Why Amazon bought a piece of the Yankees' TV network
Posted August 30, 2019 3:50 p.m. EDT
CNN — Tech giants like Amazon have been jockeying over the last few years for the rights to livestream sports on their platforms. With a glut of streaming options available, people have fewer reasons to watch live TV. Sports is the valuable exception.
Amazon wants to come out on top in the era of cord-cutting and live sports is another way for the online retailer to incentivize consumers to sign up with Amazon Prime, the yearly subscription service that gives users access to free two-day shipping and other features that are otherwise not available, including Prime Video. The company has been investing more in Prime Video, which hosts exclusive, prestige content and livestreams of football, soccer, tennis and volleyball.
Now it appears that Amazon is ready to do more with live sports by taking on the biggest market in the country.
On Thursday, Amazon secured rights to the YES Network, the country's most-watched regional sports network. It's the home to live games and programming focused around New York teams including the Brooklyn Nets, the WNBA's New York Liberty and most importantly, the New York Yankees. Amazon's stake in YES is small but meaningful because the Bronx Bombers are more than just a regional team. With star players like Aaron Judge and 27 World Series championships, the Yankees are an iconic global brand.
Amazon executives spoke about their ambitions in live sports at the Hashtag Sports conference in New York City in June. Felicia Yue, senior manager at Amazon Prime Video, positioned the company as a perfect destination for sports viewing in the cord-cutting era.
"As everybody knows, the younger generations are all about streaming. They don't have a cable package. They aren't going to turn on a Fox package, but they might turn on Thursday Night Football on Amazon," Yue said at the conference.
Amazon revealed its interest in live sports in 2017 when it partnered with the NFL to stream "Thursday Night Football," making that season's games available to anyone with an Amazon Prime subscription. The one-year deal included 10 games and cost Amazon $50 million. The NFL renewed the deal with Amazon for the 2018 and 2019 seasons.
Amazon has also offered programming from other sports leagues. In the US, Prime Video also livestreams professional volleyball with the AVP league and the Laver Cup tennis tournament. In the U.K., Amazon also has exclusive rights to the 2019 US Open tennis tournament as part of a five-year deal. Starting this December, Amazon will offer 20 Premier league games.
That shift away from cable but continued interest in sports is true, said Brandon Brown, a clinical associate professor of sports management at New York University.
"I think this is a big step by Amazon, one that I think shows their belief in future sport consumption habits amongst younger audiences," Brown said.
NYU's Tisch Institute for Global Sports has conducted research that shows that while some reports suggests that Gen Z's interest in live sports is waning, they are still passionate about it.
"False beliefs about Gen Z and a lack of interest in sports, particularly baseball, may be based on non-relevant metrics, when perhaps the generation is seeking a more relevant consumption medium," Brown said. "I think Amazon understands these passion levels and are looking to use a medium which can speak to them."
This deal with YES, in which Amazon reportedly gets 15% and the right to buy more, comes shortly after Sinclair purchased 21 regional sports networks from Disney, valued at $9.6 billion. CNBC reported at the time that Amazon was bidding on those networks as well. Research firm MoffettNathanson valued the regional sports networks at about $23 billion in 2017. If Amazon had acquired all 22 of the networks, it would have been its largest acquisition ever.
Amazon declined to comment on this story.
Of course, Amazon isn't the only tech giant that has sought to upend the TV industry and make video easier to watch online. Amazon, for its part, has invested in making sports consumption from traditional cable networks through personalization and interactivity.
For Thursday Night Football, Amazon offers several different feeds for commentary. Andrea Kremer and Hannah Storm host the main English-speaking broadcast for the U.S. Then there's a U.K. English feed led by commentators Tommy Smyth and Derek Rae. Amazon also has Spanish- and Portuguese-language feeds. Amazon also offers a version of Thursday Night Football on Twitch, its streaming platform for gamers.
For interactive viewing, Amazon deploys its X-Ray feature, which overlays videos with additional information in real-time such as live statistics during games.
"For decades we've had this one size fits all of production," said Yue at Hashtag Sports. "We have unlimited shelf space, because we're not constrained to the model that we have a channel. We can let you a sports fan engage the way you want to."
If Amazon's goal is to become an authority in live sports events, it will have that opportunity in the coming years. The broadcasting rights for the NFL, arguably one of the most popular leagues globally, are up for grabs in 2021 and 2022.