It’s not unusual for the National Football League to get substantial compensation increases each time its television rights contracts are renewed. Sunday Ticket is the toughest challenge the league has faced in a long time.
Satellite TV company DirecTV, which spends $1.5 billion a year for the rights to show most Sunday afternoon football games to subscribers, has long maintained the subscription-only package. After the season of 2022-2023, that contract expires.
As it searches for a new sponsor, the league is up against some challenges. There have been changes in the NFL’s media packages in recent years that have limited the amount of Sunday games and have shown bits of live-action on its RedZone channel, which has lowered Sunday Ticket’s attractiveness. According to media executives, Sunday Ticket’s value has been negatively impacted by the rise of pay-TV cord-cutting.
The package presently has roughly 1.5 million members, down from some 2 million consumers at its height, and DirecTV has been losing about $500 million yearly on it for many years, sources familiar with the financials of the package said.
Despite this, the NFL has received inquiries from several interested parties. Apple Inc. is a company. There are reports that Apple is the frontrunner for Sunday Ticket but Amazon.com AMZN 3.58 percent is also in the running, which already has experience streaming Thursday night NFL games, according to those familiar with the situation.
There are just a few businesses who have the competence to help the NFL transition to streaming.” Lee Berke, a sports consultant, stated, “Amazon and Apple are the two big players.”
On the heels of its $2.7 billion deal to keep “Monday Night Football” on ESPN, Walt Disney Co.’s ESPN+ streaming service is also interested in Sunday Ticket.
As long as Sunday Ticket has been, the NFL has thought it has been underutilized and that a streaming option would help it thrive. People close to the NFL believe that making Sunday Ticket available to those without a satellite dish would increase its popularity. “The cable business and DirecTV, in particular, are being unjustly damaged because of Sunday Ticket,” those sources added.
Last year, the league inked multi-billion dollar long-term media agreements. The analysts stated that the NFL’s fees increased by an average of 75% to 80%.
Pat Crakes, a media consultant, and former Fox Sports executive, claimed the NFL wants to be paid between $2.5 billion and $3 billion yearly for Sunday Ticket. He opined that such a move could be a stretch, given that both Apple and Amazon have substantial financial resources but have no pressing need for the item in question.
Those familiar with the subject said ESPN is ready to pay between $1 billion and $1.5 billion for the broadcaster.
Keeping the privilege of offering Sunday Tickets to bars and restaurants, which DirecTV has enjoyed since 1994, may be a priority for DirecTV.
DirectTV is owned by AT&T and private equity company TPG under a joint ownership agreement. A year ago, DirecTV said that it had about 15 million pay-TV subscribers.
NFL wants to bundle Sunday Ticket rights with a share in its NFL Media subsidiary, which includes NFL Network and RedZone networks and the NFL.com website, which might complicate a transaction. People familiar with the NFL’s thinking say the league hired Goldman Sachs last year to find possible investors and now hopes to accomplish two goals at once with the Sunday Ticket arrangement.
The NFL Network has been affected by cord-cutting, and RedZone’s audience is limited. The NFL Network, on the other hand, only airs a few games in their entirety. According to Mr. Crakes, “NFL Media is obscuring this.”
Many in the NFL believe that although it may take longer, the potential to connect Sunday Ticket with the NFL’s other media brands is worth the wait.
Athletics have been an increasingly important focus for Apple recently. It signed a 10-year agreement worth at least $2.5 billion for the worldwide rights to Major League Soccer earlier this month. In addition, two Friday night Major League Baseball games will be broadcast live by the tech business thanks to exclusive worldwide rights. Apple’s TV+ streaming service might gain more members because of the NFL’s wide popularity.
A source familiar with Apple’s thinking said the corporation is interested in Sunday Ticket’s worldwide rights. Before, the NFL was wary of entering into worldwide licensing agreements, reasoning that having a slew of different partners would be preferable. The league, on the other hand, is open to the notion if it can be shown to make sense.
This year’s NFL+ direct-to-consumer streaming service might be used to broadcast Sunday games if the NFL doesn’t get an appealing offer. The NFL’s prior pact with Verizon Inc., which provided mobile access to in-market games, would be replaced by this new arrangement.