Facebook wants to be the number one platform when it comes to streaming Live sports – and for that, it’s willing to spend “a few billion dollars.”
It’s probably not news to you, but the big social platforms are competing fiercely to win the rights to broadcast live sports events. Not so long ago, Facebook spent over $600 million on a cricket deal. Imagine how much it would be willing to spend on soccer, the NFL, or the NBA.
The reason is very simple: Facebook wants you to stay on its platform, to be exposed to its ads. And in order to stay on its platform, it has to provide new things, and a great experience. I just watched the Champions League game featuring PSG (Paris) vs Bayern Munich on Facebook. And it was a great experience, I can tell you that.
Facebook is currently looking for an exec to negotiate sports rights deals. The successful candidate would have a budget of “a few billion dollars” to spend on global rights deals. Of course, that kind of money would not be spent outright. It would certainly be invested in multi-year deals. This is fairly common practice for TV rights.
For example, DirecTV agreed to pay the NFL $1.5 billion a year for the rights to its “Sunday Ticket” ticket package. That deal is reported to be over 5 years, for a total of $7.5 billion. Another example would be ESPN paying the NBA $2.66 billion a year.
And if there is one company that has the cash flow to enter into these kinds of deals, it certainly is Facebook.