Tech giants including Apple, Amazon and YouTube’s owner, Google, pursued the rights to stream the N.F.L. games.
For years, live sports has been the last stitch holding the cable television bundle together even as more major games moved to streaming services. Apple snatched up Major League Baseball games. Amazon scored Thursday Night Football. But the National Football League’s Sunday games, a centerpiece of American sports, have remained defiantly tied to traditional TV.
Until today.
On Thursday, YouTube and the National Football League announced that they had reached a deal for the N.F.L.’s Sunday Ticket package of games, as the tech giants Apple, Amazon and Alphabet, which owns YouTube, use their deep pockets and huge platforms to transform the business of live sports rights.
“I think it’s a seismic deal,” said John Kosner, a former ESPN digital executive and the chief executive of the media consultancy Kosner Media. “With this deal, the three major sleeping giants have all woken up.”
The deal will allow YouTube viewers to stream nearly all of the N.F.L. games on Sunday next season, except those that air on traditional television in their local markets. Games will continue to be available on other networks throughout the week, including Monday night games on ESPN and ABC and Thursday evening games on Amazon’s Prime Video service.
The games will be available as an add-on for an additional fee to YouTube TV, the company’s $64.99 streaming package, or available for purchase separately through its YouTube Primetime Channels, another product.
The new Sunday Ticket deal could be worth as much as $2.5 billion annually, including payments from YouTube and separate agreements to license the package to businesses including bars and restaurants, according to people familiar with the negotiations. That’s about $1 billion a year more than DirecTV, the previous rights holder. The deal includes payments based on the number of YouTube subscribers that Google is able to add, as well as other performance benchmarks, the people said.
YouTube struck a seven-year agreement for Sunday Ticket, one of the people said, a long-term deal to give Google time to build its subscriber base. DirecTV also agreed to long-term deals.
“For a number of years we have been focused on increased digital distribution of our games, and this partnership is yet another example of us looking towards the future and building the next generation of N.F.L. fans,” Roger Goodell, the N.F.L. commissioner, said in a statement.
Still, a major chunk of N.F.L. games will be exclusive to traditional television for the next decade. Last year, the league struck decade-long deals with major U.S. TV networks, including Fox, ESPN, CBS and NBC. In recent years, the league has tried to generate extra income by selling streaming rights separately.
RedZone, a popular feature that allows fans to monitor Sunday games when teams get within scoring range, will no longer be available on DirecTV, but the N.F.L. will continue producing its own version of the broadcast, according to two people familiar with the matter, who spoke on condition of anonymity because they were not authorized to speak publicly. That feature will be available to users through cable providers, such as Comcast, or through their Sunday Ticket subscription on YouTube.
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In recent months, the league explored selling a stake in the N.F.L. Network, its media arm, as part of the Sunday Ticket package. Those talks did not result in a deal, and the N.F.L. will continue those talks, the two people familiar with the matter said.
Robert Kraft, the owner of the New England Patriots and chairman of the league’s media committee, said the N.F.L. had used emerging technology for decades to reach fans, including cable and satellite TV. He added that YouTube would also provide N.F.L. fans with seamless access to game statistics and fantasy football results.
“Now, it’s time to move to a new platform to reach younger fans and YouTube makes the most sense,” Mr. Kraft said.
The Sunday Ticket package could prove to be a boon to YouTube, which has been keen to expand its subscriptions as its main business — advertising — has stalled. Football games could draw more sports fans to YouTube TV, which is already the most popular internet-based pay-TV service. The company said in July that it had five million subscribers, surpassing Hulu + Live TV.
YouTube gets the bulk of its revenue from advertising on videos uploaded by users. Stubborn inflation and a slowing economy have prompted advertisers to pull back spending, causing YouTube’s ad sales to contract almost 2 percent in the past quarter, Google’s parent company, Alphabet, reported in October.
The disappointing results have given more urgency to a yearslong plan for YouTube to expand in other ways. The company said in November that it had 80 million paying subscribers for its music and ad-free premium services, up from 50 million a year earlier. YouTube said this year that YouTube TV had more than five million paid and trial users.
“YouTube has long been a home for football fans, whether they’re streaming live games, keeping up with their home team or watching the best plays in highlights,” Susan Wojcicki, the chief executive of YouTube, said in a statement.
The deal culminates years of industry speculation over who would land the coveted package of games that began in 2019 when John Stankey, who was the chief operating officer of DirecTV’s former owner, AT&T, said the company was rethinking its deal for Sunday Ticket.
It became clearer that the package would go to a tech company in July when Mr. Goodell, the N.F.L. commissioner, said in an interview that a streaming service would be “best for consumers.” Apple, Amazon and YouTube emerged as the likeliest candidates, and all three companies vied for the rights.
Recently, Apple — long considered the front-runner — decided to drop its pursuit. As the negotiations stretched on, Apple became skeptical that the Sunday Ticket package was worth what the N.F.L. was seeking and ended serious conversations about a potential deal, a person with knowledge of the deal said.
Apple instead homed its focus on completing a deal to sponsor the halftime show for the 2023 Super Bowl, which it believes will raise the profile of its Apple Music service.
YouTube, on the other hand, resumed the negotiations after Thanksgiving, and the companies hammered out a deal within weeks.
Tripp Mickle contributed reporting.