Could the NFL Be Preparing to Take the NFL Sunday Ticket From DirecTV?

There was an interesting moment that took place during Sunday's Super Bowl that had nothing to do with the game itself -- CBS cameras cut to video of NFL commissioner Roger Goodell in his suite and alongside the NFL commissioner was a very familiar face in the business world -- Amazon's Jeff Bezos.

What's more, Bezos wasn't the only top tech executive in Goodell's suite at the game -- top executives from Google were also present.

Now it's possible this is just good business -- Amazon bought two ads that aired on the Super Bowl -- as did the Bezos owned Washington Post -- and Google has become a big TV advertiser as well, but there are two intriguing details that suggest something more than an advertising relationship might be afloat. First, the NFL has the right to take the Sunday Ticket away from AT&T's DirecTV and sell the package, which allows out of market viewing of NFL games, to a new partner. (If you live in, say, Miami and are a New York Jets fan the only way you could see your Jets play would be to go to a sports bar or subscribe to DirecTV's NFL Sunday Ticket package. Otherwise you'd only get the Dolphins game in that broadcast window.)

Presently DirecTV (via parent company AT&T) pays $1.5 billion a year to the NFL for exclusive rights to offer NFL Sunday Ticket to its subscribers. If the NFL doesn't elect to end this deal, it runs through the 2022 season. But DirecTV's business isn't very healthy right now -- the company lost 670,000 satellite and streaming customers in its most recent quarter -- and only 10% of DirecTV's subscribers purchase the Sunday Ticket. That has always been the biggest limitation of the NFL Sunday Ticket, that it isn't available to everyone, just someone with DirecTV.

So it's possible Amazon or Google could sweep in and bid more than $1.5 billion to take away these rights from DirecTV. (And even if the NFL doesn't act now, it could be paving the way for a tech company to buy away these rights in 2022).

This theory becomes even more intriguing when you add in a nugget dropped in a recent New York Times article. Brian Rolapp, the NFL's chief media and business officer, told the paper that Fox hadn't submitted the highest bid for Thursday Night Football last year. Rolapp didn't name the tech company who had submitted the highest bid, but he told the New York Times, "We turned down higher bids (for Thursday Night Football). When you put a game on exclusively on digital, are you growing the distribution and availability, or are you limiting it, and to the extent how much? And for us, we weren't sure we wanted to do that yet."

This is a really big deal because it provides clear evidence that at least one company is willing to pay huge money to become partners with the NFL.

While the NFL might not have wanted to take games exclusively to digital that had been airing on broadcast television for fear of limiting the audience, might the league be fine with taking games that had been airing for a limited audience on satellite television and allow a streaming company to carry them digitally instead?

This would seem to make a ton of sense, especially if those tech companies were willing to pay more money to offer the NFL Sunday Ticket to a wider audience.

Google has an easy digital distribution platform via YouTube, but Amazon makes even more sense because it already has over a hundred million Amazon Prime subscribers and an ability to easily offer the games to a massive audience. How many people reading this article right now would pay $200 or $300 to Amazon to be able to watch every NFL game at your convenience on Sunday?

I know I would.

I suspect there's a huge audience of out of market NFL fans who would love the opportunity to stream all the NFL's weekly games but don't have access to DirecTV right now.

Now the big challenge here would be cost -- DirecTV can pay $1.5 billion a year not just because of the money they make off of the Sunday Ticket -- even if all two million NFL Sunday Ticket subscribers -- were paying full cost at $300 a year, that still only adds up to $600 million -- but because they are effectively gambling that a million or more of their subscribers are signing up solely for the NFL and otherwise might choose another cable or satellite subscriber. That allows DirecTV to make money off their subscriptions year around, which helps pay for the NFL Sunday Ticket package.

Does DirecTV make much money off the package?

The math seems doubtful.

So Amazon -- or YouTube's -- big gamble would be that a decent percentage of their audience would be willing to pay enough to make the decision to bid on these games worthwhile. Of course the advantage Amazon in particular would have here is that they could theoretically use the games themselves as a marketing tool to sell other Amazon products to NFL fans. And, to be honest, in a really killer app move they could even be planning for a future when sports gambling is legal and sports fans in jurisdictions where online gambling has been made specifically legal under state law. What better way to gamble on games than when you're already online watching them? Can you imagine a pop up ad during commercial breaks trying to entice you to place a wager? I'm sure Amazon can.

Now there could certainly be other digital bidders -- you'd think DAZN would also be at the table as well as Facebook and Apple -- but selling this package seems like the perfect situation for the NFL. Go look at Rolapp's criteria above -- selling the NFL Sunday Ticket to a digital partner would both grow the distribution and the availability while allowing the NFL to test fan response to a digital offering in the event they wanted to consider going digital in the future.

It would also, strategically, potentially create something else -- a new bidder for the over the air package of rights the league has to sell in the near future.

Remember that AT&T has been eager to get back into the NFL game through its recent acquisition of Turner Sports. Is it possible AT&T could take the money they've been spending on the Sunday Ticket and bid aggressively for Monday Night Football? Don't you think the NFL would like ESPN to have a competitive bidder for Monday Night Football? And don't you think the NFL would be fine with that game airing on ESPN or TNT? Since the game is already on cable, does it really matter which cable station airs it?

There's also one more wrinkle that could potentially be in play here with Jeff Bezos, could Goodell be pitching him on bidding for the Seattle Seahawks to replace the recently deceased Paul Allen in league ownership? Certainly. But the real asset isn't Bezos as one of 32 NFL owners, it's Bezos as one of the league's biggest distribution partners).

Regardless, this is going to be fascinating to watch play out.

And I'm betting it wasn't a coincidence that Roger Goodell had Amazon and Google executives in his suite at the Super Bowl just before the NFL Sunday Ticket was coming up for bid.

It feels like a digital auction of the NFL Sunday Ticket is coming and the NFL is about to get even richer.