September 11, 2024

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Good morning. YouTube’s seven-year, $14 billion NFL Sunday Ticket deal has taken the company to the “apex” of its sports rights efforts. But it’s also created downstream effects for the company’s growth.

— Eric Fisher [[link removed]], David Rumsey [[link removed]], and Colin Salao [[link removed]]

The NFL Is Helping YouTube Beyond Sunday Ticket [[link removed]]

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YouTube’s sports rights efforts have likely reached their apex already, said Jon Cruz, YouTube head of global sports partnerships, at the Front Office Sports Tuned In summit in New York.

While most media companies are constantly chasing the next big thing, and YouTube itself continues to be open to new sports opportunities, the 2022 acquisition of NFL Sunday Ticket in a seven-year, $14 billion deal marks an important culmination of where the Google-owned outlet has been—instead of just an early signpost of where it’s going.

“What gave us the confidence to go out and get Sunday Ticket was the fact that we had been working on highlights [with the NFL on YouTube] for [nearly] a decade at that point, the fact we had built up a lot of reps with a pay-TV subscriber base via YouTube TV, and we had engaged advertisers across both of those services,” Cruz said. “All that pre-work that we did laid the foundation on which Sunday Ticket sits, as opposed to the opposite.”

That said, gaining the NFL’s residential out-of-market rights has been a significant driver to the overall YouTube business. YouTube TV is now the No. 4 U.S. pay-TV service, with more than eight million subscribers. By 2026, YouTube TV is projected to rise to No. 1 status [[link removed]], according to prominent research firm MoffettNathanson, as it continues to grow while the three linear carriers in front of it—Charter, Comcast, and DirecTV—are all in a state of decline.

“It’s been a really important pillar for our overall business,” Cruz said. “By bringing in Sunday Ticket to our platform, that’s enabled us to have the most comprehensive NFL offering of any distributor.”

On the Sidelines

YouTube, meanwhile, is choosing to remain out of the ongoing legal dispute surrounding NFL Sunday Ticket. The $4.7 billion NFL Sunday Ticket antitrust verdict has been set aside and is now headed toward appeal [[link removed]]. The case is now headed to the U.S. Court of Appeals for the 9th Circuit. But neither Google nor YouTube is a direct party to the case.

“There’s a process there that we’re going to be respectful of,” Cruz said. “We have our hands full with all of the work of making sure we’re bringing new subscribers on and taking care of the subscribers we already have. That will be our continued focus as this process runs its course.”

NBCUniversal Boss on $27 Billion NBA Deal: ‘We Have a Plan’ [[link removed]]

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NBC is set to take over the NBA’s new “B” package of media rights next year for $2.5 billion annually, but it will be paying nearly the same price as incumbent “A” package rights holder ESPN, which will shell out $2.6 billion per season over the 11-year contract [[link removed]].

“We have a plan. We know exactly what we paid … and we have a rationale for why that makes sense,” NBCUniversal Media Group chairman Mark Lazarus said at the Front Office Sports Tuned In summit Tuesday.

Key for NBC, according to Lazarus, will be boosting the over-the-air network’s prime-time inventory, and helping build a consistent subscriber base for Peacock. The paid streaming service will carry an exclusive doubleheader each Monday night of the season, and on Tuesdays, NBC will telecast two games across certain affiliate broadcast stations in different regions of the country.

“We are very confident that we made a good choice for our networks, for our businesses, and for our shareholders,” Lazarus said. The executive didn’t want to get into TNT Sports losing NBA rights but did heavily criticize Venu Sports [[link removed]]—the stalled joint streaming venture from TNT parent Warner Bros. Discovery, Fox, and ESPN.

All the Way Up

Despite the enormous costs of acquiring live sports rights, Lazarus doesn’t see the trend dying down anytime soon.

“We’ve been saying for 25 years or 30 years—as long as I’ve been kind of doing these kinds of roles—that the market’s about to burst, but it still hasn’t burst,” he said. “I wish it would, but it hasn’t.”

For now, though, NBC can sit back and relax before its 11-year, $27.5 billion NBA contract begins. “The nice thing about that is, until it starts, it’s the best deal we’ve ever done,” Lazarus said.

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Adam Silver Addresses ‘Broken’ RSN Model, Gives NBA Expansion Update [[link removed]]

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NBA commissioner Adam Silver conducted a press conference [[link removed]] in New York after a meeting with the league’s board of governors. Some of the important topics Silver addressed:

RSN Woes

Ahead of the board meeting, Knicks owner James Dolan delivered his second letter [[link removed]] in the last two months to the NBA expressing several concerns about the league’s business decisions [[link removed]], including how the $77 billion media-rights deal it signed in July would lead to the downfall of regional sports networks.

