WSJ News Exclusive | YouTube Paying Roughly $2 Billion a Year for NFL Sunday Ticket

Sunday Ticket is a subscription-only package that allows customers access to all Sunday afternoon games for out-of-market teams. DirecTV currently pays the National Football League an average fee of $1.5 billion per season for both residential and commercial rights. Its deal expires after the current season.

YouTube is licensing the residential rights for seven years, the people said. Those rights are valued at roughly $2 billion per season and could increase if certain benchmarks are reached, the people said. The NFL will also seek to license the commercial rights for bars and restaurants for an additional $200 million, the people said. 

The Wall Street Journal reported Tuesday that the NFL and YouTube were in advanced talks. Other bidders for Sunday Ticket included

Amazon.com Inc.

and

Walt Disney Co.

’s ESPN, people familiar with the matter said.

For YouTube, the deal shows a willingness to spend top dollar for live sports content, following major deals by tech rivals Amazon and

Apple Inc.

in recent years. 

YouTube has more than two billion monthly users and at least five million subscribers and trial accounts for YouTube TV, its online cable bundle. The video platform has been hit by a slowing advertising market. Its ad revenue fell 1.9% in the latest quarter, the first time sales declined year-over-year since Alphabet began reporting the unit’s performance in 2020. 

Current rights holder DirecTV has about 13.5 million subscribers. However, like all other cable and satellite providers, it has been hard hit by cord-cutting as more consumers embrace streaming. Five years ago DirecTV had more than 20 million customers. 

YouTube will offer Sunday Ticket as an add-on to YouTube TV and in the video platform’s main app through a service called Primetime Channels that allows viewers to subscribe to individual channels. 

“Technological and product innovation is one of the things that is particularly exciting about bringing this type of content,” said

Neal Mohan,

chief product officer at YouTube. “We’ll be able to showcase these NFL games in a way that I think no other platform can.”

Mr. Mohan declined to comment on pricing details. YouTube TV costs $64.99 per month before add-ons. DirecTV currently has a $300 per season version of Sunday Ticket and a $400 version that features extra NFL-related content. 

DirecTV, which has had exclusive rights to Sunday Ticket since 1994, had been losing about $500 million annually on the package, the Journal has reported. Mr. Mohan declined to comment on YouTube’s ability to make it a profitable package, saying only, “We view it as a long-term investment.” 

Sunday Ticket is popular in bars and restaurants, and the NFL will need a distribution partner there. DirecTV has those relationships in place and joined with Amazon to handle bars and restaurants for its “Thursday Night Football” package. 

NFL commissioner

Roger Goodell

said in an interview he expects the number of subscribers for Sunday Ticket to grow substantially with the move to YouTube. “We’re going on an increasingly attractive platform that is growing on a global basis,” Mr. Goodell said. 

The deal with YouTube and the league’s agreement with Amazon’s Prime Video for Thursday night games are part of a strategy to attract younger fans, Mr. Goodell said. “It is a site where a lot of `Gen Z’ goes to get content,” he said, adding the NFL wants to “fish where the fish are.”

YouTube’s interest in Sunday Ticket goes back years. In 2013, Google executives including then CEO Larry Page met with Mr. Goodell and discussed the TV package, the Journal reported. The NFL ended up renewing its contract with DirecTV the following year.

Industry executives said the deal would boost YouTube’s efforts to bring more long-term subscribers to the video platform. YouTube has recently poured resources into subscription offerings, which tend to produce more predictable revenue but slimmer profits than ad-based services.

Last year, YouTube TV began offering Major League Baseball’s MLB.TV package for an added cost of $24.99 per month, providing access to all regular season games outside of a viewer’s local area. YouTube also has the exclusive broadcast rights for a slate of matches in one of Brazil’s top soccer leagues.

The monthly price of YouTube TV has risen from $35 since it was announced in 2017, reflecting increased spending on content, according to analysts. 

“Everyone wants to be that one app where everybody consumes all their content,” said Sean Doherty, chief operating officer of the streaming technology company Wurl, a unit of

AppLovin Corp.

“YouTube just gave people a big reason to be their one app.”

For the NFL, the YouTube deal continues to show the increasing value of its rights. The league has boosted the rights fees for all its media properties by more than $100 billion in less than three years.

The league now has deals in place for all its television properties through the end of the decade. Other NFL rights holders are

Comcast Corp.’s

NBC, Paramount Global’s CBS,

Fox Corp.’s

Fox, Amazon’s Prime Video streaming platform and Disney’s ESPN. (Wall Street Journal parent

News Corp

shares common ownership with Fox.) 

The YouTube deal is set to expire at the same time a window opens up in the league’s other television deals, giving it an option to renegotiate, people familiar with the contracts said. 

The NFL had been seeking to also sell stakes in its media properties including the NFL Network and RedZone channels as well as its nascent streaming service NFL+ as part of a Sunday Ticket deal. Mr. Goodell said the league is still looking for a partner or partners to invest in those holdings.

Write to Joe Flint at [email protected] and Miles Kruppa at [email protected]