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It was announced yesterday that the National Football League agreed to a multi-year agreement with Alphabet (NASDAQ:GOOGL) to grant YouTube TV and YouTube Primetime Channels the right to exclusively distribute NFL Sunday Ticket in the United States starting from the 2023 season.
The Wall Street Journal was the first to report the deal is close to being announced by two parties. The WSJ also reported that YouTube will pay an average price of roughly $2 billion a year to secure rights to the NFL Sunday Ticket franchise.
Here’s what these Street analysts have to say about the deal:
Wells Fargo analysts: “We think the current DirecTV contract will end at ~$1.7bn for the 2022 season based on a $1.5bn AAV from 2014-21. YouTube’s $2bn AAV from 2023-30 (7-year deal) implies no major step-up when we run the math incl. +MSD% annual escalators. Now, the NFL is still looking at the commercial rights, which the NFL says will fetch another ~$200mm AAV, but that still doesn’t imply a big step-up on the new Sunday Ticket deal, and that’s a departure from most major renewals of the last few years.”
Piper Sandler analysts: “We view the news as positive and see GOOGL best positioned as any to capitalize on the opportunity. The move likely accelerates the push toward OTT time spent and ad dollars moving to streaming.”
Citi analysts: “We point to Amazon’s success with its inaugural season of TNF that we believe is converting Prime Video into both an acquisition and retention tool for Prime and in the case of YouTube, we believe the Sunday Ticket could accelerate adoption of more subscription services. We acknowledge the partnership is likely to impact overall margins here shorter term, but we look for improved top-line growth and greater subscription revenue over time.”
