Amazon Dives Deeper Into Sports With Deal to Stream Saturday NFL Games

Amazon expanded a streaming deal with the NFL to include Saturday games, in addition to Thursday night games, over the next few seasons. Digital viewership of the NFL grew 51% in 2019.
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Amazon  (AMZN) - Get Report is getting closer to the holy grail of pay TV: live sports, specifically football.

The tech giant announced on Wednesday it had secured exclusive rights to stream a handful of NFL games for the next three seasons, signaling a new push into valuable sports deals.

The NFL has been testing the waters with digital streaming partners, such as Twitter and Amazon, for a few seasons: Twitter paid $10 million for a streaming package of Thursday night games in 2016; in 2017, Amazon secured nonexclusive rights to Thursday games, paying a total of $115 million for three years, according to Bloomberg.

The new contract between the NFL and Amazon grants the latter exclusive rights to one additional Saturday game per year, which will stream on Twitch and Amazon Prime Video. There are about 118 million Prime members in the U.S, according to a recent estimate.

“We are thrilled to renew our Thursday Night Football deal with the NFL, and are excited to expand our relationship to include exclusive global streaming rights to an additional regular season game in 2020,” said Marie Donoghue, VP of global sports video at Amazon, in a press release. 

Live sports is one of the few remaining genres of television with large, predictable audiences watching at a fixed point in time. And along with news, sports are one of the main sources of programming that drives subscriptions to traditional television. 

"Those who have a pay TV service are twice as likely to say that sports are important to them," noted Bruce Leichtman, president at Leichtman Research Group, which focuses on the broadband, media and entertainment industries. 

Accordingly, broadcast rights to sports are highly prized -- and come with a price tag to match for media giants such as Disney  (DIS) - Get Report, AT&T  (T) - Get Report, Comcast  (CMCSA) - Get Report. Football is the most popular American sport, with around 16 million viewers on average for regular season games.

“These live programs are also very important for promoting other programs these companies own, such as other TV programs, upcoming films, or newly launched streaming services,” explained Moody’s Neil Begley in a recent report on the sports and media landscape. 

Begley noted that annual contract sizes involving major sports leagues can add up to billions per year: Contracts for the NBA, for example, total $2.7 billion annually on average, and the NFL fetches the largest contracts of any league.

The NFL takes in more than $6.5 billion annually from television deals, according to Bloomberg, and had been expected to hike broadcast fees substantially prior to the coronavirus pandemic. Digital viewership is also on the rise, with the NFL reporting a 51% increase in viewership, to 487,000 viewers total, on NFL.com, Verizon and broadcast websites for the 2019 season. 

Tech and internet companies among the few companies with deep enough pockets to bid on sports, with Facebook  (FB) - Get Report and Yahoo securing broadcast rights to a limited number of sports broadcasts in recent years. 

While the NBA, NCAA and other leagues have shut down their 2020 seasons because of the coronavirus pandemic, the NFL is expected to go forward with its upcoming season. The league said it will release its schedule of games no later than May 9. 

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