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Morgan Stanley: NFL Sunday Ticket on YouTube TV Could Lose Nearly $9 Billion

“As we look longer term, we expect to generate an attractive return over the life of the deal.”

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NFL Sunday Ticket YouTube
Courtesy: Alphabet

YouTube and YouTube TV are in the first year of a seven-year contract with the National Football League to serve as the exclusive home of NFL Sunday Ticket, the league’s out-of-market subscription service. The company has yet to release subscriber figures for the service, which it is reportedly paying $2 billion annually to carry, and could result in sizable losses.

According to a report from Sportico, estimates from Morgan Stanley’s equity research unit is projecting an almost $8.86 billion loss over the life of the deal – approximately $1.27 billion per year. These figures also took into account the escalators within the contract that bring it to a reported $14 billion through the next seven years, which will raise the fee to $2.24 billion at the end of the deal.

The platform has approximately 1.5 million subscribers through its tiered subscription plan, which gives users the ability to purchase the service outright or with a YouTube TV subscription. Morgan Stanley calculates that Alphabet, the platform’s parent company, is estimated to generate almost $570 million in revenue in the first season, which would lead to a total loss of $1.2 billion.

In order to prevent further losses and to reach a break-even point on the deal, the platform would need to double its subscriber count next season. Alphabet has not disclosed revenues from NFL Sunday Ticket subscribers throughout the year, but its most recent fiscal report states that it generated $22.3 billion in sales through the first three quarters of 2023.

Projections from Morgan Stanley, however, see the service rising to 2.5 million subscribers by 2029, which will create $835 million in revenue. Because of the rights fee of $2.24 billion during that final season, the company would still be facing a loss. Yet that could be presumably softened because of the concomitant estimate of 65% of those subscribers accessing the service through the YouTube TV bundle.

Ruth Porat, president and chief investment officer at Alphabet and Google, revealed on Wednesday’s earnings call that fourth quarter financial results will include revenues for the service, along with acquisition costs for associated content. She also stated that since Q4 2023 represents the first full quarter with Sunday Ticket, the service is contributing to higher customer acquisition costs (CAC) and within the overall subscription revenue being generated.

“As we look longer term, we expect to generate an attractive return over the life of the deal,” Porat said. “We’re continuing to invest in support of this and excited about the additional opportunities that come out of it, working with partners to deliver clips and other opportunities.”

For now, the company is pleased with how its first season with the service is going and understands the feedback from users regarding multi-view functionality. That aspect of the service was a staple on DIRECTV, which was the home of NFL Sunday Ticket since its launch in September 1994, and something that customers have implored the company to discover through innovation.

“I think, in the broader context, you have to look at it as overall, a YouTube subscription strategy,” Philipp Schindler, senior vice president and chief business officer at Google, said during the earnings call. “The great feedback we’ve gotten so far on the YouTube experience is very, very significant.”

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John Skipper ‘Expects’ NBA To Have More Than 2 Partners in New TV Deal

“They’re gonna end up with more partners than they have now…with somewhere between two or three times the money they have now.”

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Former ESPN President and current Meadowlark Media CEO John Skipper thinks the NBA will go the NFL route and have more than two broadcast partners for their upcoming media rights deal.

During an episode of the Sporting Class podcast, John Skipper and cohorts David Samson and Pablo Torre discussed the upcoming NBA media rights deal, under the guise of Dallas Mavericks governor Mark Cuban selling the team, and how it could play out for teams moving forward. When it came to the total valuation of the NBA’s upcoming rights deal, Skipper was bullish on the NBA’s future.

“They’re gonna end up with more partners than they have now,” Skipper said, “they’re gonna end up with, in my opinion, with somewhere between two or three times the money they have now,” before host Pablo Torre added some additional color, stating “Because of broadcast partners in television and also the tech companies.”

The NBA has famously featured one or two broadcast partners for most of its lifespan. CBS held NBA broadcasting rights from the mid-70s until the 1989-90 season, then lost the rights to NBC from 1990 until 2002, with interspersing of cable broadcast holders like USA Network, ESPN, and Turner between there.

In 2002, the NBA shifted to a more rigid version of its two-partner system, where ABC and ESPN would split games with Turner Broadcasting. The league extended its agreement with both networks multiple times, which will finally come to a head in 2024.

