broader opportunity. It’s a near-term deal, but with many long-term strategy benefits,” Erickson said. “If we really want to expand that audience, really expand how many eyeballs…that is a huge amount of bang for the buck to wind up with Google, advertising, streaming properties, all the devices they’re on in some way.”
Brent Lawton, the NFL’s VP, Media Strategy and Business Development, was made available to press on Thursday and said that the NFL already has 10 million subscribers on its YouTube channel and expects that with YouTube’s massive reach that having Sunday Ticket available will continue to drive awareness to their brand. YouTube’s younger skewing demographic didn’t hurt either, and Lawton says the NFL’s decision was based on which platform would be the most fan-friendly and accessible based on where their fans already are.
One wrinkle that’s still unsettled are the commercial subscribers to Sunday Ticket, namely the bars and restaurants of the world. Lawton told IndieWire those rights have a separate process from the ones YouTube acquired, though YouTube is involved in the conversations about how to continue servicing those subscribers. That base of subscribers is significant, as Leichtman said commercial subscribers were as many as a third of DirecTV’s Sunday Ticket users, and that group even provided more revenue to DirecTV than the Average Joes. Leichtman feels if a deal were worked out, it could also be an untapped opportunity for Google to get into commercial accounts.
Leichtman is also “perplexed” by the detail that Google will offer Sunday Ticket as an add-on via YouTube TV as well as a la carte via its Premium Channels offering. No pricing details about either offering were unveiled with the announcement, and pricing will be up to YouTube rather than the NFL. While Leichtman says it could cause some confusion for consumers in the short term, as Sunday Ticket has traditionally always been tethered to a DirecTV account, Lawton said offering it in both ways was done to make sure “that Sunday Ticket is as available as possible.” Those who have pay TV will have access to every NFL game, but Lawton acknowledged not every user is going to switch to a vMVPD.
“There’s a path for them,” Lawton said. “If you want to keep what you’re doing and stick to linear, there’s a path for you there too. We’re trying to make it as accommodating and broad base as possible.”
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For what it’s worth, Apple TV+ got as close as the 1-yard line before finally punting. Apple had long been reported to be the frontrunner to land Sunday Ticket, but Puck first reported last week that it ended negotiations, opening the door for Google to swoop in. What Apple would’ve gotten from Sunday Ticket is not the same as its deal with Major League Soccer, a $2.5 billion deal that nets exclusive rights to all MLS games that can be accessed internationally and offered on top of an Apple TV+ subscription. In that sense, Leichtman says there’s a chance it could even have been the NFL that balked.
“It’s not imperative for the NFL how many people subscribe to this,” Leichtman said. “They make more money from their broadcast cable relationships, they’re trying to create a win-win relationship, and perhaps some of the things they wanted, Apple couldn’t do.”
Ultimately, the streaming and sports arms race is getting ugly, and no one wants to be left behind. Amazon has its own billion-dollar deal for exclusive Thursday Night Football rights, and Apple has MLS and exclusive Friday night MLB games. The NBA will be the next big package deal on the block, and Disney/ESPN and Warner Bros. Discovery/TNT aren’t eager to lose basketball to a tech giant. Ted Sarandos recently clarified that Netflix is not “anti-sports” and would be interested if it could own the streaming rights to a league rather than just rent them. And a rumor recently linked Amazon to the Pac 12 after ESPN minted a deal with the Big 12.
That leaves YouTube and the NFL, which is the furthest thing from a consolation prize. But what both parties realize is that giving younger viewers access to more live games without added hoops to jump through will be key to keeping fans engaged.
“Anyone under 30, when you ask them about their favorites in sports, they’re almost always players outside of their home market,” Nichols said. “People follow players wherever they go. The same thing happens in football with Tom Brady…Sunday Ticket is the only way you can do that.”