Twitter's deal for NFL streaming rights last season was a big investment for the company, but Amazon is a "very different company and won’t have to justify the cost of its NFL deal every quarter because video is a tiny part of its business, representing just 2.2% of revenues," according to Jon Lafayette of BROADCASTING & CABLE. Barclays analyst Kannan Venkateshwar said that Amazon "won’t sell its commercial inventory to advertisers, but instead use the space to promote its own business." Venkateshwar noted Twitter generated about $50M in gross revenue from its deal with the NFL last season, earning $15M gross profit and $7M in EBITDA (BROADCASTINGCABLE.com, 4/5). MKM Partners Senior Analyst Rob Sanderson said the $50M Amazon is shelling out for "TNF" is a “pretty small allocation of their programming budget, or at least what we expect their programming budget to be" this year, as last year's budget was $3B and this year's should be about $4.5B ("Power Lunch," CNBC, 4/5). CNBC's Julia Boorstin said, "There’s no question that sports is considered more valuable than anything else to draw in live viewers" ("Fast Money," CNBC, 4/5). VARIETY's Janko Roettgers wrote Twitter "dipped a toe in the waters with last season’s NFL deal, but the company clearly wasn’t ready to go all in, and commit to a much more expensive deal" (VARIETY.com, 4/5).
SHOULD LINEAR TV BE WORRIED?: Former CBS Sports President Neal Pilson said whether Amazon makes or loses money on the NFL deal "seems insignificant." Pilson: “What you have here is an experiment that’s continuing. The NFL is still looking at various opportunities beyond linear television for profit and for distribution, and the other companies ... are looking at the NFL as a possible good sport to distribute to their customers." The NFL's rights fees will rise if at any point the league "decides to give an exclusive package to one of these over-the-top platforms." Pilson: "Then you're talking 10 times what you're talking about now." But he added, “I don't see that happening any time soon. The TV agreements, for the most part, are up in about five or six years. Even down the road, I don't see an over-the-top platform taking away a package from television as we know it" ("Closing Bell," CNBC, 4/5).
