National Football League commissioner Roger Goodell flew to Sun Valley, Idaho for Allen & Company’s annual media conference this summer, confident the NFL was close to announcing its latest blockbuster TV rights deal.
“We’ll probably make a decision by the fall,” he told CNBC at the time.
But nearly five months later, the league is still looking for a tech or media company willing to replace DirecTV as the rights holder for the Sunday ticket, which allows fans to watch any NFL game, not just those broadcast in their region . According to five people familiar with the talks, the negotiations are now expected to extend into next year.
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 winner is, how much they pay and how the deal is structured will have seismic repercussions across the sports, media and tech industries.
Bidding for Sunday Ticket’s valuable games package could set a precedent for how much tech companies like Apple and Google are willing to pay to poach viewers from traditional TV companies, which still rely on cable subscription fees and advertising to stay afloat .
The competitive landscape for Sunday Ticket has shifted as talks dragged on, people familiar with the talks said. Sports and media executives have long viewed Apple as the front runner, with some involved in the bidding process saying they thought the tech giant had reached an agreement.
But in the absence of a deal, Google has stepped up efforts to win the package for YouTube TV, the company’s streaming cable service, four of those people said. Other interested bidders include Amazon and Disney’s ESPN.
The Race for Dominance Streaming TV
Robert Kyncl, YouTube’s chief business officer, has played a key role in Google’s efforts. Though he will accept a new job as chief executive of Warner Music Group early next year, Mr. Kyncl is committed to working with YouTube to see the deal through, according to three people familiar with his priorities. He has a relationship with Brian Rolapp, the NFL’s chief business officer, who worked with Mr. Knycl during Google’s unsuccessful bid for Sunday Ticket in 2013.
The league’s negotiations with Apple, Google and others have dragged on as they seek to bundle the package of Sunday NFL games that are out of print with other media content, including NFL Network and the NFL RedZone channel, according to these people .
Last year, the NFL hired Goldman Sachs to review the sale of a stake in these media companies. The decision was fueled in part by the league’s realization that Sunday Ticket is competing for subscribers with the RedZone channel, which hops back and forth between live soccer games on Sundays when teams are close to scoring touchdowns.
In seeking investors for this channel and other media ventures, the NFL must negotiate how to structure a joint venture with an investment partner likely to want a voice in the joint venture’s operating structure, these people said.
A media executive who has negotiated with both Apple and the NFL gave another reason for the months-long impasse: Both sides are used to getting their way in negotiations.
the NFL, Apple, Amazon and ESPN declined to comment. Google did not comment immediately.
The league charges more than $2.5 billion annually, a $1 billion increase from the current eight-year contract, which expires at the end of this season. It is wanting a long-term partner for the rights, having locked down its marquee packages for Thursday, Sunday and Monday games with 11-year agreements last year.
The slowing economy could pose another challenge for the NFL as it seeks to finalize a deal that could surpass $10 billion over its lifetime. Tech and media companies alike are under pressure from Wall Street and investors to downsize and control spending, a reversal after years of wasteful spending.
The downturn has helped anger some Wall Street analysts over Amazon’s $1 billion-year deal for “Thursday Night Football.” Tom Forte, an analyst at DA Davidson, an investment bank, said he was skeptical the company would attract enough new Amazon Prime members or advertising revenue to cover its costs. He added that Amazon’s struggle to make money makes it highly unlikely to make a serious bid for Sunday Ticket.
“At a time when tech companies are tightening their belts, it would be shocking to see Amazon spending more on NFL rights given the challenges already in place,” Mr. Fort said.
There is similar skepticism about the viability of an ESPN bid. Rich Greenfield, an analyst at LightShed Partners, said Robert Iger’s return as chief executive made Disney, which owns 80 percent of ESPN, more likely to cut costs at ESPN or sell it. He quoted Mr Iger’s remarks at a conference hosted by Vox Media in September when he said he was “not optimistic” about certain traditional media companies.
Google, too, has faced pressure to cut costs and thin out its ranks. After reporting in October that sales on YouTube and search had slowed, Google executives pledged to halve new hires and cut spending.
But Mr. Kyncl has said completing a deal for Sunday Ticket would not be subject to the company’s austerity measures, said two people familiar with his mindset. He said it would be a good investment as it would deliver YouTube TV subscribers to match the estimated two million subscribers DirecTV credits to its current Sunday ticket deal.
Apple avoided a slowdown in its business for much of the year, but a Covid-19 outbreak at its largest iPhone factory in China has halted production and could reduce its sales over the Christmas holiday. Still, Apple’s chief executive Tim Cook has said he believes in investing during a downturn, and a decade-long deal with the NFL would fit that philosophy.
The NFL aggressively pursued Apple as a Sunday ticket partner earlier this year, in part because it had no major business ties with the tech giant, three people familiar with the talks said. But urgency faded 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 died down, the NFL focused on a separate search for an independent studio that could help produce and distribute football-related films alongside the league. NFL Films, which produces documentaries and other shows, has submitted an offer that has attracted interest from bidders including Sony, A24, North Road and Skydance, the studio that co-produced Top Gun: Maverick, according to two with the Find familiar people.
Mister. Rolapp, who led negotiations for the league, met with bidders in recent months and settled on Skydance Sports, which will partner with the NFL to develop and distribute film and television projects. One of the NFL’s greatest goals is to market the sport by reaching younger audiences and viewers outside of the United States.
Working on the deal shifted the league’s focus away from Sunday ticket talks, some of those people said. Few senior NFL leaders are involved in media negotiations, making it difficult for the league to fully engage in numerous simultaneous negotiations. With Skydance selected, the league is expected to resume Sunday ticket talks.