Amazon is in talks with the NFL to acquire its NFL Sunday Ticket games package and is seen as the frontrunner to pay the pro football league as much as $2.5 billion a season to do so, according to a CNBC report.
Satellite pay TV operator DirecTV has controlled Sunday Ticket rights since their inception 27 years ago. But the operator, recently spun off by AT&T in a joint venture with private equity firm TPG, loses money on the current deal that calls for it to pay around $1.5 billion per season.
It was just disclosed in SEC documents this week that AT&T paid DirecTV $2.1 billion to cover those losses, and it doesn't seem likely that DirecTV has the will or resources to incur even greater losses going forward.
The National Football League is probably OK with this, given DirecTV‘s fast-declining subscriber base, which reduces the pool of consumers willing to pay $300 a season for all out-of-market NFL regular season games.
And given that DirecTV only provides Sunday Ticket to nonsubscribers who can't get its signals, a partner like Amazon might provide more room to grow the platform.
Indeed, NFL Commissioner Roger Goodell even told CNBC that Sunday Ticket might be “more attractive on a digital platform.”
Earlier this year, Amazon already agreed to exclusively license the NFL‘s Thursday Night Football franchise in a deal that kicks in at the start of the 2022 pro football season.
With its $1.76 trillion market capitalization, Amazon wouldn‘t suffer as it develops myriad ways to monetize the pricey Sunday Ticket, but it does have competition for the asset. Namely, Disney's ESPN is also reportedly in talks to license the franchise.
Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. His reliable mid-range jump shot, deft ambidextrous post-up game and tough interior defense have been criminally overlooked.
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