Google's YouTube TV won exclusive rights to show live games of a Major League Soccer expansion team in Los Angeles — the first time a streaming video service has made such a deal with a U.S. team instead of a traditional TV broadcaster, Variety reported. YouTubeTV also received naming rights on jerseys for the team that joins the league next month.
The Los Angeles Football Club's owners include media mogul Peter Guber, retired basketball player Magic Johnson and actor Will Ferrell. About 18 games will be exclusive to a YouTube TV channel that can only be seen by subscribers in the Los Angeles market. Half of the games will be nationally televised by ESPN or Fox Sports 1.
YouTube TV subscribers, who pay $35 a month for a base package of more than 40 channels through a web-connected TV, won't be charged additional fees for access to the games. Financial terms of the multi-year deal were not disclosed.
Google's YouTube TV was started with a mobile-first strategy last April, recognizing that more than half of YouTube viewers watch video content on a smartphone or tablet device. The service is aimed at the younger generation of cord cutters who are abandoning bloated cable TV plans in favor of "skinny bundles" of channels and video-on-demand services such as Netflix, HBO Go and Hulu. Rival services to YouTube TV include AT&T’s DirecTV Now, Sony's Playstation Vue and a new offshoot of Hulu.
YouTube TV's deal with the Los Angeles Football Club is groundbreaking for being the first time a streaming service has exclusive broadcast rights to a professional sports team, and may herald their growing financial power to bid for live sports programming. Amazon and Twitter are among the tech giants that have bought streaming rights to professional sports programming, while TV rights went to a traditional broadcaster. Facebook last year bid for streaming rights to an Indian cricket league, but 21st Century Fox's Star India secured both streaming and broadcast rights.
The social network last month hired Peter Hutton, the former CEO of Eurosport, to oversee its sports programming, Variety previously reported. Facebook has a budget of a "few billion dollars" for live sports, Recode reported late last year. For marketers, this considerable ramp-up in digital sports streaming content among the major digital advertising platforms could present considerable opportunity, especially as TV ratings continue to decline. The North American sports media market is set to grow at a compound annual rate of 3% through 2021 across segments of media rights, PwC forecast last year. Revenue overall could rise from $69.3 billion this year to $78.5 billion in 2021, the group said.
The YouTube TV deal with the Los Angeles Football Club may also indicate that sports teams will choose streaming services instead of traditional local partners like affiliate stations or regional sports networks. Basketball-team owners including Steve Ballmer (Los Angeles Clippers), Paul Allen (Portland Trailblazers) and Ted Leonsis (Washington Wizards) have talked about owning their own TV rights and self-distributing on the internet, per Variety. Traditional broadcasters still have a lot of spending power, but the trends in cord-cutting and mobile video may shift that balance of power in the coming years.