Yahoo, Verizon, AT&T Want NFL Thursday Streaming Rights

Denver Broncos fans watch Super Bowl 50

Denver Broncos fans watch Super Bowl 50 at It's Brothers, a bar in Denver, Feb, 7.

Photographer: Dustin Bradford/Getty Images
  • National Football League has targeted tech, telecom partners
  • Traditional broadcasters uninterested in paying extra

Though last night’s Super Bowl was widely available online -- commercials included -- the vast majority of Americans watched the broadcast just as CBS Corp. intended: on a big-screen TV.

QuickTake NFL, America’s Soapbox

In five years, though, that may not be true. Aware that a growing number of viewers are canceling pay-TV, signing up for fewer channels or streaming video over the Internet, the National Football League is courting technology and telecommunications companies eager to convert the would-be cord-cutters.

As an early step, the league has been shopping the streaming rights for "Thursday Night Football," holding conversations with Apple Inc., Amazon.com Inc., Yahoo! Inc., Facebook Inc., Verizon Communications Inc. and AT&T Inc.

Some of those companies balked at the high price tag, according to people familiar with the companies’ plans, but AT&T, Yahoo, and Verizon are expected to bid. Yahoo live-streamed the NFL’s London game last year, and Verizon’s wireless customers can currently stream live football games on their smartphones (but not most tablets).

The NFL and and the companies declined to comment on the record.

The NFL isn’t looking for a long-term relationship, said the people, who asked not to be identified because the talks are private. The league wants to use the next few years to experiment with different kinds of media, distribution models and technologies. By the time the NFL’s biggest broadcast contracts expire in 2021, it will be prepared to sell a broad array of digital rights -- and make more money.

Real-Time Viewers

If a tech or telecommunications company is able to strike a deal to live-stream top-notch football games, it would be a blow to the traditional broadcast and cable companies. Live sports is one of the few types of programming that draws viewers in real time, as opposed to watching on a DVR, meaning it’s easier to make them sit through commercials. This is why ESPN’s per-subscriber fees are so high, and also why the networks are willing to pay so much for sports rights.

Meanwhile, any tech company looking to convince more people to ditch their cable subscriptions will have a hard time without football, and NFL games don’t come cheap. The league commands the highest per-game price for any sport on American TV. In the most recent broadcast deal, CBS and NBC each paid about $45 million per game for five Thursday night games for the 2016 and 2017 seasons. Yahoo paid $17 million to stream the 2015 London game, which was played at 9:30 a.m. New York time and broadcast on network TV in the teams’ home markets. 

The high prices turned off at least one of the NFL’s potential partners in the most recent round of conversations, according to people familiar with the talks. Apple and Google’s YouTube aren’t expected to be serious bidders for digital rights to Thursday games right now, people familiar with the matter said. Traditional partners CBS and NBC aren’t interested in paying additional fees for their own TV broadcasts, the people said.

Complicated Structure

Because the potential partners include a mix of media companies and platforms, the pricing and structure could quickly get complicated. As a preview, consider this year, when CBS made the Super Bowl available online on any device bigger than seven inches. Anything smaller, which includes smartphones and the very tiniest tablets, is the sole domain of Verizon, per its deal with the league.

The NFL has been willing to take a nose-to-tail approach toward its product, making thin slices that appeal to different audiences and work on non-traditional platforms. In addition to the live-streams on Verizon and Yahoo, the league has sold rights for its video clips to Twitter, Alphabet Inc.’s YouTube and Facebook.

This year, conversations between the NFL and potential streaming partners are still in the early stages, the people said. A decision isn’t expected for at least a few weeks.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE