The biggest toss-up in TV
The future of television likely rests on the winner of an intense bidding war for one of the most sought-after programming packages in America: NFL Sunday Ticket.
Why it matters: The winner of this multi-billion-dollar battle between tech giants and traditional media companies will have an enormous advantage as premium sports content goes digital.
- If you're a diehard Cowboys fan living in New York, for example, it's a necessity.
- DirecTV, a satellite service that until recently was owned by AT&T, has held the rights to the Sunday Ticket package for nearly three decades.
- Its rights expire at the end of the 2022 season, which means talks are well underway between the National Football League and various TV networks and platforms that are eager to get their hands on live sports rights.
NFL games are by far the most coveted programming for any major broadcast or sports cable network, but they're not easy to come by.
- Rights are typically sold in two-to-eight year packages, and can cost more than $1 billion annually. The NFL is looking for at least $2 billion per year for rights for the Sunday Ticket package, per CNBC.
The NFL has enormous leverage to solicit big bids from both traditional media networks and tech firms that are desperate to grow their subscriber numbers.
State of play: Big Tech companies are well-positioned to be competitive buyers, given their huge market caps and enormous free cash flow.
- Amazon also has an existing relationship with the NFL, which helps it stand out from some of its Big Tech competitors. In March, it made history when it became the first streaming company to win the rights to exclusively air Thursday Night Football games.
The intrigue: The NFL may want to juice more out of a deal than just the Sunday Ticket package.
- NFL Commissioner Roger Goodell said in May that the league was exploring strategic partners to help grow its owned and operated media properties, like NFL Network, NFL RedZone and NFL.com.
- Goodell suggested to CNBC last week that the league may want to find a single partner to both buy the Sunday Ticket package and invest in those other media properties.
Be smart: Such a deal could help the league streamline viewer options on Sundays.
- Some fans watch their local team on local CBS or Fox affiliates, some watch their favorite team on DirecTV's Sunday Ticket package, and others follow their fantasy players on NFL RedZone, a commercial-free broadcast that's is available as an add-on through YouTubeTV and other services.