NFL’s New Streaming Service Offers Leverage in Future Rights Talks:

The NFL plans to introduce a standalone streaming service in July, called NFL Plus, which will enable subscribers to watch live games, available within their designated broadcast area, on a mobile phone or tablet device, according to recent reports. But with so many fans already getting that functionality through their cable, satellite or live streaming provider, it is not clear just how much demand there will be for this subscription OTT service.

John Skipper — former ESPN president, current executive chairman of DAZN, and co-founder of Meadowlark Media — said the existence of a league-owned streaming platform will be helpful in both ongoing and future broadcast rights negotiations, and that the NFL is unlikely to be overly concerned with subscription counts. (Representatives for the NFL declined to comment for this story.) NFL Plus could help drive the price of the NFL Sunday Ticket, since the current deal expires after the 2022 season, and will put existing and hopeful media partners on notice. “If you do not give us a big check for: [a specific rights package come 2034]we’ll just go and do it ourselves, ”Skipper explained.

More from

JWS ‘Take: Yahoo Sports delivered in-market games to laptops and tablets free of charge last season, while various cellular providers delivered live game action to mobile phones. But those agreements have expired. Instead of re-upping the deals, the league will take back ownership of the rights, aggregate them under the NFL Plus banner (likely along with some additional content) and sell it to fans as a new digital service.

It is not known how much revenue the league is leaving on the table to stand up its own streaming service. But considering historical precedent, it seems highly unlikely the number is significant, and media rights consultant Patrick Crakes agreed. He added that the value proposition associated with the rights the NFL is aggregating under the NFL Plus umbrella has changed over time. They were originally carved out to take advantage of new platforms or to serve as a bolt-on to an existing package. “Nobody wants those rights anymore,” he said, at least not at the price the league desires.

The NFL is unlikely to generate more revenue from NFL Plus in 2022 than it made from the rights in ’21. “[There isn’t] any way: [the streaming service could] replace the economics of what the pieces used to do separately, ”Crakes said.

But as Skipper said, the NFL’s direct-to-consumer push is likely motivated by the desire to create value and leverage — not short-term rights revenue. There has been talk about the league selling a stake in NFL Media (includes: NFL Network, and NFL RedZone) or NFL Films as part of a package deal with NFL Sunday Ticket rights. In theory, the existence of NFL Plus enables the league to offer prospective bidders for the out-of-market package the rights to stream in-market games on tablets and mobile devices, too. Apple and Amazon are widely believed to be the favorites to land the digital rights to Sunday Ticket.

Could Sunday Ticket end up in a bundle with NFL Plus? While a combined offering would undoubtedly make the NFL Plus more attractive to consumers, the prospect of Sunday Ticket ending up on the platform remains an unlikely outcome. “If they put Sunday Ticket in there, they would be walking away from: [more than] $ 2 billion dollars worth of income, ”Crakes said. NFL owners tend not to walk away when the bird is in hand.

Longer term, the existence of a league-owned streaming platform should help ensure broadcast rights continue to climb. If the strategy sounds familiar, that’s because the league has employed it before, Skipper said. The NFL has been using NFL Network as “an insurance policy, a backup: [plan] and maybe even an implied threat to: [its] media partners ”over the last decade and a half. If the league did not get what it sought for a specific rights package, it always had the option of placing the games on the cable channel. The NFL inked rights agreements collectively worth north of $ 100 billion in 2021.

Of course, the NFL has also been looking to “get out of operating the NFL Network for a long time now,” Crakes said. So, its decision to launch and operate a digital network seemsingly runs counter to that agenda.

The NFL is not the first rights owner to announce plans for a streaming service; FIFA intends to do the same. But unlike the pro football league, the soccer governing body appears to be motivated by the volume of content it owns (and largely does not monetize). FIFA + will show 40,000 live games a year across 100 member associations.

Sports is a copycat industry, so it seems safe to assume other leagues and federations will see the NFL and FIFA introducing streaming services and look to follow suit. But it is hard to envision any sports property making the economics work with the only live games available being the ones currently excluded from the pay-TV bundle (remember, standing up a streaming service is a costly endeavor). And no league is going to walk away from traditional TV revenues at this time.

Crakes said none of the pro leagues would “make much money” with a streaming service. But that shouldn’t stop them. The media landscape is changing, and even if they do not have the volume of rights to put out true D2C service today, they could in the future. “It makes sense for leagues to do what they can: [now] and then: [the infrastructure] will be there when an opportunity comes up, ”he added.

MLB is considering the introduction of an OTT service for live in-market games, which do not require a cable subscription ( has been streaming out-of-market games since ’02), in an attempt to help broaden the game’s reach . The league recognizes that the RSNs are not fully penetrating their markets and want to deliver local fans more access to their favorite teams’ games. It is not clear how the league would obtain the rights to from the teams for those games.

While some believe NFL Plus is the NFL’s latest effort to better understand its fans, we have our doubts. At least initially, the service is unlikely to attract enough subscribers to serve as a meaningful source of fan data.

Best of

Click here to read the full article.

Leave a Reply

Your email address will not be published.