The NFL sends Sunday Ticket negotiations with Apple and Google into overtime

National Football League commissioner Roger Goodell, who flew to Sun Valley, Idaho this summer for Allen & Company’s annual media conference, is confident the NFL is close to announcing its latest blockbuster TV rights deal.

“We’ll probably make some decisions in the fall,” he told CNBC at the time.

But nearly five months later, the league is still looking for a technology or media company willing to replace DirecTV as the rights holder for Sunday Ticket, which allows fans to watch every NFL game not broadcast in their region. Talks are now expected to extend into next year, according to five people familiar with the talks.

Sunday’s ticket negotiations were closely watched by analysts and executives. Live sports, especially NFL games, are one of the last remaining staples of traditional television. Who the winning bidder is, how much it pays and how the deal is structured will have seismic implications for the sports, media and technology industries.

Bidding for Sunday Ticket’s prized game package could set a precedent for how much tech companies like Apple and Google are willing to pay to take viewers away from traditional TV companies, which still rely solely on subscription fees and advertising to stay afloat.

The competitive landscape for Sunday tickets has changed as negotiations have dragged on, people familiar with the negotiations said. Sports and media executives have long considered Apple the front-runner, with some involved in the bidding process saying they thought the tech giant had reached a deal.

But in the absence of a deal, Google has stepped up its pursuit, aiming to win the package for YouTube TV, the company’s streaming-cable service, the four people said. Other interested bidders include Amazon and Disney’s ESPN.

Robert Kinkle, YouTube’s chief business officer, played a key role in Google’s pursuit. Although he will take a new job early next year as chief executive of Warner Music Group, Mr. Kinkle has pledged to work with YouTube to see the deal through, three people familiar with his priorities said. He has ties to Brian Rollapp, the NFL’s chief business officer, who worked with Mr. Kinkle during Google’s unsuccessful bid for Sunday Tickets in 2013.

The league’s talks with Apple, Google and others have been protracted as it tries to bundle a package of out-of-market Sunday NFL games with other media assets, including NFL Network and the NFL RedZone channel, according to these people.

Last year, the NFL hired Goldman Sachs to help sell a stake in that media business. The decision was driven in part by the league’s recognition that The Sunday Ticket competes for subscribers with the RedZone channel, which leads between live Sunday football games and teams close to scoring touchdowns.

By seeking investors in those channels and other media businesses, the NFL must discuss forming a joint venture with an investment partner that would likely seek a voice in the operating structure of the co-owned company, these people said.

A media executive who has negotiated with both Apple and the NFL pointed to another reason for the months-long standoff: Both sides are used to getting their way in negotiations.

nfl, Apple, Amazon and ESPN declined to comment. Google did not immediately comment.

The league is seeking more than $2.5 billion annually, a $1 billion increase from the current eight-year deal, which expires at the end of this season. It wants a long-term partner for the rights, having locked up its marquee packages last year for Thursday, Sunday and Monday games with an 11-year deal.

The slowing economy could pose another challenge for the NFL as it tries to close a contract that could exceed $10 billion over its lifetime. Tech and media companies alike are under pressure from Wall Street and investors to cut staff and control costs, a reversal after years of spending cuts.

The recession helped some Wall Street analysts with Amazon’s $1 billion-a-year deal for “Thursday Night Football.” Tom Fort, an analyst at DA Davidson, an investment bank, said he was skeptical the company would bring in enough new Amazon Prime members or advertising revenue to cover its costs. He added that Amazon’s struggle to make money meant a serious bid for Sunday tickets was unlikely.

“At a time when tech companies are tightening their belts, it would be surprising to see Amazon spending more on the challenges they already have for NFL rights,” Mr. Forte said.

There is similar skepticism about the effectiveness of the bid from ESPN. Rich Greenfield, an analyst at Lightshade Partners, said Robert Iger’s return as chief executive made Disney, which owns 80 percent of ESPN, more likely to cut costs or sell ESPN. He cited Mr. Iger’s comments at a conference hosted by Vox Media in September, when he said he was “not bullish” on some traditional media businesses.

Google has faced pressure to cut costs and thin its ranks. After reporting in October that sales on YouTube and search were slowing, Google executives pledged to cut hiring in half and cut costs.

But Mr. Kyncl said cutting a deal for Sunday tickets would not be subject to company belt-tightening, two people familiar with his thinking said. He says it would be a good investment because of the YouTube TV subscribers it would provide, which could compete with the roughly two million subscribers that DirecTV credits in its current Sunday Ticket deal.

Apple may have avoided a downturn in its business for most of the year, but the Covid-19 outbreak at its largest iPhone factory in China has derailed production and could reduce its sales over the Christmas holiday. Still, Apple CEO Tim Cook says he believes in investing through recessions, and a decade-long deal with the NFL fits that philosophy.

The NFL aggressively pursued Apple as a Sunday ticket partner earlier this year because it didn’t have a major business relationship with the tech giant, three people familiar with the discussions said. But the urgency cooled after the league struck a deal this fall to have Apple sponsor the Super Bowl halftime show.

With Sunday Ticket negotiations deadlocked, the NFL focused on a separate search for an independent studio that could help produce and distribute football-related films alongside the league. NFL Films, which makes documentaries and other shows, made an offer that drew interest from bidders including Sony, A24, North Road and Skydance, the studio that co-produced “Top Gun: Maverick,” according to two people familiar with the search. .

Mr. Rolap, who led negotiations for the league, met with bidders in recent months and settled on Skydance Sports, which will team with the NFL to develop and distribute film and TV projects. One of the NFL’s biggest objectives is to market the sport by reaching younger audiences and viewers outside of the United States.

The contract work took the league’s focus away from Sunday ticket negotiations, some of these people said. Only a handful of top NFL executives are involved in media discussions, making it difficult for the league to fully engage in multiple simultaneous discussions. Now that Skydance has been selected, the league is expected to return to Sunday ticket negotiations.