YouTube has closed a major deal with the NFL to stream NFL football games. The deal is reportedly worth $2 billion.
The television industry has undergone a number of changes over the last several decades. One of those changes is the overall demise of the importance of scripted television. For the longest time, it seemed that scripted television would always be a big part of the overall ecosystem. Whether it is soap operas, dramas, and various other kinds of television, money was poured into this type of television and broadcasters and producers got huge paydays afterwards.
Then along came reality TV with the flagship program, Survivor. Rather than pay for a whole cast of actors and several other expenses, you could have people voluntarily show up to be part of the show and pay out a cash prize with part of the savings that would normally go with the scripted alternative. With Survivor becoming hugely popular along with several others, television executives quickly ditched a lot of the other standard programming fair and went all in with reality TV shows. This gave rise to programs such as Pawn Stars, Trading Spaces, The Bachelor, and countless other similar knockoff programs. The end result is a complete saturation of television programming devoted to reality TV.
While executives, at least for a time, were raking in the cash with this trend, the audiences were growing less diverse. Not everyone was a huge fan of most reality TV. So, what do you watch in this situation? Well, if you are a hardcore die hard fan of watching TV all day, you end up slipping into what is likely one of two possibilities: the news or live sports.
The rise of Netflix and, subsequently, other streaming services, scripted TV was largely back, but in streaming format. The effects were obvious. Over time, people gradually started going to these streaming services. Even better is that all of this is over the internet. The industry, of course, calls this “Over The Top” services. Sure, there is reality TV on streaming services as well, but it didn’t have the same air of all reality TV all of the time. Plus, more and more people were growing more comfortable with using the internet to stream entertainment.
The result was and increased emphasis of what seemed to be the last three reasons for people to tune to TV: more reality TV, news, and sports. Of course, the internet would have something to say about news. As time went on, politicization had grown more fiercely divided. Various news organizations gradually went from being a neutral source for news and more about pumping up “their side” of the political aisle and attacking the other side. As a result, trust started sliding for large media outlets. On the other side, you had small internet startups filling the role that the major media outlets should have been providing. Competition was only growing. Because more people were turning to online news sources such as Freezenet and others, broadcast news felt the headwinds of competition (little wonder why they constantly bang the drum of how the internet can’t be trusted).
This put much more emphasis on live sports. In many ways, live sports seemed to be the last bastion for broadcasters to continue to pull in money. For broadcasters, at least for a while, live sports was never going to leave TV any time soon. What’s more, from their perspective, there was nowhere else live sports could go. After all, where is it going to go? terrestrial radio? Well, it looks like the answer to that came in the form of a rather large deal struck between the NFL and YouTube.
Reports recently surfaced that YouTube and the NFL have struck a deal to carry the Sunday Ticket for multiple years. The deal is reportedly worth an estimated $2 billion. From YouTube:
The National Football League today announced a multi-year agreement with Google granting YouTube TV and YouTube Primetime Channels the right to exclusively distribute NFL Sunday Ticket to consumers in the United States starting with the 2023 NFL season. This strategic partnership will provide fans greater access to NFL Sunday Ticket while tapping into the best of YouTube’s technology and product innovation.
“We’re excited to bring NFL Sunday Ticket to YouTube TV and YouTube Primetime Channels and usher in a new era of how fans across the United States watch and follow the NFL,” NFL Commissioner Roger Goodell said. “For a number of years we have been focused on increased digital distribution of our games and this partnership is yet another example of us looking towards the future and building the next generation of NFL fans.”
“YouTube has long been a home for football fans, whether they’re streaming live games, keeping up with their home team, or watching the best plays in highlights,” said Susan Wojcicki, CEO of YouTube. “Through this expanded partnership with the NFL, viewers will now also be able to experience the game they love in compelling and innovative ways through YouTube TV or YouTube Primetime Channels. We’re excited to continue our work with the NFL to make YouTube a great place for sports lovers everywhere.”
Starting next season, NFL Sunday Ticket will be available on two of YouTube’s growing subscription businesses as an add-on package on YouTube TV and standalone a-la-carte on YouTube Primetime Channels.
Yahoo! News notes that this isn’t the first major NFL deal for streaming services:
This marks the second major streaming deal the league has launched in as many years.
Amazon Prime Video is now the exclusive home for Thursday night games through the 2033 season. It is paying the league about $1 billion per season. Disney, ViacomCBS, Fox and Comcast are all reportedly paying more than $2 billion per season for their respective NFL deals, too.
DirecTV, which held the rights for “Sunday Ticket” since it first launched in 1994, was paying about $1.5 billion per season. DirecTV’s deal was up after the 2022 season. The league has been hunting for a new home for the service for some time after reports DirecTV was losing $500 million annually on “Sunday Ticket”. Other than Google, Apple was a favorite though talks between the NFL and Apple reportedly broke down last week.
This seems to be a follow-up deal earlier this year when Apple TV inked a deal with the MLS to carry soccer (European football) games. From TechDirt at the time:
Speaking of Major League Soccer, while it certainly isn’t the most popular sports league in America, that league is making a giant leap forward for streaming. MLS recently announced that every single one of its games, completely sans any blackout rules, will be streaming on Apple TV for the next decade.
Apple claims that viewers “around the world” can “watch all MLS, Leagues Cup, and select MLS NEXT Pro and MLS NEXT matches in one place—without any local broadcast blackouts or the need for a traditional pay TV bundle.”
This will all be part of a “new MLS streaming service” that will become available in early 2023, with matches offered up through 2032. It will offer both live and on-demand video.
Now, is this going to make cable companies nervous? If they have a couple of brain cells to rub together, yes! Again, MLS is not the NFL, MLB, or the NBA. Or even the NHL. But it’s not some fly by night league, either, and this is a major move into the streaming market. And the real thing that’s going to keep cable company executives up at night should be the potential that MLS has any serious success with this move. If viewership in the league jumps as a result of this sudden new availability to stream games, you can bet other, larger leagues are going to take note.
As predicted for some time now. The dam that is live sports may finally be starting to break, with this MLS deal being the first crack. If other leagues follow suit in any reasonable timeframe — say, in the next 5-10 years — cord cutting is going to become a tidal wave.
It appears with this latest deal, Timothy Geigner didn’t even have to wait 10 months for this latest announcement, let alone 10 years.
Traditional broadcast TV has pushed hard to not innovate for years. Instead, they often chose to believe this whole internet thing is just a fad that would eventually go away on its own at some point. It wasn’t until recently that they started looking towards trying to offer something online, though the offerings have been receiving mixed reception at most. The latest move is only going to add pressure for other sports leagues to eventually follow suit – especially if these deals prove to be highly lucrative. For the broadcasters, this is probably serving as the latest warning shot that broadcasters can’t exactly sit comfortably by and just expect the leagues to constantly make them exclusive broadcast rights holders forever.
Only time will tell how big of an industry shake-up this truly will be in the end. If it goes well, these sports deals could truly by a turning point for broadcasters who thought their reign as the biggest entertainment destination would live forever.
Drew Wilson on Twitter: @icecube85 and Facebook.
