NEW YORK – Even if they don’t make the playoffs, the Buffalo Bills are assured of making history this year.
Yahoo announced Wednesday that it had struck an exclusive deal with the National Football League to host the first free live global webcast of a regular-season game, the Oct. 25 matchup between the Bills and the Jacksonville Jaguars, which will be played in London and streamed live at 9:30 a.m. EST.
While games, including the Super Bowl, are often streamed, this is the first time that viewers won’t be charged, and it will be available around the world.
The move underscores the changing nature of telecasts and illustrates the growing shift of premium content to the Internet.
“We see more and more of our fans spend more time on digital platforms,” said Hans Schroeder, an NFL senior vice president. “We want to evolve with the landscape.”
The NFL and other content providers are looking for new ways to broaden their audiences as more consumers reach for smartphones or turn on digital set-top boxes instead of tapping broadcast or cable channels. Services such as Netflix, Google’s YouTube and Facebook have drawn hundreds of millions of users, threatening traditional media companies.
For the NFL, the streamed game is an experiment to understand the complex economics of digital streaming and gauge the audience for watching U.S. football in the rest of the world.
For Yahoo, winning the digital rights to the popular game is a rare victory against more successful rivals such as Google and Facebook, which compete with it for attention and advertising revenue.
The NFL deal could give Yahoo an inside track in future negotiations if the league expands the number of games that it streams.
“You’re seeing where the world is going and how and where people are getting their content,” said Schroeder, the NFL’s senior vice president for media strategy, business development and sales. “Over a longer period of time, there will be different parties that want to get into the sports distribution business.”
Yahoo and the NFL declined to disclose how much Yahoo had agreed to pay for the digital rights.
However, Ed Desser, a sports media consultant, said he believed that the league would receive a seven-figure fee from Yahoo. “The NFL didn’t get where it is by giving things away gratis,” he said.
Adam Cahan, the Yahoo senior vice president who oversees video and several other emerging businesses, said that under the deal, his company would sell TV-style video ads and sponsorships around the game and keep the revenue.
He said that if the NFL experiment was successful, Yahoo could try to expand further into live sports. “It’s an area that could be truly exclusive and unique and differentiated,” Cahan said. “If you look at platform shifts historically, many of them have been defined by sports rights.”
Yahoo, whose sports sites remain very popular, will show the Bills-Jaguars game free to football fans around the world. Viewers will be able to watch via smartphone, computer, game console or smart TV.
The game will also be broadcast on television in the Buffalo, and Jacksonville markets and shown on Sky’s cable network in Britain. Rights in China will be sold separately, the NFL said.
For the NFL, the long-term question is how to generate more revenue from streaming games without cannibalizing its very lucrative broadcast deals. The foray with Yahoo may be a way of prompting the networks to pay more for rights fees that include streaming rights in the future.
“Is this an effort to eventually create a bidding competition for streaming rights to NFL games? I would suspect yes,” said Neal Pilson, a media consultant who was president of CBS Sports for 14 years. “But I’m convinced they won’t take any steps that imperil or dilute their current TV arrangements.”
Schroeder said the NFL chose Yahoo as a partner because of its connections to advertisers, its wide reach of a billion users worldwide and its technical ability to handle a large number of simultaneous viewers.
Although the league has offered overseas fans the ability to buy a digital subscription to a season’s games for several years, that viewership is small compared with what the free game is expected to draw.
The digital distribution rights to many NFL games are locked up until 2022 and 2023, Schroeder said, but the league is on a year-to-year contract with CBS for Thursday Night Football and is considering whether to open streaming of those games to new partners.
“We’ll see,” he said. “We’ll know a lot more after we do this test with Yahoo.”
It’s a real kudo for Yahoo, a company that’s trying to regain its confidence,” said Brad Adgate, senior vice president of research at Horizon Media. “It will really help them do a lot of promotions for their other content, like for Katie Couric.” Couric is the Internet company’s global news anchor.
Marissa Mayer, Yahoo’s chief executive, personally wooed the NFL’s commissioner, Roger Goodell, during the negotiations, according to people at both organizations. Under her leadership, Yahoo has been trying to vastly expand its exclusive video content as it seeks to grow its user base and rebuild its weakened business.
Football rights are the most lucrative property in the U.S. television market. The Super Bowl is the most-watched program in the country each year – more than 114 million people tuned in to this year’s championship game between the New England Patriots and Seattle Seahawks.
That massive audience doesn’t come cheap for broadcasters. ESPN pays the NFL $1.9 billion a year to carry games and highlights, while Fox, CBS and NBC all pay upwards of $900 million. CBS will pay $300 million this year to broadcast just eight Thursday games.
Pundits have long speculated that a technology company with media assets, such as Google or Netflix, might bid for NFL broadcast rights. Yet Netflix executives have repeatedly said the company isn’t interested in sports, while Google has limited itself to hosting highlights and clips in its search results and on YouTube.