The future of NFL Sunday Ticket seemed to be determined heading into the 2022 season with the league in negotiations on a record-setting streaming rights contract for the service. However, talks with Apple have seemingly hit a snag.
Apple emerged as the overwhelming favorite to land the entertainment package, with many anticipating the company would begin offering NFL Sunday Ticket in 2023. While the company faced significant competition from Disney and Amazon, it was expected to come out on top.
It seems there could now be an opportunity for others to get involved in the bidding war. According to Daniel Kaplan of The Athletic, market insiders now indicate the negotiations between Apple and the NFL have hit a standstill. While Apple TV remains the favorite to land the rights to NFL Sunday Ticket, it’s far from a guarantee.
Part of the problem is reportedly the league’s asking price. After previous reports that the NFL wanted $2.5 billion per year for its Sunday Ticket package, The Athletic now notes that the NFL is setting the price as high as $3.5 billion a year.
As Kaplan notes, it’s not a figure Apple is willing to approach. If the company sells a season-long NFL Sunday Ticket package for $400, it would need 8.75 million new subscribers to benefit from the deal financially. For comparison, per The Athletic, DirecTV’s estimated audience size for Sunday Ticket in 2022 is 1 million paid subscribers.
Reaching that audience size becomes even more complicated because of potential restrictions put on the product.
“This negotiation has gotten silly. … Clearly, there’s a problem. I think it’s really clear Apple is learning things they didn’t know. What the conversation is, is Apple’s like, ‘OK, we can’t sell internationally. OK, that was important to us. And we can’t sell it exclusively against Fox and CBS. Well, OK. Well, that changes its value.”Source on Apple’s hesitation on NFL Sunday Ticket deal
Restrictions on international games and the inability to stream broadcasts that CBS and FOX have the exclusive rights to diminish the potential value of NFL Sunday Ticket for both subscribers and Apple. As a result, it’s left the company with reservations about the total it would pay for the rights to the streaming service.
While the NFL could use Apple’s hesitancy to re-engage in negotiations with other bidders, there is another problem. According to Kaplan, Disney is focused on cust cutting right now and while Amazon has benefitted from its $1 billion deal for the exclusive rights to Thursday Night Football, it also might explore avenues to cut costs.
As for when an announcement will come, the hope within the league office is that an official partnership is reached before the Super Bowl. However, the NFL thought it would have a deal in place long before this and the lack of progress in contract negotiations could push the timeline for a decision back even further.
Ultimately, for a league that is setting long-term ambitions of $25 million in annual revenue, it might have to settle for far less than its original asking price. Even if the final deal falls well short of $3 billion, it will still be far more than DirecTV currently pays for NFL Sunday Ticket.