Earlier this week there were reports that Apple (AAPL) has ended negotiations with the NFL over the sports league's Sunday Ticket games package. Now there is a report that Google's YouTube is the front runner to close the deal.
Negotiations for the rights to the streaming package, which features the NFL's full slate of day and afternoon games on Sundays, have been ongoing throughout 2022 as the league's current deal with DirecTV is set to expire at the end of the season.
The league had previously expressed hope that negotiations would wrap up by the end of the year, but there has been recent speculation that they could drag on into 2023.
But with Apple reportedly stepping down from negotiations, Alphabet (GOOGL) and its YouTube subsidiary are now in the catbird seat, according to a new Wall Street Journal report.
The NFL and YouTube are reportedly in advanced talks for the exclusive rights to Sunday Ticket. If a deal is struck, NFL games could be available for streaming on YouTube TV and YouTube Primetime Channels.
The NFL is looking for the buyer willing to pay more than $2 billion annually for the rights to Sunday Ticket, which is the package that features all of the league's regional broadcasts on Sundays, according to CNBC.
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The Future of Sports Broadcasting
The legacy media companies Fox (FOXA), ESPN (through Disney ), CBS (PARA), and NBC are all paying at least $2 billion annually to the league for broadcast rights for the next 11 seasons.
Amazon (AMZN) was the first next-generation streaming platform to get a piece of the NFL pie with its Thursday Night Football package, with Apple (AAPL) and YouTube fighting over the final slice.
Netflix (NFLX) is still the streaming content king with 223 million subscribers, but the company does not have a presence in live television.
Thestreamable.com conducted a survey of 2,562 fans who regularly watch the NFL. The study found that 48% of NFL fans "definitely will or are likely" to subscribe to Sunday Ticket once it is offered by a major streaming provider.
The winning bidder will pick up a big number of first-time subscribers, according to the study, more than 40% of those that never subscribed before said they would "definitely" will.
Legacy Media Changes
While nascent streamers like Apple and Google are looking to bet big on sports and sports programming, at least one person in the analyst community are urging Disney (DIS), a legacy media company, to get out of its sports business.
In a note published this week, Wells Fargo analyst Steve Cahall says that CEO Bob Iger's return to the company signals that the company will spin off its ESPN assets in 2023.
"DIS will begin the spin-off process for ESPN & ABC including launching ESPN in streaming a la carte," Cahall wrote. "Cost rationalization and balance sheet options are critical to reaching this outcome. The result is a better-off remaining DIS."
The sentiment for the separation isn't new, with analysts for years saying that the company should consider it due to cord cutting and a lack of profitability at the cost intensive "worldwide leader in sports."
But former CEO Bob Chapek said that ESPN was still part of Disney's future while he was still in charge.
"If you happen to have a vision for the future that the rest of the world’s not necessarily in tune with yet, then you keep ESPN. You keep ESPN, and you have a full complement of general entertainment, family news, sports that no other entertainment company can touch," Chapek told Deadline,
But now that Chapek is out at Disney, and all bets are off.
