It’s official. The NFL’s Sunday Ticket is coming to Google-owned YouTube. The agreement is a strong one for both the league and Alphabet (GOOGL), the parent company of Google and a Club holding. It’s not hard to see why the National Football League would want to distribute games with such an established streaming player like YouTube. The hope is to convert as many YouTube users into Sunday Ticket subscribers as possible, turning casual watchers into avid fans. For Alphabet, the deal adds a loyal viewer base to its vast ecosystem of services and products, providing a greater opportunity to collect user data and more effectively target advertisements. The seven-year deal is going to cost YouTube roughly $2 billion per year for the residential rights of the Sunday Ticket, CNBC reports . Since it started in 1994, the Sunday Ticket has been on DirecTV’s satellite service. The move brings another valuable sports property from a legacy platform to streaming. Amazon (AMZN) already has Thursday Night Football , while Apple (AAPL) previously secured the rights to Major League Baseball and Major League Soccer games. The Sunday Ticket/YouTube arrangement should also prove attractive for companies that advertise during NFL games because Alphabet can provide ad buyers with far greater data than they could have possibly had access to with untargeted, linear satellite distribution. What’s good for ad buyers is good for Alphabet as it will pull more advertising dollars into the company’s various offerings. It will also make YouTube’s premium offerings — a requirement to view the games — more attractive and consequently serve to boost subscription revenues generated from the platform. Subscription services are fast becoming the bread and butter of many large technology firms. Investors like the steady, dependable recurring revenue, especially at a time when online advertising overall has hit a rough patch against the difficult domestic and global macroeconomic backdrop. Alphabet’s third-quarter earnings and revenue, released back in October, were weaker than expected, due in part to a slowdown in ad spending . Bottom line Ultimately, we don’t think this Sunday Ticket deal alone is a real needle mover at the moment. But we do view it as an incremental near- to mid-term positive and potentially much more than that in the long term. As noted during Thursday’s “Morning Meeting” for Club members, monetization opportunities are not exactly clear beyond additional advertising and YouTube subscription revenues. But owning the rights to run Sunday NFL games will provide yet another way for Alphabet to draw in viewers and show off what else its ecosystem has to offer. (Jim Cramer’s Charitable Trust is long GOOGL, AMZN and AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
In this Oct. 4, 2020 file photo is an empty Levi’s Stadium before an NFL football game.
Tony Avelar | AP
It’s official. The NFL’s Sunday Ticket is coming to Google-owned YouTube. The agreement is a strong one for both the league and Alphabet (GOOGL), the parent company of Google and a Club holding.
