Google-NFL: Head fake, or real deal?

The sports and technology worlds were abuzz this week over a report that Google CEO Larry Page and YouTube content chief Robert Kyncl recently met with a group of NFL officials led by commissioner Roger Goodell to discuss…well, something.
Speculation immediately focused on “NFL Sunday Ticket,” the out-of-market games package that is currently available exclusively from DirecTV. The current deal expires at the end of the 2013 season, however, creating an opening for someone else to step in and take the ball away from DirecTV if that someone is willing to spend enough money. And one thing Google has plenty of is money.
DirecTV has leveraged its NFL deal effectively over the years. Just to get access to the $240 per year “Sunday Ticket” package, football fans first had to buy a dish and commit to a two-year service contract with the satellite provider. Though DirecTV reportedly lost money on the deal, given its $1 billion price tag, it helped to build the satellite company’s subscriber base and put it on the map with respect to cable providers. The deal has also been an effective competitive wedge against rival satellite operator Dish, and in 2011 DirecTV began making “Sunday Ticket” available online, giving it at least the foundation of an broadband play.
Google, of course, has been looking for a way into the TV business for years, and currently is in talks with programmers about linear streaming rights for a virtual, over-the-top pay-TV service. What better way to put itself on the map as a pay-TV provider that to follow DirecTV’s playbook by taking “NFL Sunday Ticket” away from DirecTV?
Others are skeptical that the NFL would ever make “Sunday Ticket” available exclusively online, however. The NFL is just “trying to gin up potential bidders; the cable guys have already circled [“Sunday Ticket”] the last two times,” one network source told the New York Post. “They’ve gotten to the place where it’s not worth it to buy it exclusively.” Added ESPN president John Skipper, “They [sports leagues] all love to float the idea [of going over-the-top] because there will be more competition for rights.”
So which is it, NFL head fake, or a real bid by Google?
Perhaps neither. The involvement of YouTube in the discussions suggests a third possibility.
Putting “NFL Sunday Ticket” on YouTube wouldn’t really do much for Google’s broader OTT ambitions. YouTube, by design, is an open, non-exclusive platform available around the world to anyone with internet access; putting “Sunday Ticket” there would actually undermine Google’s efforts to sell a bundled package of channels for its virtual pay-TV service.
It wouldn’t do much for YouTube, either. Verizon Wireless controls mobile streaming rights for NFL games, so YouTube would be foreclosed from the fastest growing segment of the web content business. More critically, turning YouTube into a mere re-seller of existing linear content would seem to run counter to the company’s current strategy. As was clear from this spring’s NewFront’s presentations, Google is trying to position YouTube as a platform for original content creation, not as a linear distribution platform.
It seems far more likely that what Google, YouTube and the NFL are talking about is a deal to develop new original content to supplement live game broadcasts. It’s not hard to imagine the NFL becoming a multi-channel network on YouTube, with a channel dedicated to each of the 32 teams in the league and featuring coverage from mid-week practices, inside the locker room, chats with players and coaches, perhaps even second-screen content during game broadcasts, along with highlights from previous games.
That would give the NFL a live video presence throughout the week, rather than just on Sunday and Monday nights, create new advertising inventory and give out-of-market fans a up-close look at their favorite teams. At some point, the NFL’s YouTube network might also offer live game streaming. But there’s a lot the league could do on YouTube before it gets to that point.