AMZN - Free Report) looks like it could be the beneficiary of the fact that Disney ( DIS - Free Report) was forced to divest 21st Century Fox’s ( FOXA - Free Report) nearly two dozen regional sports networks as part of its $71.3 billion deal to purchase key Fox entertainment assets. The e-commerce powerhouse reportedly bid for all 22 networks, which include channels in New York and Los Angeles, and highlights Amazon’s ambition to be a streaming sports giant. Regional Sports Networks
Amazon bid for Fox’s 22 regional sports TV networks that Disney acquired in its deal, according to a
Tuesday. The 22 networks include New York-based YES Network, which is the New York Yankees’ television home, along with other major cities throughout the U.S. CNBC report
Amazon was not alone in its pursuit of Fox’s regional sports networks. Apollo Global Management, KKR & Co, The Blackstone Group, Sinclair Broadcast Group, and others made first-round bids. On top of that, the “New Fox,” which will be made up mostly of the Fox broadcast network and Fox News Channel, is also said to be in the running for the channels. Second round bids are expected to be submitted before the end of the year.
Jeff Bezos’ firm clearly seems committed to spend big to continue to pursue a sports-filled future since Guggenheim Securities
valued the regional networks at $25 billion. Yet, Disney was forced to pay a premium for the Fox assets after Comcast ( CMCSA - Free Report) drove up the price. This means that Fox’s RSNs could eventually fetch less on the open market.
VIDEO Amazon & Sports
Amazon dove into live streaming sports in a big way last year when it outbid other tech firms, which included the likes of Facebook (
FB - Free Report) , for the rights to stream NFL Thursday Night Football games. The cloud computing giant took over from Twitter ( TWTR - Free Report) after it paid $10 million to stream TNF for the first time during the 2016 season.
Bezos’ company signed a new, two-year TNF contract in the offseason. The deal is said to be worth about 30% more than the original one-year deal per season, which puts it at roughly
$130 million total.
Amazon Prime subscribers can stream at no extra cost 11 TNF games for both the 2018 and 2019 seasons, which are also broadcast by Fox on linear TV. Amazon and the NFL also allow Twitch users to live-stream these games for free, as both parties experiment with what might work best down the road.
On top of being part of by far the most popular sport in the U.S., Amazon has jumped into live tennis. More importantly, Amazon this summer won the exclusive rights for Premier League soccer games in the UK starting in the 2019 season. The three-year deal will see Amazon Prime live stream the first December midweek round and the festive bank holiday round of games, for a total of 20 games a season.
Amazon’s deal to stream the most lucrative soccer league in the world live in the UK, at no extra cost to users, is significant and could be a sign of much larger deals to come. The U.S. e-commerce firm beat out Sky Sports (
SKYAY - Free Report) and BT Sport, which have come to dominate Premier League coverage. For the non-soccer fans out there, imagine if a UK-based streaming service bought the exclusive rights to broadcast the NBA’s Christmas Day games or the NFL’s Thanksgiving games.
Along with streaming live games, Amazon rolled out its first sports documentary series in 2016 under its
All or Nothing banner. The Emmy-winning series has covered multiple NFL teams throughout the entire season since then, along with the Michigan Wolverines football team, as well as Manchester City—one of the biggest soccer teams in the world—and more. Bottom Line
The streaming TV age is already upon us and the cord-cutting revolution rages on. For instance, more than 1 million consumers canceled their cable-TV or satellite subscriptions in the past quarter alone, which was one of the
largest seasonal declines ever. Netflix ( NFLX - Free Report) , Hulu, and Amazon have all been some of the beneficiaries of this shift.
But, unlike Netflix, Amazon spent heavily on original content and made live sports a priority. As Apple (
AAPL - Free Report) and others jump into live streaming the companies will have to compete against each other for subscribers more than ever before.
It is worth remembering that Amazon last said it had more than 100 million Prime subscribers worldwide. Meanwhile, Netflix ended the quarter with 137.1 million subscribers. But Amazon saw its quarterly revenues jump 29% to $56.6 billion, while Netflix’s Q3 revenues surged 34% to hit $3.99 billion.
Therefore, Amazon’s ability to offer streaming movies, TV, and live sports, not to mention its shipping deals, could help it come out on top of the battle for streaming supremacy. And let’s not forget that advertisers are likely to flock to live sports more than ever as consumers spend more time on non-ad supported services like Netflix and Spotify (
SPOT - Free Report) .
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