The New NFL Sunday Ticket Deal Will Accelerate Cord-Cutting

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[Variety]: The YouTube NFL Sunday Ticket deal has the potential to be a real game-changer.

Much of the focus on the new $2 billion a year deal for the next seven seasons is on the fact that YouTube TV will be able to offer subscribers access to Sunday Ticket, making it the preferred virtual MVPD of choice for football fans.

But it goes much deeper than that.

YouTube will also be making Sunday Ticket available to anyone, via its Primetime Channels section, marking the first time that direct access to all Sunday league games taking place across the country has been untethered from a subscription service for the general public.

Virtual MVPD services see spikes in subscribers (in 2022, this was +900k across the three services reporting) that coincide with the NFL regular season and fall every year once it ends. This pattern is not replicated among MVPD subscribers (who see a constant rate of decline), with a key reason being that some football fans are subscribing to VMVPD services given they offer monthly, not annual subscriptions, and want to catch the games.

With Sunday Ticket now available to all consumers without the need to subscribe to a TV provider, there is a strong chance that consumers will begin to churn out of services like fuboTV and Hulu with Live TV. In order for this to occur, YouTube must be smart and keep the current pricing for Sunday Ticket at what DirecTV was charging, $293.94.

Combined with NFL Plus, which gives access to all nationally televised or streamed games not available on Sunday Ticket across ESPN, NBC, Prime Video, CBS, Fox and the NFL Network, this would see a cheaper way for football fans to watch all the games they want than paying just the base tier for most VMVPD services. Note that Sling TV costs less but lacks access to CBS.

Given that the vast majority of TV shows have next-day availability on much cheaper streaming services, and the fact that TV subscriptions ebb and flowwith the NFL, it’s not hard to envision a future when some NFL fans opt to forego adding TV service altogether and combine Sunday Ticket with NFL Plus—don’t be surprised to see that offered by YouTube next year, either.

The prior Sunday Ticket deal included both residential and commercial rights, and cost DirecTV $1.5 billion annually. The new deal has split the two out, with YouTube currently only having access to the $2 billion residential rights, with the NFL looking for a partner to take on the $200 million-per-year commercial rights. That will likely be a streaming company given the ease of distribution via broadband.

The deal pushes the total value of domestic NFL rights to $12.5 billion a year, a $4.8 billion increase (+63%) on the $7.7 billion collected in 2022. Expect this to continue to rise as the NFL explores more packages to sell. There will likely be more early Sunday morning international games sold, and if specials like Amazon’s Black Friday and Fox’s Christmas Day games, both beginning in 2023, perform well, more partners will clamor for their own games.

The NFL is a seemingly unstoppable TV rights juggernaut at this point. It will be ironic if the new Sunday Ticket deal helps to gut more of the existing TV viewer base.