YouTube wins new ad inventory with NFL's Sunday Ticket streaming rights

The NFL reached a multibillion-dollar deal with YouTube to stream Sunday Ticket games, a sprawling package of football that will open a new source of ad inventory on YouTube, the league said Thursday.

“The local ad inventory is something that YouTube will monetize,” said Brent Lawton, NFL’s head of media strategy and business development, in a media call on Thursday. “The national ads will be flowing through [YouTube] from what CBS and Fox are otherwise showing.”

The league confirmed reports that the deal was valued between $2 billion and $2.5 billion a year for seven years. Digital streaming giants have been bidding furiously for NFL content, and Amazon and Apple both were reportedly interested in Sunday Ticket. DirecTV, the satellite TV provider, had Sunday Ticket, but Google's YouTube opens it to a wider audience.

Sunday Ticket is a subscription that provides access to every NFL game on Sundays, if they are outside of the local TV market in which the viewer resides. YouTube will offer Sunday Ticket through YouTube TV, the virtual TV subscription plan, and as a standalone channel within the YouTube app. Lawton described it as a “blend of the way that Sunday Ticket has historically been distributed, through pay TV … but also offers an á la carte way to get the game.”

YouTube will stream the ads that come through the national TV broadcaster, and it will fill the percentage of ad slots that otherwise would go to the local network affiliates.

YouTube will set the pricing, but details of the cost to consumers have not been released yet. YouTube TV typically has a base cost of $64.99 per month, but the price differs according to promotions and how many add-on channels viewers pick. Google has plenty of experience selling YouTube TV ad inventory, as it already gets a percentage of commercial slots on channels that stream there.

NFL Sunday Ticket is available through the end of this season from DirecTV, which charges about $300 for the package. 

YouTube TV, which has more than 100 channels, is the largest online pay-TV service, with about 5 million subscribers, according to Bloomberg Intelligence.

It will face a steep challenge in making Sunday Ticket profitable. DirecTV, which has about 2 million Sunday Ticket subscribers, has been losing money on the package for years due to its $1.5 billion annual-rights fee.

Sunday Ticket was the only NFL rights package still up for grabs. The league, which regularly delivers the most-watched events on television, signed new long-term distribution deals with its major broadcast partners last year worth more than $100 billion over a decade. Some networks, including NBC and CBS, also got the right to air games on Peacock, Paramount+ or other streaming platforms.

‘Massive Win’

For the NFL, signing with YouTube is a “massive win,” said Daniel Cohen, executive vice president of media rights consulting at Octagon.

The league got a good price and built another relationship with a deep-pocketed tech company that could bid on future NFL broadcast rights, Cohen added. In addition to selling Thursday night NFL games to Amazon.com, the league reached a deal with Apple this fall to sponsor its Super Bowl halftime show.

Executives at DirecTV, which has offered Sunday Ticket for nearly three decades, have been hoping that whoever wins the rights will cut a side deal with them. The company is losing TV customers at a rapid clip as more people cancel their pay-TV subscriptions, and has been looking for ways to stem the bleeding. Under such an agreement, DirecTV could help YouTube move Sunday Ticket subscribers to its service, while the satellite-TV service would benefit by maintaining a relationship with that customer.

“To the extent that we’re partners on that, we will be very helpful,” Rob Thun, DirecTV’s chief content officer, said in an interview this fall. “To the extent that we’re not, we don’t really have a lot of skin in the game to help them take on those new customers.”

DirecTV is also interested in reselling Sunday Ticket to rural customers who don’t have strong enough internet to stream the games, Thun said. Additionally, the company is hoping to keep airing games in bars and restaurants. It recently made a similar arrangement with Amazon for Thursday Night Football.

The NFL and YouTube are looking at additional ways to distribute NFL Sunday Ticket in commercial establishments such as bars and restaurants.

“It makes a heck of a lot of sense for us to be a partner on the commercial front, given that those relationships have taken years to establish and cultivate,” Thun said.