The NFL’s long Sunday Ticket saga is now complete, with Google securing rights to the out-of-market package.
The NFL officially announced Thursday that Google has won rights to the Sunday Ticket out-of-market package, which will be distributed as an add-on package to YouTube TV and standalone a-la-carte on YouTube Primetime Channels. The Wall Street Journal was first to report Google was on the brink of acquiring the package.
The money
The deal is worth approximately $2 billion per year for seven years. The valuation is a little short of the NFL’s target of $2.5 billion, although that could be reached once the commercial rights have been sold. Notably, the deal does not include an equity stake in NFL Media for Google. NFL Media had been shopped around by the league and includes NFL.com, NFL Network and Redzone. However, YouTube did get other auxiliary benefits such as exclusive access to NFL content and opportunities for YouTube Creators to be present at key NFL events. YouTube will also be the presenting sponsor of Back Together Saturday (the official start of training camp) and NFL Kickoff Weekend.
Since Sunday Ticket’s inception in 1994, the rights have been held by DirecTV, who most recently paid $1.5 billion annually for the package. Sunday Ticket has long been considered a loss leader, with DirecTV losing $500 million a year on the package according to a CNBC report. This has only worsened in the days of cord cutting. DirecTV had 13.5 million subscribers as of Q3 2022, down from a high of 21 million in 2017 Q1. For Google, this deal represents less than 1% of total revenue from 2021 and will likely be used to fuel YouTube TV’s growth and serve as an experiment as the company’s most significant live sports package. Currently, YouTube TV has 5 million subscribers.
The competition
Throughout the months-long negotiations, it seemed as though Apple was going to land the Sunday Ticket package. When complications and cost concerns led Apple to bowing out, the door reopened for Google and Amazon. Amazon looked like it might expand their portfolio of NFL games after a successful first season of Thursday Night Football, but Google’s potential to combine streaming, a large balance sheet and global reach with the ability to support bundled legacy TV was a major factor in landing the package per CNBC.
The deal expands the NFL’s partnership with Google, which started in 2015 with the launch of its first YouTube channel. Today, every team has their own channel and the NFL has several additional properties, such as NFL Films, with their own YouTube channel. Additionally, the NFL Network and NFL RedZone have been available to YouTube TV subscribers since 2020.
Due to the rapid decline of subscribers, DirecTV did not attempt to renew the package, although it is still interested in distributing the commercial rights to Sunday Ticket. DirecTV already handles the distribution to bars, restaurants, hotels and retailers for Thursday Night Football amidst the new Amazon deal.
What to expect
For viewers, YouTube TV operates in a similar fashion to traditional cable packages. It is a subscription streaming service that combines broadcast and cable networks into a single package. The base plan currently starts at $65. YouTube Primetime Channels is an a-la-carte streaming service where users can buy and manage any streaming subscription, similar to how Amazon Prime Channels functions. For comparison, DirecTV’s base Sunday Ticket package sold for $80 per month and a more premium package sold for $150 per month.
While the price point has not been revealed yet, Sunday Ticket will not get less expensive. Clauses in the NFL’s contracts with CBS and FOX prevent Sunday Ticket from being offered at too low of a price point that it would pull viewers from those respective networks, one of the key sticking points in the Apple breakdown. According to CNBC reporter Alex Sherman, the Sunday Ticket price will most likely rise in time given the new, larger rights deals the NFL landed last year with FOX, CBS, and NBC.
[Sources include NFL Communications 12.22, AP News 12.22, CNBC 12.22, ESPN 12.22, Sherman/Twitter 12.22]
