Amazon Reportedly Paying Record $120 Million for NFL Wild Card Game on Prime Video, Showing Why Pay-TV Is in Trouble
Amazon Reportedly Paying Record $120 Million for NFL Wild Card Game on Prime Video, Showing Why Pay-TV Is in Trouble
Are the rising costs of live sports rights the final nail in the coffin for pay-TV?
It’s easy to see why the NFL is reportedly hesitant to allow its games to become available on the new joint venture streaming platform in the works from Disney, Fox, and Warner Bros. Discovery. The league is reportedly concerned that having so many of its games available from one source will dilute its power to ask for exorbitant sums from its broadcasting partners during rights negotiations, and judging from the price it’s charging Amazon to show a playoff game on Prime Video next season, those fears could be well-founded.
- Amazon is reportedly paying $120 million for the rights to a Wild Card game next year.
- If accurate, that’s $10 million more than NBCUniversal paid to stream a Wild Card game on Peacock this year.
- With the price of live sports rights increasing exponentially, pay-TV providers may not be able to meet retransmission fee demands from providers for much longer.
According to a report from Front Office Sports, Amazon is set to pay $120 million for the rights to stream a playoff game exclusively on Prime Video during the 2024-25 season. That beats the $110 million that NBCUniversal reportedly shelled out to get the rights to the Miami Dolphins vs. Kansas City Chiefs game on Jan. 13, which streamed only on Peacock outside the Miami and Kansas City markets.
The Peacock game was a success according to just about every metric. It created the most internet traffic on any single day in United States history, and also drove record signups to Peacock. The success of that game may have worked against Amazon, as the NFL felt comfortable asking for a $10 million price increase after seeing proof that a streaming-only playoff game could work.
Does Amazon’s NFL Wild Card Game Point to the Demise of Pay TV?
It would be understandable if some broadcasters recoiled in horror from the idea that the NFL could charge an extra $10 million for a single game after a one-year interval. The cost of broadcast rights for major live sports have skyrocketed in recent years, and cable and satellite providers are feeling the squeeze most urgently.
The reason pay-TV providers are so firmly under the gun is that networks and cable channels use the cost of live sports rights as a reason to ask for higher retransmission and carriage fees from distributors. This leaves cable and satellite companies little choice but to raise their subscription fees, which naturally leads to an accelerated rate of cord-cutting. With less money coming into the top of the funnel, and more pouring out the bottom, it soon becomes clear that the current equation for pay-TV providers is unsustainable.
Then there’s the fact that customers have a large and growing amount of alternatives to cable. The new joint venture streamer from Disney, Fox, and WBD is just the latest example; that platform will offer full livestreams of several top channels that have never been available outside the cable bundle before, such as ABC, Fox, ESPN, FS1 and TNT. The streamer is facing significant legal headwinds at the moment, but if it hits the market it will likely be a highly attractive cable alternative for sports fans.
It may be the case that soon, only entities with huge purchasing power like Amazon or streamers with multiple financial backers like the JV platform will be able to afford the increasing cost of live sports rights. That may reduce the number of choices for consumers, but it could also solve one of the main frustrations of current sports fans: knowing which streamer or channel has the game they want to watch.
NFL commissioner Roger Goodell has been clear that he intends to keep his league available on broadcast TV for as long as he’s in office, so a full shift to streaming isn’t likely in the future. But the NFL is also plainly willing to continue building its streaming presence, and with streaming options for top sports increasing along with the price of their broadcast rights, the squeezing out of some pay-TV companies feels like an inevitability.
Prime Video
Prime Video is a subscription video streaming service that includes on-demand access to 10,000+ movies, TV shows, and Prime Originals like “The Lord of the Rings: The Rings of Power,” “Jack Ryan,” “The Marvelous Mrs. Maisel,” “The Boys,” and more. Subscribers can also add third-party services like Max, Showtime, STARZ, and dozens more with Prime Video Channels. Prime Video also offers exclusive live access to NFL Thursday Night Football.