Why Big Tech is making a big play for live sports

Competing for broadcast rights to N.F.L. and other leagues could be difficult for broadcast and cable companies that "don't play by the same financial rules".

LOS ANGELES - Over a Decade After Apple took over the music industry and Amazon upended retail, tech heavyweights have set their sights on a new realm ripe for change: live sports.

Emboldened by their deep pockets and eager to grow the audience for their streaming subscription services, Apple and Amazon have entered into negotiations for the media rights held by the National League of football, Major League Baseball, Formula 1 racing and college conferences.

They are competing to replace DirecTV for the rights to N.F.L. Sunday Ticket, a package the league wants to sell for more than $2.5 billion a year, about $1 billion more than it currently costs, according to five people familiar with the process. Eager not to miss out, Google also offered YouTube a bid for the rights from 2023, two people familiar with the bid said.

L Interest from tech companies is a thrill to sports leagues and a terror to media companies that fear competition from rivals raking in tens of billions of dollars from dominant positions in other companies. Last year, sports accounted for 95 of the 100 most-watched programs on television.

"It's tough when you're competing against entities that don't play not by the same financial system rules,” said Bob Iger, former chief executive and chairman of the Walt Disney Company, which controls ESPN, referring to tech company funds Sunday Ticket Package — which shows the Sunday off-market of the N.F.L. games that aren't aired on local television - is available because DirecTV chose not to bid. It lost up to $500 million a year on the package, although it also benefited from a base trusted network of around 2 million subscribers.

Apple is considered the frontrunner, according to a dozen people in the sports, media and entertainment industries. technology.But a final deal has been delayed by negotiations over a sale. simultaneous te of N.F.L. media assets, including the NFL Network, the RedZone Channel and NFL+, a new subscription service that provides access to live games on mobile devices.

Apple made getting the package a priority. Apple chief executive Tim Cook has met with league officials and influential team owners like Dallas Cowboys owner Jerry Jones and the Kraft family, owners of the New England Patriots, according to three people familiar with the process. . Apple declined to comment.

Yet Amazon, ESPN+ and YouTube, which explored a bid for the rights in 2014, remain in the hunt, some of those said people. N.F.L. director of media and affairs Brian Rolapp said in a statement that the league expects to finalize a deal in the coming months. "A number of companies are in a strong position to potentially land Sunday Ticket, but we still have some way to go in this process," Rolapp added.

Some details of the negotiations have already been reported by the SportsBusiness Journal.

Fans will still be able to access all games on Sunday regardless of who wins the rights, but they likely pay a premium to add the service to their Apple, Amazon, ESPN+ or YouTube service, some of the dozens said. It's not yet clear whether that premium would be higher or lower than the $294 charged by DirecTV for one year, they added.

Apple and Amazon are trying to get together position for a cable-free future. Since 2015, traditional pay-TV has lost a quarter of its subscribers — about 25 million households — as people swapped cable packages for apps like Netflix and Hulu, according to MoffettNathanson, an investment firm that tracks the industry.

But the price of live sports rights is only expected to rise. The biggest...