For the first time, the NBA could look to expand across multiple channels, similar to how the NFL handles business, where multiple broadcast partners will air games on either certain days of the week or certain holidays. While Turner could be planning for life without the NBA, both Amazon and NBC are planning an aggressive pursuit of NBA rights during the next media rights negotiation.

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Kirk Herbstreit: Pat McAfee Has ‘Changed My Experience’ on College GameDay

“You’ve changed the approach, the energy, not just on this set, but like the week. I’m having a blast.”

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Kirk Herbstreit and Pat McAfee

While many detractors say otherwise, Kirk Herbstreit is crediting Pat McAfee for positive changes in the way he and the team approach College GameDay.

During an appearance on The Pat McAfee Show, McAfee jokingly discussed leaving College GameDay due to “mean” college football fans ruining his fun and positive life. “I don’t want the negativity in my life, I don’t want the death threats,” McAfee said. Herbstreit, however, had no time for McAfee and threw the gauntlet down. “If you dare even think about leaving College GameDay,” Herbstreit said, “I’m leaving with you.” McAfee then responded with the famous line from Talladega Nights — “don’t you put that on me!”

Within the jest, however, Herbstreit lets us peek back behind the curtain to how he and the rest of the College GameDay team feel about McAfee. “You’ve changed my experience,” Herbstreit said. “You’ve changed the approach, the energy, not just on this set, but like the week. I’m having a blast…It’s like being on a team where you have a great energy. If you dare leave…” Fortunately, by the end of the segment, McAfee was back on board and admitted this would be his life for the foreseeable future.

Some pundits have felt that McAfee’s appearance on GameDay hasn’t helped grow the program, despite them confirming Herbstreit’s remarks on McAfee’s personality. Former ESPNer Dan Le Batard said on his show, “He is effusive, he is such a positive person. He is effusive in his praise for the people on that set. But now the numbers are coming back, and this is something that McAfee couldn’t have expected.”

While the ratings numbers for GameDay are higher than they’ve ever been (something Herbstreit and McAfee made sure to mention in their discussion,) they’re still under attack from FOX’s Big Noon Kickoff, who have scored some major ratings wins over this past season. According to FOX, before the Nov. 25 game between Ohio State and Michigan, Big Noon Kickoff averaged 2.34 million viewers and hit a record 4.36 million viewers from 11 a.m. ET until kickoff. This made Big Noon Kickoff the most-watched college football pregame show on television for the weekend. The recent losses have some feeling like College GameDay has lost its way.

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Al Michaels Questions If Bill Belichick Has TV Future

“Does he go into television? How about this? They put him in the booth with Kevin Burkhardt and Tom Brady next year on FOX.”

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Amidst a dismal season for the New England Patriots, one legendary sports broadcaster thinks Bill Belichick could leave coaching to join him in the world of announcing.

During last night’s Thursday Night Football broadcast between the New England Patriots and Pittsburgh Steelers, Al Michaels made a passing comment about Belichick’s status as Pats head coach moving forward — but it could have massive reverberations throughout two industries.

“Does he go into television?” Michaels said while speculating Belichick’s future with co-host Kirk Herbstreit. “How crazy that sounds, but he won an Emmy [for NFL Network’s NFL 100 All-Time Team series] with Cris Collinsworth and Rich Eisen. How about this? If he goes into television, they put him in the booth with Kevin Burkhardt and Tom Brady next year on FOX.”

Belichick and Brady teaming up once more doesn’t seem too far-fetched, especially considering their past successes together. Former Patriots wide receiver Julian Edelman and tight end Rob Gronkowski also prowl FOX’s airwaves, which could allow the former Patriots to dominate sports media in a way not seen since ’80s and ’90s-era Dallas Cowboys did in years past.

Unlike Brady, who is a relative newcomer to sports broadcasting, Belichick has precedent with sports TV in the past. Outside of the NFL’s Top 100 All-Time Team. Belichick served as a guest analyst for ABC’s Super Bowl XL pre-game show breaking down the action between the Steelers and the Seattle Seahawks. Belichick was praised for his work on that broadcast, despite his prior reputation as a bit of a grump. Belichick also featured heavily and was likewise praised for his appearance in ESPN’s The Two Bills, a 30 for 30 starring Belichick and Bill Parcells.

What could the future hold for Belichick? As Herbstreit says during the broadcast, “The only guy who knows is Bill Belichick.”

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