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YouTube NFL Sunday Ticket deal is a win for traditional TV networks

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Los Angeles Chargers running back Austin Ekeler, center, runs for extra yardage while Tennessee Titans linebacker Monty Rice, left, and safety Andrew Adams (47) attempt a tackle in the course of the second half at SoFi Stadium on Sunday, Dec. 18, 2022 in Los Angeles, CA.

Allen J. Schaben | Los Angeles Times | Getty Images

The National Football League had a streaming service in mind when it was on the lookout for a latest home for the rights to its “Sunday Ticket” subscription game package. 

The league got its desired final result in a cope with Google‘s YouTube. Traditional TV networks got what they wanted out of it, too. 

Starting next season, “Sunday Ticket” will likely be offered in two ways through YouTube: either as an add-on to its YouTube TV service, a digital TV bundle that mirrors the standard pay-TV package, or a la carte through YouTube’s Primetime Channels. 

YouTube is paying about $2 billion annually for residential rights over the following seven years, CNBC reported. The method concluded this week after months of negotiations with potential winners like Apple, Amazon and Disney, which operates ESPN streaming service ESPN+.

While pricing hasn’t been determined, consumers will likely get more bang for his or her buck by subscribing to YouTubeTV and adding on “Sunday Ticket,” which shows out-of-market NFL games on Sunday afternoons. It’ll also give them access to almost all NFL games in a single place. Google’s YouTube TV bundle includes broadcast stations like CBS, Fox and NBC. Fellow tech giants Apple and Amazon don’t provide an analogous bundle offering with broadcast or pay-TV networks, equivalent to ESPN and NFL Network.

Sports, and particularly the NFL, have long been considered the glue holding the standard TV bundle together. Sports networks, and people that provide live games, attract among the highest fees from pay-TV operators, and so they rating among the highest rankings. The NFL makes large sums for the airing of live games.

Because of this, executives at longstanding broadcast and pay-TV networks, who declined to to be named because they weren’t permitted to speak publicly, found the cope with YouTube a positive final result over Apple or Amazon getting the package. 

YouTube and the NFL didn’t immediately comment.

Long live the bundle 

Paramount‘s CBS and Fox broadcast weekly Sunday afternoon games. Comcast‘s NBC is the house of “Sunday Night Football,” and Disney, which owns ESPN and ABC, holds the rights to “Monday Night Football.” 

Each has paid hefty sums for those rights. Last 12 months, collectively, the 4 agreed to pay greater than $100 billion over the course of 11-year-long packages to air NFL games. 

For networks like NBC, CBS and ESPN, they’re concurrently airing NFL games on their fledgling streaming platforms for the audience that has turned away from the pay-TV bundle. 

All of those games can be found through Google’s YouTube TV package, apart from “Thursday Night Football,” which now streams exclusively on Amazon Prime.

“YouTube in some ways is a really unique and interesting platform,” Dhruv Prasad, the NFL’s senior vp of media strategy and strategic investments, said on a call with media this week, “because now we have chosen a partner that truly supports, in some ways, our existing distribution with Sunday afternoon and night, and Monday night. We actually think this can be a model where it will lead to an actual profit with existing partners.”

While deals with traditional operators are wildly lucrative for the NFL, the league has been open about wanting more streaming partners. NFL Commissioner Roger Goodell said long before the final result of the negotiations the league saw a streaming partner as the long run of “Sunday Ticket,” which has only been offered through satellite-TV operator DirecTV since 1994. 

Although YouTube is streaming only, it offers a package that keeps the TV bundle alive – by paying similar rates as typical distributors, which has in turn caused a spike in the value of subscriptions. YouTube TV had greater than 5.3 million subscribers as of the third quarter, putting it above its competitors like Disney’s Hulu Live TV+, Fubo TV and Dish’s Sling, in response to data from MoffettNathanson. 

“It is a win for YouTube TV because it serves a bigger goal for them getting more subscribers. And ultimately, it helps a package of linear channels,” said sports media consultant Pat Crakes, noting YouTube also secured the rights “at price,” to assist them bolster their streaming service. 

Adding one other NFL property to the equation to make a TV bundle stickier with customers is a positive for networks, executives told CNBC. 

The streaming business, particularly for legacy media corporations, has most recently been under pressure. While corporations raced to form and bulk up their very own services, trailing Netflix, rabid competition is now weighing on subscriber counts, and content costs are soaring. Although streaming stays a priority, some media CEOs are rethinking how much content to remove from the standard bundle and placed on streaming. 

The bundle is dead

For some in traditional media, nonetheless, YouTube becoming the house of “Sunday Ticket” wasn’t welcome news. 

For pay-TV operators, this could lead on to more customers cutting their traditional bundles and replacing them with YouTube TV, said people near the distributors. 

Within the third quarter, cord-cutting hit all-time worst levels, in response to research firm MoffettNathanson. 

“The linear model won’t die of old age, it can as an alternative die of neglect,” analyst Craig Moffett said in a recent note. “If lynchpin content – read: marquee sports programming – is exclusively available on linear platforms, then the linear model will likely be preserved, a minimum of for a time, and a minimum of for a segment.” 

Driving customers toward YouTube TV subscriptions, or just a la carte options, only amplifies the bleeding of pay-TV customers from traditional cable and telecommunications operators, like Charter Communications, Comcast and Dish. Executives on that side of the industry had hoped for Apple to win “Sunday Ticket” rights, people near some distributors said, because it would not provide one other linear bundle option.

One positive for distributors is that while YouTube TV has broadcast and pay-TV networks that provide sports and NFL games, the streamer still doesn’t offer regional sports networks as a part of its package. For an all-around sports fan, this still makes the standard bundle a greater bet. 

Still, that would change. This week, Sinclair’s regional sports networks signed a cope with Fubo TV, putting its portfolio of networks on a digital pay-TV bundle. Such a cope with YouTube TV is probably not far behind given the recent “Sunday Ticket” package. 

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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