Amazon's Billion Dollar Thursday Night Football Deal Is Off To A Good Start
Amazon's Billion Dollar Thursday Night Football Deal Is Off To A Good Start
Amazon's Billion Dollar Thursday Night Football Deal Is Off To A Good Start
If you are not a subscriber of Huddle Up, join 64,000 other professional athletes, business executives & casual sports fans that receive it directly in their inbox each morning — it’s free.
This Email Is Sponsored By…
LMNT has been my cheat code over the last several months.
It’s a simple electrolyte drink mix that you stir into your water. It provides all the sodium, potassium, and magnesium you need to attack the day, without all the bad stuff—sugar, artificial ingredients, or preservatives.
I drink it every morning, and it helps me maintain my hydration levels throughout the day, especially during the hot summer months. But here’s the best part: LMNT is offering Huddle Up readers an exclusive deal; order today and get a free sample pack with any purchase. So check ‘em out, and let me know what you think!
Hey Friends,
More than 18 months ago, the NFL agreed to an 11-year deal to exclusively air Thursday Night Football on Amazon Prime Video for $1 billion per season, making it the first deal that put all NFL games on a single streaming platform.
Amazon then quickly put together an all-star team. They signed Al Michaels away from NBC Sunday Night Football (where he worked for 16 seasons) for $15 million per year to do play-by-play and paired him with Kirk Herbstreit as the color commentator for $10 million per year.
Amazon also brought on Charissa Thompson, Tony Gonzalez, Andrew Whitworth, Richard Sherman, and Ryan Fitzpatrick for their studio team, then added Taylor Rooks as its feature reporter, Terry McAulay as its rules analyst, and Kaylee Hartung as its sideline reporter.
They even struck a deal with the YouTube channel “Dude Perfect” to host alternate broadcasts of TNF games geared toward younger viewers.
Still, many people were curious about how this would go. The NFL had never done an exclusive deal with a streaming platform, and although many people will admit we are heading in that direction, it still felt slightly early to go exclusive.
But the (early) results are in, and they look promising—both for the NFL and Amazon.
Amazon (with assistance from Nielsen) is reporting that the debut TNF game between the Kansas City Chiefs and Los Angeles Chargers drew 11.9 million streaming viewers.
And when you add in local TV broadcasts, Twitch, bars and restaurants, and NFL+ viewers, the total viewership rises to 15.3 million, making it the most-watched show for the night of September 15th.
Amazon TNF Debut Viewership (Chiefs vs. Chargers)
Streaming viewers: 11.9 million viewers
Streaming + local broadcast: 13 million viewers
Streaming, local broadcast, Twitch, bars/restaurants, and NFL+: 15.3 million viewers
These numbers are significant because Amazon reportedly promised advertisers 12.5 million viewers per game, despite many people thinking 5-7 million was a much more realistic target.
But I would argue that number isn’t all that important for Amazon. Sure, the average price for a 30-second commercial during an NFL regular season game is roughly $400,000, and Amazon will surely look to recoup a sizable portion of its $1 billion annual investment via advertising partners.
Still, I think it’s clear Amazon’s real focus is recurring revenue. For example, according to a company memo, Amazon says the first TNF game resulted in more Prime membership signups during a 3-hour period than any time in the company’s history, including Prime Day, Black Friday, and Cyber Monday.
This is important for several reasons. First, Amazon collects $139 per year from each Prime member. But more importantly, this membership commitment drastically changes a consumer's behavior in their ecosystem.
For example, the average prime member spends $1,400 per year on Amazon, compared to less than half of that ($600 per year) for non-prime members.
Amazon Prime Membership Monthly Spend
31% of U.S. Prime members on average spent $51 to $100 a month on Amazon
26% spend less than $50 a month
23% spend $101 to $200 a month
13% spend $201 to $500 a month
4% spend $500 to $1,000 a month
2% spent over $1,000 a month
Of course, retention is tricky, and not all of these people will become loyal Amazon Prime members for life. But institutional investors typically assign a 10-15x valuation multiple on recurring revenue at a company like Amazon, so don’t be surprised when this deal looks like a bargain in just 2-3 years.
I hope everyone has a great weekend. I’ll talk to you on Monday.
Enjoy this content? Subscribe to the Huddle Up YouTube Channel.
Your feedback helps me improve Huddle Up. How did you like today’s post?
Loved | Great | Good | Meh | Bad
How AC Milan Became A Billion Dollar Club | Casper Stylsvig
Casper Stylsvig is the Chief Revenue Officer at AC Milan. We discuss the club being acquired for $1.3 billion by RedBird Capital, why the New York Yankees wanted to become minority investors, the future business model for football clubs globally, where the plan currently sits for their new $1 billion stadium, why US expansion is necessary, and much more. Enjoy!
The full interview is also available on Apple and Spotify.