NFL Extends Amazon Thursday Night Football Streaming Deal For Three Years

The coronavirus pandemic has shut down the sports world, but it’s almost business as usual for the National Football League. The league reached a new 10-year collective bargaining agreement with its players in March, and teams inked $2.4 billion worth of free agency deals over the past six weeks. The first virtual NFL Draft drew a record combined audience of 55 million viewers over three days last week.

The world’s richest sports league checks another offseason box today with an extension of its Amazon deal to stream Thursday Night Football games broadcast by FOX. The new three-year Amazon deal covers 11 games and extends a partnership that started with the 2017 season. The NFL would not comment on financial terms. The prior pact paid $65 million annually.

The biggest modification in the latest agreement: Amazon will exclusively stream one regular season game each year on Prime Video. The 2020 game will be a Saturday game in the second half of the season. The game will also be televised in the home markets of the two teams, keeping with the NFL’s long-standing commitment to make games available on free, over-the-air TV.

The deal is a relative pittance for the NFL’s 32 teams, which had $15 billion in revenue last year, and even more so for $281 billion-in-revenue Amazon. FOX pays $660 million annually to broadcast Thursday Night Football, on top of the $1.1 billion it pays for the network’s Sunday package. But the NFL-Amazon tie-up plays a critical role for both parties. The NFL is the most dominant property on TV with 41 of the 50 most-watched telecasts in 2019, but cable subscribers continue to cut the cord and the average NFL viewer is 52, according to Nielsen. Streaming helps reach a younger audience, as does Amazon’s esports-orientated streaming service, Twitch, which will also have games with commentary from popular streamers.

“They are fishing where the fish are,” says media rights expert Chris Bevilacqua, who has negotiated dozens of sports rights deals. Pay-TV penetration in the U.S. has dipped from 88% of U.S. households to 65% in the past decade, per estimates from Wall Street analyst firm MoffettNathanson.

The NFL’s digital streaming audience for Thursday Night Football rose 43% last year to just over one million viewers per game on average. The games averaged 15.4 million viewers overall, including broadcast TV, up 4%.

NFL games represent a chance for Amazon to ultimately drive higher sales in their traditional e-commerce business, by attracting more Prime members and collecting viewer data. “Amazon is experimenting with how live video rights to the most valuable sports IP serves as a marketing platform,” says Bevilacqua.

Amazon to this point has concentrated much of its sports rights business outside the U.S., where Prime memberships have a much lower penetration. Amazon says it has more than 150 million global Prime members, but Consumer Intelligence Research Partners estimates 118 million are in the U.S. Amazon recently invested heavily in tennis and soccer sports streaming rights outside the U.S., including agreements for the U.S. Open, Premier League and UEFA Champions League.

Thursday Night Football will be available to Amazon Prime members worldwide, as part of what the NFL calls its “Tri-Cast” model on Thursdays of broadcast (FOX), cable (NFL Network, FOX Deportes), and digital (Prime Video and Twitch) distribution. In addition to collecting millions of dollars from FOX and Amazon for the Thursday games, the NFL creates equity in the league-owned NFL Network by broadcasting games there as well. “There is no one better than the NFL using leverage and maximizing the value of their broadcast rights,” says Bevilacqua.

This might be just the first shoe to drop in the NFL’s massive media haul. SportsBusinessJournal reports the league is pushing ahead with renewal talks this year with its broadcast partners, despite the pandemic. The NFL is in a prime negotiating position, with ratings up 5% last season and scripted television ratings in free fall. The NFL also just added more TV inventory, with a 17th game each season and expanded postseason plans. In addition, labor peace is locked in for the next 10 years under the new CBA.

Domestic media partners paid the NFL more than $8.5 billion last year and experts think the new deals will be at least 60% higher than the previous pacts. The latest Amazon renewal lines up with the expiration of the league’s broadcast deals. Bevilacqua says, “The Amazon deal makes perfect sense as the NFL gets organized for their next auction.”