Multiple sports, North America

The Long Read: Is Amazon primed for a sports rights bonanza?

It has been an inevitability for years, but finally it appears Amazon is getting serious about sport.

by Michael Long
The Long Read: Is Amazon primed for a sports rights bonanza?

It has been an inevitability for years, but finally it appears Amazon is getting serious about sport.

A report by Bloomberg last week added further weight to longstanding speculation that the Seattle-based online retail juggernaut is stepping up its pursuit of live sports rights. According to the report, which cites ‘people with knowledge of the matter’, Amazon executives have been in talks over acquiring streaming rights to the French Open tennis tournament and elite professional rugby, while other sports ‘with global appeal’ like soccer, golf and motorsport, plus popular US staples like baseball and basketball, are also said to be on the company’s radar.

Though the progress of the talks is unclear, Bloomberg’s report will come as a surprise to nobody. Rumours that Amazon is plotting to enter the sports rights marketplace have been swirling about the industry for some time, and its long-mooted interest in live content is, by now, old news. 

This year, however, the world’s largest online retailer has shown it means business. In an effort to lure more customers to its Prime Video subscription service, which offers unlimited streaming of on-demand TV shows and movies for US$99 a year, the company is reportedly doubling its content spend in the second half of this year compared to the same period for 2015. Its aim, say those in the know, is to create a go-to destination for cord-cutters who are shifting their subscription dollars away from cable TV operators, and to that end it was only a matter of time before sport - that advertiser-friendly, live TV ratings trend-bucker so coveted by media companies - became part of the equation.

Still, the company’s sports strategy remains something of a mystery, particularly given its efforts to date give few clues as to what its plan might be. 

Amazon has, in recent months, enlisted high-level expertise to help realise its ambitions in sport. In March, the company quietly installed James DeLorenzo, a veteran sports media executive formerly of CBS and Sports Illustrated, as head of sports for Amazon Video Channels. Former YouTube executive Charlie Neiman joined the company in May, tasked with overseeing sports partnerships and business development, while a job advertisement for the role of ‘principal content acquisition manager - sports’ appeared online several months ago.

As for its moves in the rights business, there has been little to shout about thus far. An unsuccessful US$15 million bid for the digital rights to the NFL’s Thursday Night Football - rights that were ultimately won by Twitter with a lesser offer of US$10 million - was followed up in June with a deal for the Bundesliga’s digital audio rights in Germany. Other than that, sports programming of the non-live variety has come in the form of original documentary series like ‘All or Nothing’, which followed the Arizona Cardinals’ 2015 NFL season and debuted on Amazon Video this summer, and ‘Novak’, a recently announced run of shows charting tennis star Novak Djokovic’s 2017 campaign. 

Former CBS and Sports Illustrated James DeLorenzo is heading up Amazon Video Channels' sports division.

The question, then, is what comes next. According to Bloomberg’s sources, Amazon has had internal discussions about amassing enough live sports content to develop a separate sports offering. Such an offering would certainly set the company apart from its online video rivals like Netflix and Hulu, both of which have so far stuck to on-demand content rather than appointment-to-view programming, and would appear to align with last October’s acquisition of Elemental Technologies, the self-proclaimed ‘leading supplier of software-defined video solutions for multiscreen content delivery’.

Yet it won’t be easy for Amazon to procure the quality and quantity of live content that might be necessary to get sports fans to part with their money. As Bloomberg notes, many of the major leagues in North America are tied into lucrative and lengthy contracts with national broadcasters. Amazon, like other cash-rich tech giants with an eye for sport, will have to bide its time or, at the very least, find creative ways of skirting the restrictions and blackouts those contracts entail. That many rights holders now operate their own over-the-top (OTT) offerings only complicates the matter further - although Amazon could be looking to offer those services as add-ons to Prime Video, as it already does with CBS-owned Showtime, rather than competing with them directly.

That remains to be seen. In the absence of any official word from Amazon, there is no way of knowing exactly what the company’s ambitions in sport are. But if, as assumed, it sees sport as a means of drawing new members to Prime, there is already evidence to suggest it will not stop at streaming rights.

In July, reports in Spain revealed Amazon executives were in advanced discussions to replace Qatar Airways as FC Barcelona’s principal sponsor, a coveted position that is now one of the most expensive of its kind in world soccer to obtain. Though Qatar Airways ultimately renewed for another year shortly before the start of the new season, talks between Barca and Amazon are said to be continuing. Were a deal to materialise, the rights it includes and the way it is activated should shed more light on the company’s future plans.

On the other side of the Atlantic, meanwhile, a further intriguing development came last week when the NFL’s San Francisco 49ers announced a ‘first-of-its-kind’ partnership with Amazon that would allow the team’s fans attending 'tailgate' parties outside Levi's Stadium to order food, drinks and other products for delivery within the hour through the Amazon Prime Now service. Given the company’s recent investments in logistics and its ongoing trials of drone deliveries, that partnership could well be a sign of things to come.

Amazon is, of course, a unique business in both size and scale. Its vast resources and unparalleled e-commerce capabilities would certainly present rights holders with a wealth of opportunities not offered elsewhere, even if its live sports streaming service initially lacks the reach and subscriber base of others on the market. Should the company decide to get into sport in a big way, there will be no shortage of suitors looking to initiate discussions.

Michael Long (@_MichaelLong) is SportsPro's Americas editor and this is his weekly column.