The NFL is finding a new home for its Sunday Ticket package, and the bidding is down to two of the world’s largest tech companies and one of the world’s largest media conglomerates.

Amazon, Apple, and Disney are all vying for the out-of-market set, which the NFL reportedly wants to shift at least partly to a streaming property.

• The league is seeking $2.5 billion to $3 billion annually for the Sunday Ticket.
• Disney-owned ESPN is reportedly willing to pay $1 billion to $1.5 billion. The network is already on the hook for an annual $2.7 billion to continue its broadcast of “Monday Night Football.”
• Amazon is paying around $1 billion per year for exclusive rights to “Thursday Night Football.”

The league is looking to package Sunday Ticket with a stake in NFL Media, which includes the NFL Network, NFL RedZone, and NFL.com.

The league has a fourth option: put the package on its own streaming service, NFL+, which it plans to launch later this year.

Direct Losses

DirecTV has held the rights to the service since its launch in 2014 and is on the hook for $1.5 billion for the upcoming season. The broadcaster, which requires buyers of the $300 Sunday Ticket package to also purchase its core satellite bundle, has lost roughly $500 million on it each year for several years.

Contractual agreements with Fox and CBS prevent the eventual owner of Sunday Ticket from reducing the price too much below the current $300 annual cost.

Ahead of its inaugural championship this weekend, USFL chair Eric Shanks confirmed the league is returning for a second season in more markets.

Shanks, who also serves as CEO and executive producer at Fox Sports, told Sports Business Journal that the league’s eight teams will play in two-to-four markets during the 2023 season. In its first season, all teams played in Birmingham, where the league’s office is located. 

Each of the new markets will house multiple teams, but the USFL will stick with eight teams for its second season. Players reportedly make $4,500 per game.

“We’ve always had an expansion plan that could potentially come into play in Year 3 and beyond,” Shanks explained. Fox owns the USFL through USFL HoldCo, LLC and committed $150 million over three years.

The league will stick to a similar schedule — its 36 regular-season TV broadcasts averaged around 715,000 viewers across Fox, NBC, FS1, and USA Network.

• The league’s debut game brought in 3.1 million viewers.
• The last regular-season game had 181,000 viewers.

“I would say yes, it was a profitable property for us,” NBC Sports executive Jon Miller said.

Spring Flings

The USFL’s return was expected but not guaranteed. Several other spring football leagues didn’t make it past one year, including the Alliance of American Football — which averaged 556,000 viewers — and two versions of the XFL.

The XFL, which averaged 1.9 million viewers in its latest iteration, is making a return next spring.

Allied Esports Entertainment announced record revenue in its latest earnings report, but also posted losses — a trend that has become increasingly prevalent in the gaming industry.

The esports entertainment company saw its revenue jump 381% year-over-year to $2.4 million in Q1 2022. Despite the encouraging results, Allied posted a net loss of $3.8 million during the quarter, up from a loss of $3.3 million in Q1 2021.

Total costs and expenses reached $6.2 million in Q1 2022, a 15% increase year-over-year. 

• Allied posted record results behind increased traffic at its HyperX Arena in Las Vegas.
• During Q1, the company launched its first original branded content offering and NFTs.
• It produced 92 events with 68 proprietary events and 24 third-party productions in Q1.
• It also renewed its deal with NASCAR to host eNASCAR Arcade events.

Luckily, the company continues to invest in its balance sheet, which reached $95.7 million in Q1.

Troubling Trend

Allied is another example of mounting losses for gaming-related companies due to increased spending on marketing and securing deals. 

Esports Entertainment Group reported a net loss of $63.8 million in fiscal Q3 compared to $15.7 million in revenue, while esports betting company Rivalry posted a net loss of $19.2 million in 2021 against $8.6 million in revenue.

In April, FaZe Clan submitted an amended filing to the SEC indicating that it posted an adjusted EBITDA loss of $28.7 million in FY2021, compared to a projected loss of $19 million.