National Football League commissioner Roger Goodell flew to Sun Valley, Idaho, this summer for Allen & Company’s annual media conference, convinced the NFL was about to announce its latest blockbuster TV rights deal .
“We will probably have made a decision by the fall,” he told CNBC at the time.
But nearly five months later, the league is still looking for a technology or media company willing to replace DirecTV as the rights holder for Sunday Ticket, which will allow fans to watch every NFL game, not just those broadcast in their region. . Negotiations are now expected to continue into next year, according to five people familiar with the talks.
The Sunday Ticket negotiations were closely watched by analysts and executives. Live sports, especially NFL games, are one of the last remaining staples of traditional television. Who the winning bidder is, how much they pay and how the deal is structured will have major implications for the sports, media and technology industries.
Bidding on Sunday Ticket’s valuable gaming package could set a precedent for how much tech companies like Apple and Google are willing to pay to buy viewers from traditional TV companies, which still rely on cable subscriptions and advertising to stay afloat. to keep.
The competitive landscape for Sunday Ticket has changed as talks drag on, those familiar with the talks said. Sports and media executives have long regarded Apple as the front-runner, and some involved in the bidding process said they believed the tech giant had reached a deal.
But in the absence of a deal, Google has stepped up its pursuit, aiming to win the package for YouTube TV, the company’s streaming cable service, four of these people said. Other interested bidders include Amazon and Disney’s ESPN.
The race to rule streaming TV
Robert Kyncl, YouTube’s chief business officer, has played a key role in Google’s search. Although he will take up a new job as CEO of Warner Music Group early next year, Mr. Kyncl pledged to work with YouTube to close the deal, three people familiar with his priorities said. He is in a relationship with Brian Rolapp, the chief business officer of the NFL, who worked with Mr. Kyncl during Google’s failed bid for Sunday Ticket in 2013.
The league’s negotiations with Apple, Google and others have become protracted as it attempts to bundle its package of out-of-market Sunday NFL games with other media outlets, including NFL Network and the NFL RedZone channel, these folks said.
Last year, the NFL hired Goldman Sachs to help investigate selling a stock to those media companies. The decision was motivated in part by the league’s recognition that Sunday Ticket competes for subscribers with the RedZone channel, which bounces back and forth between live Sunday football games as teams score near touchdowns.
By seeking investors in that channel and other media companies, the NFL must negotiate the structure of a joint venture with an investment partner likely to want a say in the co-ownership’s corporate structure, these people said.
A media executive who has negotiated with both Apple and the NFL cited another reason for the months-long standoff: Both sides are used to getting their way in negotiations.
the NFL, Apple, Amazon and ESPN declined to comment. Google did not immediately comment.
The league requests more than $2.5 billion annually, a $1 billion increase over the current eight-year agreement, which expires at the end of this season. It wants a long-term rights partner, having closed its marquee packages for Thursday, Sunday and Monday matches last year with 11-year deals.
The slowing economy could present another challenge for the NFL as it attempts to strike a deal that could reach $10 billion over its lifetime. Both technology and media companies are under pressure from Wall Street and investors to cut staff and control spending, a reversal after years of overspending.
The downturn has helped some Wall Street analysts sour about Amazon’s $1 billion a year “Thursday Night Football” deal. Tom Forte, an analyst at DA Davidson, an investment bank, said he was skeptical the company would bring in enough new Amazon Prime members or ad revenue to cover costs. He added that Amazon’s struggle to make money meant it was highly unlikely that a serious bid would be made for Sunday Ticket.
“At a time when technology companies are tightening their belts, it would be shocking to see Amazon spending more on NFL rights given the challenges they have already faced,” said Mr. Forte.
There is similar skepticism about the viability of an ESPN bid. Rich Greenfield, an analyst at LightShed Partners, said Robert Iger’s return as CEO made Disney, which owns 80 percent of ESPN, more inclined to cut costs at ESPN or sell it. He cited Mr Iger’s comments at a conference hosted by Vox Media in September when he said he was “not optimistic” about certain traditional media companies.
Google has also faced pressure to cut costs and thin its ranks. After reporting in October that sales on YouTube and search had slowed, Google executives pledged to cut hiring in half and cut spending.
But Mr Kyncl has said closing a deal for Sunday Ticket would not be subject to the company’s belt, two people familiar with his thinking said. He has said it would be a good investment because of the YouTube TV subscribers it would bring, rivaling the estimated two million subscribers DirecTV is allocating to its current Sunday Ticket deal.
Apple avoided a slowdown in its operations for much of the year, but an outbreak of Covid-19 at its largest iPhone factory in China derailed production and could reduce sales during the Christmas holiday. Still, Apple CEO Tim Cook has said he believes in investing during a recession, and a deal with the NFL for a decade would fit that philosophy.
The NFL aggressively pursued Apple as a Sunday Ticket partner earlier this year, in part because it didn’t have major business relationships with the tech giant, three people familiar with the talks said. But the urgency cooled after the league struck a deal this fall to make Apple the presenting sponsor of the Super Bowl halftime show.
As the Sunday Ticket talks languished, the NFL focused on a separate search for an independent studio that could help produce and distribute football-related movies beyond the league. NFL Films, which makes documentaries and other shows, made a proposal that sparked interest from the likes of Sony, A24, North Road and Skydance, the studio that co-produced “Top Gun: Maverick,” according to two people familiar with the search .
Mr. Rolapp, who led negotiations for the league, met with bidders in recent months and selected Skydance Sports, which will partner with the NFL to develop and distribute film and TV projects. One of the NFL’s biggest goals is to market the sport by reaching a younger audience and viewers outside of the United States.
Working on the deal shifted the league’s focus away from Sunday Ticket talks, some of these people said. Only a few top NFL executives are involved in media negotiations, making it difficult for the league to participate fully in numerous simultaneous negotiations. With Skydance selected, the league is expected to pick up Sunday Ticket talks again.
