YouTube is invading the sports world for live rights.
People familiar with the matter said YouTube wants to offer as many games as possible while also providing users with the “cleanest” experience possible.
YouTube has been cagey about its sports strategy, acquiring the rights to one NFL game on its free, ad-supported platform last year and also buying the rights to “NFL Sunday Ticket” through the end of the 2029-30 season. Outside of these two moves, YouTube has been largely silent.
Still, YouTube is interested in buying live sports from nearly every major U.S. sports league if it can get custom rights to convey its message clearly to consumers, including every local game and every tournament game, said the people, who requested anonymity because the company’s plans are private.
YouTube’s strategy is different from Netflix’s. It’s an interesting contrast between the world’s two largest streaming services by users. Netflix wants individual games and tournaments that can be turned into mini-events, while YouTube is likely to buy games in bulk if there is a clear consumer proposition underlying the rights. In other words, YouTube isn’t interested in different games unless there’s a clear connection.
Sports Business Journal reported earlier this year that YouTube was in talks to be the NBA’s new regional sports network solution, buying the rights to 20 to 25 teams for a price that could exceed $1 billion. As CNBC first reported in July, YouTube is interested in the rights to the FIFA Men’s World Cup.
People familiar with the matter said YouTube is still evaluating the feasibility of the idea if it can’t get its entire team together. YouTube ideally wants both in-market and out-of-market games, the people said. It’s also unclear whether the NBA would be comfortable selling full rights to one platform.
A large part of YouTube’s sports goals revolve around building a premium service. A few weeks ago, YouTube Premium signed a deal to bring Peacock content into its service at no additional charge.
YouTube Premium, which eliminates YouTube ads and costs $15.99 a month, doesn’t necessarily want to sign a number of other similar deals to turn the service into an aggregator for other companies’ streaming services. But what YouTube executives might be interested in is buying a piece of live sports and putting it behind a paywall. In other words, make people pay for YouTube Premium to access the game.
YouTube may use “free” YouTube as a marketing tool behind a paywall to force users to pay a monthly fee for YouTube Premium. For example, you can put a small number of games on YouTube with ads to effectively promote sign-ups for the full Premium package. You can also push live games at Premium with videos from millions of sports-related content creators.
Last year, YouTube hired Justin Connolly from Disney to become its global head of media and sports. Connolly is one of Disney’s highest-paid executives, having worked at the company for 25 years and rising through the ranks to become president of its platform distribution division, which includes ESPN and Disney+.
NFL Commissioner Roger Goodell told CNBC last month that the league may rework existing game packages to fit the modern media environment. One way to do this is to dismantle the “Sunday Ticket.” This will allow the league to sell more games in other packages.
YouTube executives are already considering this as a possibility, the people said. YouTube currently spends $2 billion a year on “Sunday Ticket,” and could use that money and more to buy new premium game packages if the league moves in that direction.
Analysts at Wolfe Research predicted in a note to clients Friday that the NFL “will tier entitlements to maximize the value of premium tiers, while creating lower cost tiers for companies with more limited purchasing power.”
