Why Was Bears-Eagles Flexed To NBC? Attorneys Seek Interim Trustee For CSN Houston Craig Morton Sues NFL Over Dangers Of Playing Second-Screen Experience Key To Sports Viewing Dolphins Investigation Won't Wrap In '13 "Bull Durham" Headed To Broadway RFD-TV Delivering Rodeo Atmosphere Media Notes Super Bowl Organizers Unveil Mass Transit Plan Redskins Sorting Through Shanahan Options
SBD/June 4, 2013/Media
Verizon Close To Four-Year, $1B Extension Of Rights To Stream NFL Games To Phones
Published June 4, 2013
LARGE INCREASE FROM PREVIOUS DEAL: The deal marks a significant increase over Verizon’s previous deal. An NFL sponsor since ‘10, Verizon was paying around $50M annually for its NFL rights, including rights fees, team spend commitments and an ad spend on NFL media partners. By comparison, the league’s TV partners signed nine-year deals with the NFL last year that pay significantly more. ESPN pays an average of $1.8B per year, Fox pays $1.1B per year, CBS pays $1.08B per year and NBC pays $950M per year. Sources said the league offered to sell its mobile rights to the league partners, but none of them were willing to pay the price Verizon agreed to shell out. Network execs were surprised at the amount the carrier agreed to pay. The TV networks have retained the right to stream their games to tablets and computers, not mobile phones. DirecTV also has a deal to stream every NFL game as part of its four-year, $4B deal to carry Sunday Ticket. DirecTV’s deal is not affected by the Verizon deal, sources said. The NFL currently is negotiating a new deal for Sunday Ticket. While the amount Verizon agreed to pay the league comes as a surprise, the fact that it signed a renewal does not. Under the agreement, Verizon will develop an NFL app and pick up the tab for wiring many of the league’s stadiums to provide increased connectivity. However, insiders noted that because of the varied conditions across NFL venues, during the negotiations Verizon steadfastly refused to guarantee a standard level of connectivity for NFL teams. However, some teams have already done stadium WiFi deals with companies like Enterasys Networks.
BENCHMARK FOR MOBILE CONTENT: A deal of this magnitude will echo across sports and entertainment, since it provides a benchmark for what the mobile content associated with America’s most popular TV sports property is worth. As such, many sports and entertainment properties will try to cash in on their mobile rights. Streaming such a sizable amount of NFL content on mobile phones will be the ultimate indicator as to whether content can influence consumers to switch or adopt a new cell phone service provider. “Obviously the NFL’s appeal is massive, so it will be an ultimate test,” said former AT&T Sponsorships Exec Dir Tim McGhee, who now heads consultancy MSP Sports. “But we never saw any indicator that content drove choice of (cell) carrier when I was at AT&T. It can be a point of differentiation, but we did not see it as a competitive advantage."