NFL-Apple Sunday Ticket Talks Threaten to Stretch Into New Year
NFL commissioner Roger Goodell on Wednesday gave a brief update on the state of the Sunday Ticket package, saying that negotiations are at “a very critical point for us,” before effectively walking back previous estimates of when a deal might get done. “Our decisions are not based on timelines,” Goodell said in the wake of the Dec. 14 league meeting in Irving, Texas. “They’re based on getting the best outcome with the best party.”
Back in July, Goodell acknowledged that the out-of-market games package, which has been exclusive to DirecTV since its launch in 1994, was heading for a streaming service, and that a deal was expected to be in place “by the fall.” Those remarks, which Goodell made during an interview at the Allen & Co. Sun Valley conference, came a full three months after reports began circulating that Apple had won the bid outright. It’s a done deal, the digerati whooped, Apple’s all but signed the papers.
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(While that spring bulletin included a CYA clause in which Apple was said to be keeping the official announcement under wraps until a later, unspecified date, eight months is an awfully long time to sit on news of a deal said to be worth more than $2.5 billion per year. Tim Cook’s crew may be notoriously buttoned-up, but they’re not Trappist monks.)
With three inches of snow projected for Saturday’s Dolphins-Bills game and just a handful of days to go before the solstice arrives, it’s become apparent that Goodell’s earlier prediction about an autumn resolution isn’t likely to pan out. The glacial pace of the negotiations—Sunday Ticket has been in play for the better part of the last two years—has been exacerbated by the pertinacity of the NFL and its lead suitor. Forget the old saw about the irresistible force rendezvousing with the immovable object; the NFL-Apple talks are a standoff between two parties that have never heard the word “no.” Imagine Oprah negotiating with the Yakuza over some beachfront property in Malibu and you’re maybe halfway there.
As the eyedrops-depleting stare-down threatens to bleed into 2023, here’s where things stand on the Sunday Ticket front:
1. Apple is still expected to walk away with this thing, although the issues preventing a tidy resolution are far from insignificant. With its $2.2 trillion market cap, money is no object for the gizmo manufacturer, although the talks are said to have been complicated by the amount of cash Apple’s customers may be expected to throw down for a macOS-based Sunday Ticket product. In a bid to drive subscribers to its Apple TV+ platform, which is a relative steal at $6.99 per month, the tech giant is said to be fixated on offering Sunday Ticket via its streaming service at no additional charge. That’s a far too magnanimous gesture for the NFL; it needs to protect the interests of its Sunday afternoon broadcast partners at CBS and Fox, which under the terms of the 2021 rights renewal will pay the league a combined $40 billion through the end of the 2033 season.
2. Disney’s interest in Sunday Ticket hasn’t flagged, although the league appears to have shelved any notions of carving out an ESPN+ package. Last month, ESPN chairman Jimmy Pitaro said while his team has “made it clear to the NFL that we value that product,” the talks had hit an impasse. “We are not currently engaged with them,” Pitaro said. “The ball is in their court, and they have to decide what their priorities are and where they want to go with it.”
3. Amazon hasn’t dropped out of the hunt, but its pricey stewardship of Thursday Night Football doesn’t bode well for another mega-billion-dollar investment with the league. Per Nielsen, Amazon’s first 12 TNF games averaged 9.62 million viewers, which marks a 25% drop compared to the year-ago deliveries across Fox and NFL Network. While its demo ratings are to die for—23% of TNF viewers are members of the 18-34 set, and the median age of the audience is currently 47 years old, a good seven years younger than the NFL’s linear-TV base—the overall reach may not justify Amazon’s $11 billion rights fee. Jeff Bezos & Co. are forking over some $66.7 million per game for a package that includes such low-impact matchups as the Nov. 10 Falcons-Panthers outing; with an average draw of 6.8 million viewers, the cost of reaching each of those Nielsen-verified fans works out to about $9.81 per stream.
4. While Google has entered the proverbial chat, some media observers believe that the YouTube owner is a long shot. YouTube’s bread and butter is short-form video; if the site’s users were a sovereign nation, they’d be Russia—hundreds of millions of people spread out a half-inch deep over 6.6 million square miles of turf. Plopping down a couple billion dollars a year on NFL games when nearly half of the traffic is driven by two-to-three-minute videos is an effective way to set money on fire, although clearly Google has plenty of cash to burn. (One expert suggests that the NFL’s unwillingness to budge on international rights—among other things—is likely to take a lot of air out of the winning bid, bringing the annual fee closer to the $1.5 billion that DirecTV is paying for its final year of Sunday Ticket action than the shoot-the-moon figure the league initially hoped to command.)
5. Whoever wins this thing is going to have to get comfortable with the idea of hemorrhaging money—although that’s one of the reasons why Big Tech is such a perfect fit for this bespoke rights package. DirecTV keeps its Sunday Ticket subscriber count close to the vest, but insiders estimate that fewer than 1.2 million customers buy into the legacy service each season. As the price of a full-season Sunday Ticket pass is just under $300, it’s clear that DirecTV isn’t getting much of a return on its investment. (Estimates for the flagship product do not include the subs who pay nearly $400 per year for the streaming Sunday Ticket Max package.) While Sunday Ticket was once an invaluable differentiator for DirecTV’s satellite service, the company in the first nine months of 2022 lost 1.38 million video subs, and its overall base has been whittled down to 13.5 million customers—an 18-year low.
In a statement filed with the Securities and Exchange Commission in September 2021, former DirecTV owner AT&T said it would pay up to $2.1 billion in losses stemming from the Sunday Ticket contract as part of its $15 billion spinoff of the asset. The Sunday Ticket rights deal expires at the end of this NFL season. While DirecTV won’t renew its contract with the league, it may look to sublicense a rights package to bars and restaurants, as it currently does for Amazon’s TNF package.
As the NFL-Apple staring contest continues, there is no telling when the two sides will finally strike a deal. In an ideal world, Super Bowl LVII would serve as a dandy backdrop for the proclamation of a new Sunday Ticket partnership, but as any Houston Texans fan will tell you, life is pretty far from idyllic. In the meantime, DirecTV has four weeks remaining on its 29-year association with the NFL, while Sunday Ticket enthusiasts will have at least 10 months to prepare for the inevitable arrival of the macOS Spinning Pinwheel of Death.
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