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Report: YouTube to pay $2.5 billion per year for Sunday Ticket

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As explained in Playmakers, the Janet Jackson incident at Super Bowl XXXVIII — and the curiosity of those who missed it live — helped provide the spark for the creation of a video-sharing service known as YouTube. Nearly 20 years later, YouTube and the NFL will be doing a significant piece of business together.

As reported last night by multiple outlets, and as PFT has confirmed, YouTube is closing in on a deal for Sunday Ticket, the out-of-market package that DirecTV has exclusively broadcast since 1994, when it debuted. John Ourand of Sports Business Journal reports that YouTube will pay $2.5 billion per year for the package.

Talks with Google (the YouTube parent company) accelerated after Apple dropped out. Amazon was also involved; however, Ourand reports that Amazon “never got close” to the amount Google/YouTube will pay.

The Sunday Ticket package will be available on YouTube TV and YouTube Premium channels, if/when the deal is done. The price will be similar to the current DirecTV charge. That reportedly became the sticking point for Apple, which wanted to make the product less expensive for consumers.

As Alex Sherman of CNBC.com reported in June, the NFL’s deals with CBS and Fox prevent the NFL from offering Sunday Ticket at a significantly lower price. This helps maximize viewership of the games offered by CBS and Fox in a given market, by keeping people from purchasing the ability to watch all games.

Don’t get mad at CBS or Fox or YouTube about this. The NFL could have taken less from CBS and Fox in order to secure the ability to sell Sunday Ticket for less. The league, taking full advantage of its broadcast antitrust exemption, maximized the revenue from all broadcasters while also making it more expensive for average fans to watch the games they want to watch.

Basically, Apple wanted to buy the package and make it cheaper for fans. The NFL said no, no, no.

So ho, ho, ho. Merry Christmas.

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