OTT Streaming Service Lands Exclusive Sports Broadcast Rights for 1st Time

YouTube200x200

Fox (FOXA) outbidding CBS & NBC for Thursday night football (does not include digital rights), with an eye-raising 5-year $550 million/year commitment, received much of the fanfare; but, there was another broadcasting deal announced on Wednesday that deserves more attention. YouTube TV has secured the exclusive rights to broadcast L.A. F.C. (MLS) games, marking the first time a streaming service has landed primary (as opposed to television simulcast) broadcast rights. The wide-ranging partnership also gives the GOOGL-owned OTT pay-TV service naming rights on the jerseys of the expansion club. An exclusive YouTube TV channel will show +/-18 L.A. FC games (only within L.A. market) in their inaugural season, with the balance of the schedule available on ESPN & FS1 (both included within a YouTube TV subscription); there are no additional fees to access the games beyond the $35/mo. subscription cost. Financial terms of the deal were not disclosed.

Howie Long-Short: Never has a sports team chosen to forego broadcast television (affiliate stations, RSNs) in favor of live-stream exclusivity, so this partnership could shake up the industry. The proliferation of cable alternatives surely has other teams/leagues evaluating their options; teams like the Clippers, Trailblazers and Wizards are reportedly already discussing/exploring self-distribution following the expiration of their existing local rights deals. The NFL isn’t going down this route anytime soon, as they still draw massive television audiences that warrant lucrative carriage agreements (see: TNF deal); but, you can expect this trend to continue for teams/leagues playing to niche audiences.

Fan Marino: Fox is paying more ($100 million+) annually for TNF rights than NBC & CBS combined to pay last season, and both lost money; so, Fox isn’t expecting to make a profit (FOXA shares closed -4%, to $36.90 following Wednesday’s news) on the games. They did this deal to win the ratings war on 11 Thursday nights and to prop up the balance of their lineup. I had a chance to speak to San Francisco 49ers President Al Guido on Wednesday morning and asked him if Fox should have overpaid for the TNF package?

Al: You use the term over-paid. I can’t speak for Fox and how they valued the product, but Fox has valued NFL football for a long period of time and I think they would probably tell you that their business has been successful because of their purchasing of NFL football. The margin of victory (on Thursday night) has been as close as it’s been on Sundays, generally speaking the health and safety has been equal to Sundays and 37 of the top 50 programs are still NFL programs. I’m a big believer that Fox having all of the games on one network, will help them going forward.

Want more JohnWallStreet? To join our free daily email newsletter list, sign-up here!

Author: John Wall Street

At the intersection of sports & finance.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.