Twitter this week landed streaming rights to a 10-game package of Thursday Night Football games next season for a surprisingly modest $10 million, edging out rival bids from Verizon, Amazon and Yahoo, at least one of which reportedly came in 50 percent higher than Twitter’s offer. Another rival, Facebook, reportedly dropped out of the bidding last week over objections to the advertising framework imposed on the deal by the NFL.
Twitter, in fact, will get minimal advertising rights as part of the deal. As a technical matter, it will be rebroadcasting the CBS and NBC feeds of the games, which the networks will also be streaming over their own, authenticated TV Everywhere platforms as part of their $450 million deal to broadcast the games, and the networks will be handling the bulk of the ad sales for both broadcast and digital channels. Twitter will get a little bit of inventory around the margins to sell, plus some pre-game, player-created spots on Periscope. The deal is basically a $10 million brand-building exercise for micro-blogging and live streaming platform.
The games, in fact, will be available for free, without authentication, both on Twitter’s own platform and across its entire, syndicated global footprint.
That last point was obviously critical for the NFL, which has been working feverishly to expand its audience outside the U.S. and sees streaming as a way to reach potential fans in territories where broadcast rights would be a tough sell.
“Twitter is where live events unfold and is the right partner for the NFL as we take the latest step in serving fans around the world live NFL football”, NFL Commissioner Roger Goodell said in a statement announcing the deal. “There is a massive amount of NFL-related conversation happening on Twitter during our games and tapping into that audience, in addition to our viewers on broadcast and cable, will ensure Thursday Night Football is seen on an unprecedented number of platforms this season.”
There were likely other considerations for the league in choosing Twitter over its rivals, however, and they say a lot about how the NFL views the future of live sports broadcasting.
The NFL’s biggest problem is that there is a large and growing segment of the audience that no longer watches much broadcast television. By the time its current network deals come up, in 2020, that segment will be even larger. Basing its future broadcast rights strategy exclusively on traditional broadcast platforms, therefore, risks losing touch with that segment of the audience. Between now and then the NFL needs to figure out a strategy for reaching those consumers on connected devices of all types, particularly mobile devices.
Amazon would certainly have offered the NFL a strong, deep-pocketed partner with a robust streaming platform and global ambitions. Amazon is even a major player in live streaming already, through its ownership of Twitch, the live videogame broadcasting platform. But its relationship with Twitch could also be viewed as a conflict by the NFL.
If the NFL is going to lose audience share in the future, particularly among Millennials, it’s most likely to lose it to fast-growing past times like eSports. On the very day of the Twitter announcement, in fact, Twitch announced a partnership with competitive-gaming platform FaceIt to launch a new professional eSports league. The ESports Championship Series, as the new league is called, will offer teams an ownership stake in the venture akin to other professional sports leagues, including the NFL. It’s first competition, ESC — Counter-Strike kicked off this week with $3.5 million in prize money at stake.
For the NFL, partnering with the parent of Twitch, would be like sleeping with the enemy.
Verizon boasts a robust mobile streaming platform and already has a deal with the NFL for out-of-market mobile rights for Sunday games. But that existing arrangement probably worked against Verizon in this case. The NFL clearly recognizes that the era of reaching 30 million people at a time on a single platform is rapidly fading and it will need to work with multiple partners in the future. For now, at least, keeping those partners pitted against each other to show what they can do for the league is a better strategy than bundling rights together.
Yahoo handled streaming duties for the the one game the NFL streamed live this past season, paying a reported $17 million for the privilege. But Yahoo at this point is a risky partner for the league. It could well be sold or significantly restructured by the time next football season rolls around potentially leaving the NFL with a new or uncertain partner.
The only other bidder that really made strategic sense for the league was Facebook. Its global reach is orders of magnitude greater than Twitter’s and has lately been moving aggressively to bolster its position in live streaming. But the social media platform dropped out of the bidding of its own accord, at least for the upcoming season.
That left Twitter. The micro-blogging service already has a deal with the NFL to show game highlights and it can provide the league with valuable data on how its users are engaging with the content in real time.
The low-dollar bid, and the short length of the deal underscore that this is a fact-finding mission for the NFL not a business model. But it shows the league has done its homework.