Was This $50 Million Purchase the Right Move for Amazon?

By Motley Fool Staff Markets Fool.com

In this segment fromtheMotley Fool Moneyradio show, the cast digs into the latest deal in live-sports streaming asAmazon (NASDAQ: AMZN)announced it would pay $50 million for the rights toThursdayNight Football. Whatis the company actually getting out of this?

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A full transcript follows the video.

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This video was recorded on April 7, 2017.

Chris Hill: Amazonis getting into live sports. This week,Amazon agreed to pay the NFL $50 million for the rights to livestream Thursday night games this fall. That is five times whatTwitter (NYSE: TWTR)paid last year, Jason. But something tells meAmazon just wanted this and said they were going to pay up for it.

Jason Moser: Yeah. My money was actually onFacebook,to be quite honest with you. I was a little surprised they didn't get it. Video is a massive opportunity here. But it's reallyexclusivity that's going to drivemeaningful return on investmentwhen it comes to this stuff.I mean, I actually respect that the folks at Twitterdidn't try to overpay for something thatwasn't going to have a material impact on their business.

Hill: Right,the games are still going to be on television.

Moser: Andthat's just it. It's not exclusive. It wasn't exclusive with Twitter,it's not going to be exclusive with Amazon. It served as a greatopportunity for Twitter to learnhow they might be able to integrate live video into their platform. This is going to be something that Amazon is going to use to advertise itself a bit more. It is going to bebehind the paywall, you're going to have to be a Prime member to get this stuff. But you can watch it a number of different ways. CBS, NBC, NFL Network. If you are aVerizonwireless customer, you can stream it. So there's not any exclusivity here. I think that's ultimately where the real value lies in live sports.

Simon Erickson: Is it a brand building or amerchandising play? Iwould think you could buy a whole bunch offootball merchandise on thissmall company called Amazon that I've heard of.

Hill: Yeah,when I saw the news of this deal, I thought to myself, "They're going to get 10 weeks of NFL games, I think they can sell $50 million worth of NFL gear in that time alone."

Erickson: Probably.

Moser: Amazon spends a lot of money to build that business, to grow that business. This is another investment in that Prime platform.I think it'll work out fine for them, because their numbers are closer to the vest, and ultimately, we know how they run the business anyway.

Chris Hill owns shares of Amazon. Jason Moser owns shares of Twitter. Simon Erickson owns shares of Amazon and Facebook. The Motley Fool owns shares of and recommends Amazon, Facebook, Twitter, and Verizon Communications. The Motley Fool has a disclosure policy.