‘Sunday Ticket’ Bidding War Pits Tech Giants Against Disney

Apple should punt on NFL Sunday
Yinchen Niu/VIP

The new NFL season may have just begun, but the competition for the rights to the league’s “Sunday Ticket” package is intensifying quickly.

Just days after ESPN chief Jimmy Pitaro told Bloomberg that his parent company, Disney, have had exploratory talks to nab the out-of-market games, CNBC reported Amazon is the odds-on favorite. Meanwhile, Apple may still be hunting for “Sunday Ticket,” as The Information reported in July, and current rights holder DirecTV can’t be counted out, either.

But it’s hard to see how the fading satellite service can possibly hold onto “Sunday Ticket” given the tech giants that will not be easily outspent. The package currently costs DirecTV $1.5 billion a year, and VIP+ estimates the NFL would be asking for an increase of at least an additional half a billion dollars annually. The new deal would start in time for the 2023-24 season after a 27-year run at DirecTV.

It's not exactly surprising that Amazon is in the mix. Back in March, Amazon took full control of the majority of "Thursday Night Football" games — some will remain simulcast on NFL Network — as well as multicast options for traditional broadcasters’ streaming services, which VIP predicted.

"Sunday Ticket" could become the crown jewel of Amazon's Prime Video streaming service, adding to a growing roster of sports assets that include rights to New York Yankees (MLB) and Seattle Sounders (MLS) games. With Netflix continuing to signal its lack of interest in live sports, Prime Video is wise to use sports as a differentiator in the marketplace.

Disney’s determination for ESPN+ to own the out-of-town subscription packages across multiple sports is clear. ESPN+ is looking to become the sports version of Amazon Channels, with out-of-market packages for the MLS and NHL on the books, as well as be the PPV distributor for UFC and Top Rank Boxing. "Sunday Ticket" would be an expensive addition but one that could be well worth it even as a loss leader.

Spending $2 billion a year for a package that only hardcore fans would subscribe to is a big pill to swallow even for deep-pocketed Apple, which has always been a very disciplined buyer, although the company can afford not to be. The way around this would be for the acquiring service to follow VIP+’s prior suggestion and offer it at a severely discounted rate — it currently costs $294 per season — making up the difference with advanced advertising.

If Apple was unwilling to subsidize this cost, then asking fans to shell out for Apple TV+ (currently $4.99 a month) plus an additional $300-$400 for "Sunday Ticket" may not fly, especially as the Apple TV app is available only on newer smart TVs and connected devices, and so not everyone will have a device carrying it.

This bidding war will be a precursor to where most of the regular-season NFL games end up when the next renewal hits in 2033. The anticipated demise of traditional TV will be in full swing then, and while it’s possible the broadcast networks could team up to multicast one or two “games of the week," it will be tech-media hybrids ruling the roost then. The die has already been cast on that note as the NFL begins its digital transformation.

Read the full special report