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Fundamental question for the media business: Just how much are big-time sports rights worth these days?
Here’s Verizon’s answer: More than they used to be.
The wireless carrier is re-upping its deal with the NFL, and sources say it will pay more than $1.5 billion over five years to stream live games to its subscribers. Verizon is making the move in large part to boost the AOL and Yahoo properties it has spent billions on in the past few years.
Verizon’s last deal with the NFL, which runs through the current season, cost the carrier $1 billion over four years. That means Verizon is paying at least 20 percent more per season for the games.
The deal comes as traditional TV executives have started questioning the value of sports deals, even though live sports are one of the last things that can command big audiences. Leagues like the NFL, meanwhile, have been hoping that new buyers, like Facebook and Google, will come in and push the value of deals even higher.
Besides the price, the big change between the old deal and the new one is that Verizon won’t make the streams exclusive to its subscribers anymore. Instead, it will stream the games on a variety of Verizon-owned properties, including Yahoo, AOL, Go90 and Complex to any phone or tablet in the U.S.*; it will focus in particular on its Yahoo Sports hub.
As before, Verizon won’t stream every NFL game throughout the season: It will stream evening games on Sunday, Monday and Thursday nights, along with the games local TV affiliates carry (in New York City on Sunday, that meant I could stream the Giants-Cowboys, Jets-Broncos and Eagles-Rams games on my iPhone).
All of the games will be free, regardless of which carrier you have. I don’t know whether Verizon plans on offering its subscribers a deal on broadband usage, though.
Verizon will also get so-called “shoulder” content, which is media-speak for “not the thing that you really want but we think there’s some value in there anyway.” In this case, that means clips and highlights, and the right to call itself an Official Sponsor of the NFL.
Big Takeaway: This reads like a Big Win for the NFL, at a time when the league could use one. It gets Verizon to pay more for its games, and distribute them more broadly than before.
It’s also a signal that Verizon still thinks it was a good idea to move into the media business. And that Verizon hopes buying up Big Deal sports rights will help establish its media bonafides, much like Rupert Murdoch did with Fox and the NFL many moons ago.
If you want to take the glass half-empty take, happy to help there, too: It’s also possible that this is the last big price hike the NFL will be able to enjoy. In that scenario, by the time its next big TV deals come up in a few years, the TV networks will be less willing to pay top dollar for sports, because audiences will keep melting away — and the digital guys won’t show up to replace the TV guys.
We’ll see. In the meantime, people who do like watching the football games on their phones will see an upside soon: Verizon and the NFL say they’ll have the expanded streaming deal in place at some point in January, and at the latest in time for the championship playoff games Jan. 21.
* The NFL, which manages to slice up the rights to its games more thinly than any league around, has kept the rights to stream games to PCs and, more crucially, internet-connected TVs, away from Verizon.
This article originally appeared on Recode.net.
