Amazon Set To Carry Many NFL Games Exclusively On Prime Video

After steamrolling the bookstore industry, monopolizing online retail, taking a stab at dominating the pharmacy business and not that far from muscling out the competition and becoming the dominant player in cloud, Amazon is set to dominate yet another market: NFL viewership.

The WSJ reports that the National Football League is on the verge of signing new rights deals with media partners that could see Amazon.com carry many games exclusively and TV networks pay as much as double their current rate, plunging NFL viewership notwithstanding.

According to the new agreements, which could be in place as early as next week, TV deals for the league’s Sunday and Monday franchises with Fox, CBS, NBC and ESPN are likely to run for as long as 11 years, they said. ESPN’s deal would go into effect after the 2021-22 season while the Fox, CBS and NBC agreements would kick in after the 2022-23 season.

But it is the NFL’s deal with Amazon that is of most interest: it would result in a significant number of Thursday night games being available exclusively on its Prime Video platform and “represent the league’s deepest foray into streaming”, WSJ sources said. And in order to lock even more Prime Video viewers, those games wouldn’t be available on traditional television outside of the local markets of the two teams playing.

To be sure, Amazon is hardly a new entrant to the NFL streaming race: the world’s largest online retailer has long been an aggressive bidder for sports rights here and abroad. The company’s relationship with the NFL was established in 2017, when it obtained streaming rights for Thursday night football. Those games have also been televised by the league-owned NFL Network and most recently by the Fox network.

Amazon currently pays between $75 million and $100 million to stream Thursday games. As with Fox, that contract still has two seasons on it. Meanwhile, the NFL Network would continue to carry a handful of exclusive Saturday and Thursday games as its contract with distributors requires it to carry at least five games per season, WSJ sources said.

A deal with Amazon for most Thursday night games would solve a potential problem for the NFL. While Thursday games get strong ratings compared with any other programming, the high price tag was making it a tough sell with broadcasters who already carry NFL packages such as Fox, which analysts and industry insiders estimate loses $250 million per season. Prior to Fox’s deal, CBS and NBC shared Thursday games and their combined losses were more than $200 million, people familiar with those agreements have said.

That said, a move to put a chunk of NFL games – which typically dominate television ratings – exclusively on a streaming platform isn’t without risk. Amazon carried one game exclusively last year and drew an average audience of fewer than five million, much lower than the typical NFL game on broadcast television or ESPN’s “Monday Night Football.”

It almost makes one wonder just how accurate all those third party calculations of streaming viewership really are. Still, no matter how made up Amazon’s streaming numbers may be, the company has tons of cash, much more than its traditional broadcast media peers.

As a result, the NFL is trying to strike a balance between embracing new platforms and the revenue they represent while keeping most of its games on traditional television. To address that, the NFL will hike Fox Corp’s annual average fee for its Sunday afternoon games to around $2 billion from the current $1.1 billion. ViacomCBS likely will also see its costs double, its average fee per season of Sunday afternoon games surging from $1 billion to the $2 billion range. NBC’s new deal is also expected to more than double from the average of $960 million it pays per season now to around $2 billion, a person familiar with that pact said. NBC’s streaming service Peacock will also carry one game exclusively and will simulcast NBC’s Sunday night games, the WSJ reported.

Ironically, the massive fee hikes come after a season in which ratings plunged for the regular season, playoffs and Super Bowl, in large part due to the politicization of the sport. Network executives however counter that the coronavirus pandemic played a large part in the declines and feel numbers will improve once normalcy returns. Good luck with that.

In addition, CBS, Fox, NBC and ESPN – all of which have also become ridiculously political – are all facing challenges in holding on to viewers, making live sports ever more important.

But what is perhaps most notable is that this round of long-term deals may be the last time the NFL is able to command such giant fee increases from its broadcast and cable partners as fragmenting viewership and cord-cutting are expected to only increase in the coming years, said MoffettNathanson media analyst Michael Nathanson.

“This is a sign that the NFL wants to take as much as they can for as long as they can. A decade from now, the world will surely look different and a new set of bidders will need to emerge,” Mr. Nathanson said.

One can almost imagine the media world a decade from now: absent significant changes to the US political and corporate landscape, it is quite likely that Amazon will control much of the media world and – thanks to its monopoly status – will able to marginal prices on all contracts, something it has already perfected in the online retail world.