YouTube TV In Talks To Acquire NFL Sunday Ticket Rights

Media analysts considered Apple a lock months ago to acquire NFL Sunday Ticket, the right to stream every NFL game, excluding local broadcasts.

But now, YouTube TV appears to be a prospective successor to DIRECTV, which once credited the growth of its satellite company to the sports rights package.

YouTube is in advanced talks to buy the NFL Sunday Ticket package for $2.5 billion annually after 28 years on DIRECTV, according to Ken Belson and Benjamin Mullin of The New York Times. A deal could be announced as soon as tomorrow.

The price would be roughly $1 billion higher than what DIRECTV is currently paying for the package per year. YouTube may also pay the NFL beyond that, depending on how many subscribers it on boards.

Despite cord-cutting and a shift to streaming services, live sports have been a tentpole for TV distributors. Increasingly fragmented audiences mean advertisers are willing to pay a premium to have their ads on platforms where audiences cannot skip them, like live sports.

It is common for distributors to lose money on sports deals like Sunday Ticket, as has been the case with DIRECTV. DIRECTV has roughly 2 million Sunday Ticket subscribers.

Offering Sunday Ticket as an exclusive to YouTube gives subscribers a reason to choose its services over satellite and cable, and forces them to pay for YouTube’s $64.99 bundle. YouTube TV had over 5 million subscribers and trial users as of July 2022, surpassing Hulu with Live TV’s 4.1 million subscriptions.

In part, this explains Apple’s lack of interest in purchasing the rights, as they were once considered the favorite.

Reporting for The Athletic, Daniel Kaplan wrote Apple scoffed at the idea of not being able to distribute Sunday Ticket globally and may have inquired about in-market streaming rights, which are currently held by the four major broadcasters.

Apple didn’t see the logic in the deal, Dylan Byers in Puck wrote.

NFL Sunday Ticket subscribers currently bundle the package with their standard programming subscription. As DIRECTV also has carriage agreements with ESPN/ABC, NBC, CBS and FOX, subscribers have access to all NFL games on one platform, including out-of-market and local games.

That experience can be replicated on YouTube TV, as they also have carriage agreements with the “Big Four” broadcasters. Apple TV+ does not.

DIRECTV sells the rights package for about $300 per year to customers, but will often give it away for free or discount the package to entice subscribers to sign longer-term contracts, helping reduce churn.

Pay television doesn’t make a lot of profit for telecom companies, when compared to other services like broadband internet and phone. Television has historically been used by telecom companies as a carrot to attract customers to add or bundle those other services.

What’s in it for Google?

It is likely that YouTube will use the NFL Sunday Ticket package to increase its premium ad inventory, which may encourage major brands to spend more money there, as the platform’s content quality has been questioned in the past.

It might be a move that pays off in the long-run for the search ad giant.