Verizon re-ups with NFL in OTT deal reportedly worth more than $2B

Football
The agreement extends Verizon’s current deal with the NFL, which expires at the end of the season. Image: NFL

Verizon continued its pursuit of digital media with a new pact with the NFL said to be worth more than $2 billion. And it will give up its exclusive rights to deliver the content to its wireless customers.

The nation’s largest wireless network operator garnered rights to distribute live pro football games on Monday, Thursday and Sunday nights—as well as postseason and Sunday afternoon games from customers’ home markets—through apps for smartphones and tablets. Verizon will air games through its own mobile network as well as through its Yahoo, Yahoo Sports ang Go90 platforms, making the content available to customers regardless of carrier.

Terms of the deal weren’t disclosed, but The Wall Street Journal reported Verizon will pay more than $450 million a year over five years in rights and sponsorship fees. The service will launch next month and essentially extends Verizon’s $250 million-a-year pact with the NFL, which runs through the current regular season.

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The move marks yet another big bet on Oath, Verizon’s digital media business that comprises properties such as AOL and Yahoo. Oath generated $2 billion in revenue in the company’s latest quarter, but many analysts question the viability of that business.

“We’re making a commitment to fans for Verizon’s family of media properties to become the mobile destination for live sports,” Verizon CEO Lowell McAdam said in a press release. “The NFL is a great partner for us and we are excited to take its premier content across a massive mobile scale so viewers can enjoy live football and other original NFL content where and how they want it. We believe that partnerships like this are a win for fans, but also for partners and advertisers looking for a mobile-first experience.”

Like AT&T, Verizon is looking to expand into digital media and advertising to offset slowing growth in the overall U.S. wireless market. The nation’s two largest carriers are looking to expand their content offerings and leverage data to deliver highly targeted ads to consumers across devices and networks.

“With this agreement, Verizon is giving up exclusivity to be the only mobile operator to offer NFL streaming rights,” Jennifer Fritzsche of Wells Fargo Securities wrote this morning in a note to investors. “In our view, this announcement seems to be more about developing its mobile advertising platform—which has clearly been a top focus for Verizon. Between all its mobile and digital properties, Verizon estimates it reaches more than 200 million monthly unique users in the U.S. With the recent consolidation of these properties in the Oath division, we would expect this to take on more of a growing focus for Verizon in 2018. Verizon has stated its goal for Oath to contribute ~$20 billion in revenue by 2020.”