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The Roger Goodell-led NFL, which long has been among the most conservative of major sports leagues, suddenly finds itself deep in business with big tech. Amazon is now a national media partner, and tech companies are among the bidders on a sliver of its media businesses, including its new subscription service, NFL+.
The latest tech team-up? Apple, in a deal that will see the Apple Music service become the official sponsor of the Super Bowl halftime show, replacing Pepsi after a decadelong run.
The deal is the culmination of a long effort by the NFL to not only turn the halftime show into a major revenue generator (the deal is said to be in the five-year, $50 million-a-year range) but to further expand its place as a cultural moment. Or, as an NFL source told The Hollywood Reporter as the league was weighing its options last year, it was about finding a sponsor that could make the show “bigger … making it stand way outside of the 12 minutes.”
Now the league and Apple, with its global reach and tens of millions of Apple Music subscribers (estimates peg the service with more than 80 million subs), will get its chance to make the halftime show its own, with Rihanna at the center of it.
The Apple Music deal comes amid one of the most important few months in the league’s history. On Sept. 15, for the first time, Amazon launched its Thursday Night Football package, the first time a national NFL rights deal was streaming-only. And July 25, the league launched its own NFL+, which is meant to appeal to football superfans who may not have access to a TV. The league also is in the market to sell a piece of its NFL Media business, which includes NFL+ and NFL Network.
The deals with Apple and Amazon underscore the league’s turn to tech as it plots out a future where the traditional pay TV bundle continues to collapse.
But the NFL Media talks are seen as being part and parcel with the upcoming Sunday Ticket streaming rights, with companies like Apple and Google said to still be in the running for the rights that are currently controlled by DirecTV.
For the NFL, which gets a vast majority of its revenue through rich contracts with broadcasters owned by Disney, NBCUniversal, Fox and Paramount, the appeal of tech companies is obvious: “They never have to get to profitability in their streaming business,” Needham and Co. analyst Laura Martin said Aug. 8 during a Yahoo event. “They can make a profit in some other part of their business that justifies them spending egregious amounts of money on sports rights.”
It’s a critical piece of the puzzle: The NFL’s broadcast partners are all spending more than $1 billion annually just for the rights to games, with hundreds of millions more needed to produce them and market them. For a company like Fox or NBC, such an investment needs to be recouped. Hoever, for Amazon, Apple or Google, turning a profit on live sports could be secondary to selling iPhones or Prime subscriptions, thus keeping users in their ecosystems.
And so Sunday Ticket is likely to be the NFL’s biggest bet on tech, though Disney has made no secret of its interest in the product for ESPN+. A source says that the NFL’s deals with Apple and Amazon are not related to Sunday Ticket or the NFL Media talks, which are being held separately. But they do send a message that the league is already beginning to think beyond 2033 (or 2029, if the league opts out of the deals).
And for tech companies, which are desperately seeking to build on their advertising businesses and keep customers, it could be too appealing to pass up.
Those 120 million halftime show viewers or 13 million Thursday Night Football viewers are too good to pass up, even if you have to make up the profits elsewhere.
This story first appeared in the Sept. 28 issue of The Hollywood Reporter magazine. Click here to subscribe.
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