Silver said that the national media deal, because of its scale and the addition of a third partner, will cannibalize inventory from the RSNs, but he said the old model wasn’t working, either, pointing out how 18 of the league’s regional partners were either defunct or in bankruptcy. For this season, Silver revealed the league’s struggling regional partners are receiving “significantly lower fees.”

He acknowledged that the RSN model is “broken” and that the league will spend the next six months “extensively studying” the issue. He also predicted that streaming services will play a bigger role [[link removed]] in the future of local viewership.

“I think coming out of it, what you’ll see is that just in the same way these new media deals we entered into demonstrated the enormous interest in the NBA and WNBA on a national and global basis, there’s no reason that shouldn’t translate on a local basis,” Silver said.

Pumping the Brakes on Expansion

There was deliberately little talk about league expansion in this meeting, as Silver said the league is “not quite ready” to have the conversation. He said there is interest in expansion, and the league plans to discuss it with the board this season.

“Over time, organizations should grow, but it gets a little complicated in terms of selling equity in the league and what that means for the existing television relationships,” Silver said. “What we’ve told interested parties is, ‘Thank you for your interest. We’ll get back to you.’”

Silver stressed that the league has yet to make a decision on the markets, or even whether to expand at all. There have been numerous reports that the league is looking to add two expansion teams, most likely in Las Vegas and Seattle [[link removed]].

Growing Across the Pond

Last month, the Associated Press reported the NBA was looking at increasing its footprint in Europe [[link removed]]. The NBA has already established leagues in Africa and Asia, but Silver believes Europe is an untapped market.

“There’s agreement that where we are in terms of the level of interest in basketball is not commensurate with commercial activities,” Silver said.

He confirmed they are considering options like a tournament or league in Europe, but there are no specifics as of now.

Hands Off on Timberwolves Dispute

There is an arbitration hearing in November between Timberwolves principal owner Glen Taylor and minority owners Alex Rodriguez and Marc Lore—but Silver said the league will have no say in the matter.

“Depending on the outcome, only then would the league continue a vetting process for ownership,” Silver said.

FRONT OFFICE SPORTS TODAY ESPN President on Charles Barkley Interest

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ESPN president of content Burke Magnus admitted he has hopes of signing Charles Barkley after TNT Sports loses NBA media rights. Magnus joined the Front Office Sports Tuned In summit to discuss the network’s approach in the shifting world of sports media.

Plus, Brian Murphy, CEO of Athletes First, joins to explain how his agency secured the highest average annual value with Dak Prescott’s new deal, and what it is like representing Jordan Love, Tua Tagovailoa, and Aaron Rodgers. We also have bodycam footage from Tyreek Hill’s detainment and the latest mishap from the A’s.

Watch, listen, and subscribe on Apple [[link removed]], Spotify [[link removed]], and YouTube [[link removed]].

ONE BIG FIG Designer’s Fee

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$195 million

The total salary of Formula One designer Adrian Newey over a five-year deal with Aston Martin [[link removed]], according to BBC Sport. The deal means Newey’s $39 million salary is higher than all but two F1 drivers [[link removed]], though according to Sky Sports F1’s Craig Slater, he would be “grossly underpaid” [[link removed]] if he’s able to lead Aston Martin to world championships.

Newey, who has spent nearly four decades in F1 and is partially responsible for more than two dozen drivers’ and constructors’ championships, will join Aston Martin from Red Bull [[link removed]] in March.

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Conversation Starters A’s fans want the team’s sold-out final game in Oakland to be a memorable one. Check out [[link removed]] what they have in store. Take a look [[link removed]] at the new luxury suites the 49ers installed at Levi’s Stadium ahead of this NFL season. Top ESPN executive Burke Magnus said Charles Barkley would be with ESPN “in a perfect world.” Listen to his comments [[link removed]] from the Front Office Sports Tuned In summit. Editors’ Picks ESPN’s McNutt: Fallout From Viral Women’s Basketball Argument ‘Blew My Mind’ [[link removed]]by Alex Schiffer [[link removed]]McNutt went viral in June for calling out Stephen A. Smith’s women’s basketball promotion. Bama QB Jalen Milroe Launching Series With Giannis and Jay Williams’s Company [[link removed]]by Alex Schiffer [[link removed]]Alabama’s quarterback will have his own series called “LANK by Jalen Milroe.” South Dakota AG Challenges House v. NCAA Settlement Proposal [[link removed]]by Amanda Christovich [[link removed]]The complaint calls the settlement unfair for non-power schools and female athletes. Question of the Day

Will Charles Barkley end up taking a job with another NBA partner if TNT Sports loses its rights?

YES [[link removed]] NO [[link removed]]

Tuesday’s result: 84% of respondents don’t think Dak Prescott will still hold the NFL average salary record a year from now.

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