YouTube will pay an average price of roughly $2 billion a year to secure rights to the NFL Sunday Ticket franchise, people familiar with the deal said, the latest sign that the migration of sports from traditional television to streaming is chugging ahead, reports The Wall Street Journal.
The deal cements YouTube, a division of Alphabet Inc.’s Google, as a rising force in streaming online and on television sets. The business, which began as a website serving user-generated clips with little curation, now also sells the cable bundles and prime sports programming that it once set out to supplant.
Sunday Ticket is a subscription-only package that allows customers access to all Sunday afternoon games for out-of-market teams. DirecTV currently pays the National Football League an average fee of $1.5 billion per season for both residential and commercial rights.
YouTube is licensing the residential rights for seven years, the people said. Those rights are valued at roughly $2 billion per season and could increase if certain benchmarks are reached, the people said. The NFL will also seek to license the commercial rights for bars and restaurants for an additional $200 million, the people said.
YouTube has more than two billion monthly users and at least five million subscribers and trial accounts for YouTube TV, its online cable bundle. The video platform has been hit by a slowing advertising market. Its ad revenue fell 1.9% in the latest quarter, the first time sales declined year-over-year since Alphabet began reporting the unit’s performance in 2020.
Current rights holder DirecTV has about 13.5 million subscribers. However, like all other cable and satellite providers, it has been hard hit by cord-cutting as more consumers embrace streaming. Five years ago DirecTV had more than 20 million customers.
YouTube will offer Sunday Ticket as an add-on to YouTube TV and in the video platform’s main app through a service called Primetime Channels that allows viewers to subscribe to individual channels.
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