Why Google Shouldn’t Do an NFL Touchdown Dance Just Yet

It's unlikely that any tech company will win the deal

   

The media has been in a tizzy over the potential partnership between Google (GOOG) and the National Football League, but Commissioner Roger Goddell isn’t planning to limit his Silicon Valley agenda to just meeting with the search giant.

Instead, veteran tech analyst Rob Enderle expects Google’s archenemy Microsoft (MSFT) to also make a play for the NFL’s Sunday Ticket currently being shown on DirecTV (DTV).

The company is due to release the much-anticipated Xbox One in November, and the device is a comprehensive entertainment center — not just a gaming console. Moreover, the company — whose CEO Steve Ballmer just announced he will retire within the next year — probably wants to go after pro football programming just to keep out of the clutches Google.

And with a market cap north of $280 billion, along with over $80 billion in cash and short-term equivalents, the company certainly can afford to make a run at the NFL. And such a bold move could give the software giant’s lackluster stock price a jolt similar to the one it got today on news of Ballmer’s departure.

Still, neither tech company should do a touchdown dance just yet.

CNBC recently reported that the NFL has held discussions with DirecTV about renewing the deal — a deal that has thus far yielded benefits to both parties. Plus, Mark Cuban noted in an interview with AllThingsD that broadcasting the NFL over the web won’t be easy, even though it is technologically feasible. Cuban was an early pioneer in web-based video.

He told the site:

“That is going to eat up a lot of resources, and it’s going to be difficult to do much quality of service. It’s one thing to originate it and distribute it. It’s another to make sure that every peered Internet provider will get it to the home at a quality Google wants it delivered.”

Plus, there are many other tech companies with dreams of gridiron glory.

Intel (INTC), which is developing a set-top box alternative like Microsoft, could also be a player for the NFL … although Enderle expects the chipmaker to partner with Google if talks for the NFL get serious.

Another potential entrant in this battle could be Apple (AAPL), which reportedly is trying to get content providers to embrace an Apple Television that would access content via apps instead of a set-top box. If Apple’s content ambitions are as grand as Quartz recently described, surely it would want access to the popular professional sport.

Plus, while they probably aren’t keen on broadcasting games live, both Amazon (AMZN) and Netflix (NFLX) might want to add sports content to their programming line-ups, according to Enderle. Both are also trying to drive a stake into the heart of the pay TV programming industry.

Of course, competition from other tech companies probably won’t be the problem for Google in the end.

Instead, incumbent television networks and cable channels are going to fight hard for NFL programming. As I recently argued, the fight for “Sunday Ticket” might be the nudge needed to get DirecTV and Dish Network (DISH) to finally merge. On its own, DirecTV will find it difficult if not impossible to afford the exponentially larger fees that the NFL is sure to demand for its valuable programming.

The bottom line: These tech companies are only in the pre-season in their dealings with the NFL … and a potential touchdown is years away.

Jonathan Berr also writes for MSN, which is owned by Microsoft. As of this writing, he did not hold a position in any of the aforementioned securities.. Follow him on Twitter @jdberr.


Article printed from InvestorPlace Media, http://investorplace.com/2013/08/nfl/.

©2014 InvestorPlace Media, LLC

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