Amazon's (AMZN) Premier League Deal Should Scare TV & Streaming Giants

Amazon (NASDAQ:AMZN) just secured the live rights for a small, but very important number of Premier League soccer games starting in the 2019 season. The move is part of a slow, methodical effort by Amazon to build up its live sports offerings, which has long been the last great hope for linear television. And this should strike at least some amount of fear in TV powers and fellow streaming services such as Hulu and Netflix (NASDAQ:NFLX) .

The Deal

Amazon, which announced the deal just a week before the World Cup, now owns live and “exclusive” rights for 20 Premier League games a season in the UK. The three-year deal will see Amazon Prime live stream the first December midweek round and the festive Bank Holiday round of games. This includes the December 26 or Boxing Day—a national holiday—slate of games that regularly features matchups between a large chunk of the 20-team league. Boxing Day games are highly important in the soccer-obsessed land.

The Premier League deal was for an undisclosed amount, but it is hugely important as Sky Sports (OTC:SKYAY) and BT Sport (NYSE:BT) have come to dominate Premier League coverage recently. The two cable giants won the rights earlier this year to broadcast nearly all of the remaining Premier League games starting in 2019, reportedly paying a combined $6 billion.

UK soccer fans with an Amazon Prime membership will be able to watch all of these games at no extra charge. Amazon’s deal also marks the first time that a full round of Premier League fixtures will be broadcast live in the UK. “Prime Video will be an excellent service on which fans can consume live Premier League football—including for the first time in the UK a full round of matches—and we look forward to working with them from season 2019/20 onwards,” Premier League Executive Chairman Richard Scudamore said in a statement.

Why It Matters

On the surface level, the deal will likely encourage tons of people in the UK to sign up for an Amazon Prime subscription during the vitally important holiday shopping period. But let’s go a little deeper.

Amazon’s push into one of the most popular sports leagues in the world, for a fun and highly anticipated slate of games, is pretty impressive and will likely frighten streaming and cable companies alike. For the non-soccer fans out there, imagine if a UK-based streaming service bought the exclusive rights to broadcast the NBA’s Christmas Day games, beating out ESPN and TNT (NYSE:TWX) or better still, think about the same situation but with NFL games on Thanksgiving on CBS (NYSE:CBS) and Fox (NASDAQ:FOXA) .

The Premier League deal also follows Amazon’s infiltration into NFL programming. The e-commerce behemoth paid $50 million to broadcast 10 Thursday Night Football games this past season, a deal the two sides renewed for the 2018 and 2019 seasons. Amazon’s push into the NFL, which came on the heels of Twitter’s (NYSE:TWTR) Thursday Night Football partnership for the 2016 season, has been pretty well publicized.

With that said, its long-term impact on the way we consume lives sports has been somewhat understated. Amazon beat out the likes of Facebook (NASDAQ:FB) and others for its NFL deal. Meanwhile, the company has more quietly built up a strong relationship with the NBA.

Amazon now streams the NBA’s growing minor league, known as the G-League, through its widely popular Twitch streaming platform. More recently, the company landed the rights to stream the NBA’s new esports league, which they started in partnership with Take-Two Interactive (NASDAQ:TTWO) .

Live sports programming is one of the last remaining reasons that many people still cling to their cable subscriptions. But, if five or ten years from now, sports fans can watch live NFL, NBA, and Premier League games, among others on Prime, Amazon could easily become the cord cutters go-to new home.

Furthermore, Amazon Prime now boasts an array of original programming and is expected to spend roughly $5 billion on new original programming this year. Amazon committed $250 million on one new Lord of the Rings series. These moves come as it prepares to do battle with Disney’s (NYSE:DIS) over-the-top streaming service that is scheduled to launch in late 2019, as well as Netflix, HBO, and others.

Going forward, expect Amazon to continue to bolster its live sports offerings and its original programming to better compete against the likes of Hulu, Google’s (NASDAQ:GOOGL) YoutTube TV, Netflix, Comcast (NASDAQ:CMCSA) , and almost anyone else.

Live sports, TV shows, and movies, paired with free Amazon shipping, all for Prime’s $12.99 a month or $119 a year price tag, seems like almost too good of a deal.

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