After a decade of imagining how live sports might jump from linear TV to streaming, it feels like we’re suddenly at an inflection point. Max just launched its Bleacher Report-branded sports add-on; Disney is preparing to beef up ESPN+ with games that average people care about; Apple paid $2.5 billion for Major League Soccer; Amazon bought Thursday Night Football for $10 billion; and NBA rights, which hit the market next year, are expected to double or triple in value as tech companies bid up the price. Money talks—just look at what’s happening with golf’s PGA Tour—and the deepest pockets are all in Silicon Valley.
Meanwhile, all eyes are on YouTube, which won the NFL’s Sunday Ticket last year for an astounding $14 billion over seven years. So far, the numbers look promising, though the deal is surely losing Alphabet, its parent, tons of money at the outset. About 1.3 million customers had signed up for Sunday Ticket on YouTube as of Oct. 1, according to research firm Antenna—already comparable to the roughly 1.5 million who were subscribed through DirecTV, the previous rights holder (although the old Sunday Ticket was only available through a full package offering, whereas YouTube is able to offer it a la carte). DirecTV has said it was losing “a billion dollars a year” on that deal, but NFL executives are optimistic that the potential audience on YouTube will be much, much larger, even at a cost of $249 to $489 per year per subscriber.
YouTube C.E.O Neil Mohan and C.B.O. Mary Ellen Coe have said subscriber counts are exceeding expectations, but they failed to provide insight into where those customers are coming from—YouTube TV, the cable and satellite competitor, or YouTube Primetime Channels, the company’s subscription store (similar to Amazon Prime Video Channels)—or how well those customers are being monetized. On the subscription front, 1.3 million customers paying an estimated average of $425 a year is about $552 million gross. Advertising—with a CPM of around $75 in the key demo during 2020, according to Standard Media Index—adds another couple hundred million dollars. Targeted ads may help bring in additional advertisers who weren’t allocating budget when it was available through DirecTV, too.