NFL media executives targeted the league owners meetings in Arizona last month as the time they wanted to announce the new digital partner for “Thursday Night Football.” That meeting, though, was dominated by the Oakland Raiders’ pending move to Las Vegas, pushing back approval for the league’s Amazon deal by a week.
The deal culminated in the early hours of April 4 with a marathon night of negotiations in the NFL’s Park Avenue offices, and a host of bleary-eyed executives finally leaving a conference room at about 3:30 a.m. The business and legal teams from both sides stayed late, led by Amazon’s head of sports, Jim DeLorenzo, and the NFL’s senior vice president of digital media business development, Vishal Shah.
The league’s digital committee, chaired by New England Patriots owner Jonathan Kraft and Washington Redskins owner Dan Snyder, approved the deal Tuesday afternoon during a conference call.
Like last year’s “TNF” deal with Twitter, this pact lasts for only one year, with Amazon agreeing to pay $50 million for the streaming rights to 10 games. Last year, Twitter paid $10 million for the package.
Here are a few of the most popular questions about the deal:
Why Amazon?
The NFL wants many different digital media companies to sample its programming. In 2015, it sold a game exclusively to Yahoo for about $20 million. Last year, Twitter paid $10 million for the non-exclusive streaming package of 10 “TNF” games. This year, it’s Amazon for $50 million. Don’t be surprised if it’s Facebook next year, and Google the following year. The NFL wants to have plenty of bidders the next time its media rights go to market, in 2021 (the rights now held by ESPN) and 2022 (CBS, Fox and NBC).
As for how the league picked Amazon, the NFL’s director of media strategy and business development, Will Deng, highlighted Amazon’s Prime video platform and its other businesses, from Alexa to Twitch. “It’s a powerful platform,” he said. “They have a track record of delivering high-quality video.”
Why does Amazon want the NFL?
When Amazon hired DeLorenzo to head up its sports department last spring, it sent a signal that it viewed live sports as a way to grow its Prime video offering. Amazon has been investing heavily in video to grow its base but this is its first big push into sports rights. Analysts estimate that Amazon has about 60 million Prime customers. Those customers get free shipping on purchases and typically are Amazon’s biggest spenders.
Who else bid on the package?
All of the usual digital suspects bid on the streaming rights: Facebook, Google/YouTube, Twitter. What’s interesting is that some media companies that have been active in acquiring digital media rights, like BAMTech and Turner Sports, did not bid. BAMTech and Turner Sports competed for UEFA Champions League rights, but sources said “TNF’s” lack of exclusivity — CBS, NBC and the NFL also stream the games — kept those companies from bidding.
Why would the NFL allow Amazon to put these games behind a paywall?
Only Amazon Prime customers who pay $99 a year will have access to these games, a situation that seems to run counter to the NFL’s desire to make its games available to the widest possible audience. But Deng said Amazon Prime customers overindex with cord cutters, who have given up their cable subscriptions and watch video only through digital platforms. “It’s not about absolute reach; it’s about incremental reach,” he said. “As the industry continues to evolve, consumption goes to more digital platforms.”
How will Amazon’s ads look?
A lot has been made about Amazon’s ability to target its sales. If you like a particular uniform, you click on it and have it delivered to your house in two business days, right? Not so fast, Deng said. While that kind of sales process certainly appears likely in the not-too-distant future, it almost certainly will not be ready by the coming season. “We will see where we shake out in terms of innovation,” Deng said, adding that most of the focus will be on delivering high-quality video rather than advertising innovations.
