NHL Stream Another Coup For Yahoo; Where Are Its Competitors?

Yahoo! Inc. YHOO signed a deal with National Hockey League to live stream up to four NHL games per week without requiring a cable subscription or authentication. The streams kick start on March 11.

Yahoo will deliver in-game highlights for each game, and will also provide condensed games, "Best of the Day" and "Best of the Week" top plays and postgame highlights. This is in addition to the Wednesday and Sunday national NHL games currently promoted by Yahoo in partnership with NBC Sports Group.

"[T]he NHL's premium content nicely complements our offering of live and on-demand partner content, including Yahoo/MLB's Game of the Day, Yahoo/NBC Sports content and our recently announced deal with the PGA TOUR," Phil Lynch, VP, Media Partnerships at Yahoo said in a statement.

Yahoo is introducing new video advertising opportunities that will run within commercial breaks during the live streams of live sporting events, which includes NHL and MLB games.

Odd Timing For Yahoo

But, experts question Yahoo's latest move as hockey is the No. 3 or No. 4 sport in the US and it's about 75 percent less popular than football.

"I actually think it is weird for Yahoo to do as they just closed down their TV business," Albert Fried's Rich Tullo told Benzinga.

Related Link: Apple No Longer Bidding For NFL Games; Facebook, Amazon, Verizon And Yahoo Are Left

Sports are a use case for live streaming and so are concerts. Alibaba Group Holding Ltd BABA is active in China with sports and Tullo said maybe this is a nod to Alibaba.

"Yahoo stopped doing the daily concert and I do not think they executed well on that business. My guess is the games will not be great games and Yahoo offers the NHL a small guarantee against digital ad sales. For the NHL, it's like free marketing and primes the market," Tullo noted.

Entering Digital Age

On the other hand, the deal underscores Yahoo's strategy to become a new-age media company and get in to a market which is not currently dominated by Google, a unit of Alphabet Inc GOOGL. Yahoo already tested the waters by live streaming an NFL game last year and got 15 million views.

"Yahoo discovered the power, first hand, of live broadcasting an NFL game last year through streaming," Darren Heitner, founders of Heitner Legal, told Benzinga. "It also determined that there is a way to go before seamless streaming is a true possible outlet for contest spread to the masses. This new deal seems to fall in line with its strategy to become a new-age media company and differentiate itself by way of entering a market that Google has not yet dominated."

Over The Top

In this scenario, where does the competitors such as Netflix, Inc. NFLX stand?

It's not economically feasible for Netflix to acquire sports rights, especially with their weak cash flow, according to Tullo. They might need to cut their original content if they want to buy rights for such sporting events.

"Netflix cannot afford sports rights, they were free cash flow (FCF) negative last year and will be FCF negative this year. They have to pay for their own originals and enough syndicated content to make the consumer cut the cord," Tullo said.

"Paying billions for a US only League Sports right would kill Netflix. To get the NHL, NFLX would have to sacrifice 3 to 5 originals maybe more. Four second rate games a week would not be great for NFLX's brand. I could see them paying up for Barcelona Soccer Games but the digital right for that would be in the $100 million range," Tullo added.