NFL, RedBird Team Up to Distribute Sunday Ticket Games to Bars, Restaurants

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YouTube last year struck a seven-year deal with the NFL for residential rights to Sunday Ticket in a deal valued at $2 billion annually, but it didn’t acquire the commercial rights. Satellite broadcaster DirecTV previously had held the commercial and residential rights for Sunday Ticket for nearly three decades.

The Sunday Ticket commercial rights fees have been valued at $200 million annually, The Wall Street Journal previously reported. In addition to the rights fee, the NFL’s investment arm, 32 Equity, will take a stake in EverPass Media, the parties said. 

During negotiations with potential suitors for Sunday Ticket, the NFL decided it would be better to have a distributor devoted exclusively to commercial establishments—which display multiple games at once on various TV screens and are more in need of a wholesale provider than sports fans at home—according to Brian Rolapp, the NFL’s chief media and business officer. The platforms interested in Sunday Ticket didn’t have an established commercial footprint and expressed little interest in starting one from scratch, he said. 

EverPass Media is helmed by media veterans Derek Chang and Alex Kaplan, who will respectively serve as executive chairman and chief executive. Both Messrs. Chang and Kaplan worked at DirecTV and worked closely with the NFL on the Sunday Ticket franchise.

RedBird Capital founder and managing partner

Gerry Cardinale

is betting that the Sunday Ticket deal will lead to deals with other leagues and sports rights holders in need of commercial distribution partners, especially as more content such as Sunday Ticket migrates to streaming.

“This one is tailor-made for us,” Mr. Cardinale said in an interview. 

Besides the NFL’s Sunday Ticket on YouTube, other major sports migrating to streaming include college football, soccer, baseball, boxing and ultimate fighting. Streaming services such as

Walt Disney Co.

’s ESPN+,

Comcast Corp.’s

Peacock and

Paramount Global’s

Paramount+ are spending heavily on live sports as a means to grow subscribers.

For commercial establishments, the fractionalization of sports from broadcast and cable networks to streaming services presents potential challenges that EverPass Media is looking to solve by essentially creating a bundle of sports content through a single streaming platform.

“Having six different apps on three different televisions is not really a solution that scales,” said RedBird managing director Kevin LaForce. 

That will require potentially complex deal-making with other media companies to serve as the last-mile connector of content to establishments. Mr. Chang said EverPass should be seen as a “complementary part of this ecosystem,” which can “make the pie a lot bigger.”

RedBird Capital has a longstanding relationship with the league, most recently partnering with the NFL and Skydance Media on Skydance Sports, a production arm that will create sports-related content.

Neither the NFL nor EverPass is worried about commercial establishments simply trying to subvert their efforts by subscribing to YouTube themselves. About 80% of the commercial business for Sunday Ticket comes from 20% of its commercial-subscriber base, the NFL and RedBird said. That means a minority of large chains are its biggest users—which typically have as many as 20 televisions going at the same time showing various games.

“There would be bandwidth issues and latency issues” if a sports bar were to use a single, traditional streaming subscription, Mr. Kaplan said, adding that most of the commercial subscribers are “big organizations that are not going to steal the content.”

Write to Joe Flint at [email protected]

Alphabet Inc.’s

GOOG -1.65%

YouTube last year struck a seven-year deal with the NFL for residential rights to Sunday Ticket in a deal valued at $2 billion annually, but it didn’t acquire the commercial rights. Satellite broadcaster DirecTV previously had held the commercial and residential rights for Sunday Ticket for nearly three decades.

The Sunday Ticket commercial rights fees have been valued at $200 million annually, The Wall Street Journal previously reported. In addition to the rights fee, the NFL’s investment arm, 32 Equity, will take a stake in EverPass Media, the parties said. 

During negotiations with potential suitors for Sunday Ticket, the NFL decided it would be better to have a distributor devoted exclusively to commercial establishments—which display multiple games at once on various TV screens and are more in need of a wholesale provider than sports fans at home—according to Brian Rolapp, the NFL’s chief media and business officer. The platforms interested in Sunday Ticket didn’t have an established commercial footprint and expressed little interest in starting one from scratch, he said. 

EverPass Media is helmed by media veterans Derek Chang and Alex Kaplan, who will respectively serve as executive chairman and chief executive. Both Messrs. Chang and Kaplan worked at DirecTV and worked closely with the NFL on the Sunday Ticket franchise.

RedBird Capital founder and managing partner

Gerry Cardinale

is betting that the Sunday Ticket deal will lead to deals with other leagues and sports rights holders in need of commercial distribution partners, especially as more content such as Sunday Ticket migrates to streaming.

“This one is tailor-made for us,” Mr. Cardinale said in an interview. 

Besides the NFL’s Sunday Ticket on YouTube, other major sports migrating to streaming include college football, soccer, baseball, boxing and ultimate fighting. Streaming services such as

Walt Disney Co.

’s ESPN+,

Comcast Corp.’s

Peacock and

Paramount Global’s

Paramount+ are spending heavily on live sports as a means to grow subscribers.

For commercial establishments, the fractionalization of sports from broadcast and cable networks to streaming services presents potential challenges that EverPass Media is looking to solve by essentially creating a bundle of sports content through a single streaming platform.

“Having six different apps on three different televisions is not really a solution that scales,” said RedBird managing director Kevin LaForce. 

That will require potentially complex deal-making with other media companies to serve as the last-mile connector of content to establishments. Mr. Chang said EverPass should be seen as a “complementary part of this ecosystem,” which can “make the pie a lot bigger.”

RedBird Capital has a longstanding relationship with the league, most recently partnering with the NFL and Skydance Media on Skydance Sports, a production arm that will create sports-related content.

Neither the NFL nor EverPass is worried about commercial establishments simply trying to subvert their efforts by subscribing to YouTube themselves. About 80% of the commercial business for Sunday Ticket comes from 20% of its commercial-subscriber base, the NFL and RedBird said. That means a minority of large chains are its biggest users—which typically have as many as 20 televisions going at the same time showing various games.

“There would be bandwidth issues and latency issues” if a sports bar were to use a single, traditional streaming subscription, Mr. Kaplan said, adding that most of the commercial subscribers are “big organizations that are not going to steal the content.”

Write to Joe Flint at [email protected]