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

The National Football League had the streaming service in mind when it looked for a new home for the rights to its Sunday Ticket subscription game package.

The League achieved its desired outcome under the agreement Googleon YouTube. Traditional TV networks also got what they wanted from him.

Starting next season, The Sunday Ticket will be offered on YouTube in two ways: as an add-on to the YouTube TV service, as a digital TV bundle featuring a traditional pay-TV package, or a la carte via YouTube Primetime channels. .

YouTube will pay about $2 billion annually for residential rights over the next seven years, according to CNBC. The process ended this week after months of negotiations with potential winners including Apple, Amazon and Disney, which operates ESPN’s streaming service ESPN+.

While no pricing has been set, consumers can make the most by subscribing to YouTubeTV and adding “Sunday Pass,” which shows out-of-market NFL games on Sunday afternoons. It also gives them access to almost all NFL games in one place. Google’s YouTube TV collection includes broadcast stations such as CBS, Fox and NBC. Tech giants Apple and Amazon don’t offer a similar bundle with broadcast or pay TV networks like ESPN and the NFL Network.

Sports, especially the NFL, have long been considered the glue that holds the traditional television set together. Sports networks and those offering live games receive the highest fees from pay TV operators and have the highest ratings. The NFL makes a huge amount of money to broadcast live games.

For that reason, the executives of the longtime broadcast and pay-TV networks, who declined to be named because they were not authorized to speak publicly, saw a deal with YouTube as a more favorable outcome than getting a package from Apple or Amazon.

YouTube and the NFL did not immediately comment.

The most important‘s CBS and Fox shows weekly Sunday afternoon games. Comcast‘s NBC is the home of “Sunday Night Football” and DisneyESPN and ABC own the rights to Monday Night Football.

Each paid a hefty sum for these rights. Last year, the four agreed to pay more than $100 billion over an 11-year package to broadcast NFL games.

For networks like NBC, CBS and ESPN, they will simulcast NFL games on their new streaming platforms for audiences who have opted out of pay TV packages.

All of these games are available through Google’s YouTube TV package, except for Thursday Night Football, which is currently only available on Amazon Prime.

“YouTube is a very unique and exciting platform in many ways,” NFL senior vice president of media strategy and strategic investments Dhruv Prasad said at a media briefing this week, “because we’ve chosen a partner that really supports it. in many ways, our existing broadcast on Sunday afternoon and night and Monday night. We really think it’s a model that will bring real benefits with existing partners.”

While deals with traditional operators have been very lucrative for the NFL, the league has been open about wanting more streaming partners. NFL Commissioner Roger Goodell said before the outcome of the negotiations that the league saw a streaming partner as the future of “Sunday Ticket,” which has been offered exclusively through the satellite television company DirecTV since 1994.

Even though YouTube is streaming only, it offers a package that keeps the TV collection alive by paying the same rates as conventional distributors, which in turn has caused subscription prices to skyrocket. According to MoffettNathanson, YouTube TV gained more than 5.3 million subscribers in the third quarter, putting it ahead of competitors such as Disney’s Hulu Live TV+, Fubo TV and Dish’s Sling.

“It’s a win for YouTube TV because it serves a great purpose to grow subscribers. After all, it helps the network’s channel package,” said sports media consultant Pat Craiks, who said YouTube also secured the rights “at the same time.” A good price to help improve their streaming service.”

Adding another NFL property to the equation to make the TV package stick with consumers is a positive for the networks, executives told CNBC.

The streaming business has come under pressure lately, especially for legacy media companies. Companies are left behind as they race to build and scale their services Netflix, fierce competition is now affecting subscriber numbers and content costs are skyrocketing. While streaming remains a priority, some media CEOs are rethinking how much content to ditch and stream from the traditional stack.

For some traditional media outlets, YouTube’s move to become the home of The Sunday Ticket was bad news.

For pay-TV operators, this could lead to many customers cutting their traditional packages and switching to YouTube TV, people close to the distributors said.

Cord-cutting hit an all-time low in the third quarter, according to research firm MoffettNathanson.

“The linear model will not die of old age, but rather of indifference,” analyst Craig Moffett said in a recent note. “If the lynchpin content – ​​read: marquee sports programming – is available only on linear platforms, then the linear model will survive, at least for a while and at least for the segment.

Pushing customers toward YouTube TV subscriptions or simply a la carte options is exacerbating the hemorrhaging of pay-TV customers from traditional cable and telecom operators like Charter Communications, Comcast and Dish. Executives on the left side of the industry had hoped to win the rights to Apple’s “Sunday Ticket,” said some people close to the distributor, because it offered no other linear bundle option.

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

However, this may change. This week, Sinclair’s regional sports networks signed a deal with Fubo TV, bringing its portfolio of networks into a digital pay-TV package. A similar deal with YouTube TV may not be far behind, given the recent “Sunday Ticket” package.

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