SBD/Issue 129/Sports Media

DirecTV's NFL Sunday Ticket Renewal Includes Wider Distribution

DirecTV has renewed its deal to serve as the NFL's exclusive satellite carrier through '14. A broadband version of the package will be available by ’12 (NFL). In N.Y., Richard Sandomir reports the deal is worth $1B a year, up from the $700M it currently pays annually, and will allow fans living in areas without access to DirecTV the ability to buy Sunday Ticket on Broadband "directly from the satellite carrier." NFL Exec VP/Media Steve Bornstein: "The intent is to serve the underserved. People who can't get it, for whatever reason, will be able to get it." Sandomir notes Sunday Ticket's Red Zone Channel also will be "made available, for a fee, again no later than 2012, to Dish; telephone companies like Verizon and AT&T; wireless; and Internet providers." Bornstein: "This is a great opportunity for Big Cable to sit down and talk about a better relationship with the NFL" (N.Y. TIMES, 3/24). MULTICHANNEL NEWS' Mike Reynolds wrote the deal "opens the door to a wider reach for the out-of-home package." NFL VP/Communications Brian McCarthy said that Sunday Ticket "would function as an ad hoc channel on Sundays," and noted that league officials "would soon reach out to distributors about the red zone channel." McCarthy also said that the availability of the service "would not be tied to distribution of NFL Network." Reynolds noted the NFL and DirecTV also "extended their carriage agreement for NFL Network, which will continue to be offered on DirecTV's Choice package" (MULTICHANNEL.com, 3/23).

INSIDE THE DEAL: On Long Island, Neil Best writes the deal keeps Sunday Ticket "from cable companies that have coveted it for years" (NEWSDAY, 3/24). But the HOLLYWOOD REPORTER's Georg Szalai notes the Red Zone Channel "will now go nonexclusive" after being part of DirecTV's package for four years (HOLLYWOOD REPORTER, 3/24). The WALL STREET JOURNAL's Matthew Futterman notes the deal is a "sign that media rights for major sports may defy the recession." The deal "chips away at DirecTV's exclusivity when it comes to out-of-market games," though the NFL "still needs to reach agreements with cable and broadband providers on the price and access to the Red Zone Channel" (WALL STREET JOURNAL, 3/24).

DEAL TO BE PAID DURING WORK STOPPAGE: SI.com's Peter King cites a source as saying that the NFL/DirecTV deal "calls for the league to be paid the billion-dollar rights fee ... even if games are not played in 2011" due to a work stoppage. King notes by announcing the deal "so far in advance of its effective date ... the NFL is showing the players that it has a war chest and won't be pressured into making a deal it doesn't want just for the sake of avoiding a work stoppage in 2011." King: "This will be a huge factor in the looming negotiations, one that clearly will make the league not as desperate to resolve a simmering dispute with the players that began when owners opted out of the current collective bargaining agreement last year" (SI.com, 3/24). An NFL source said that the deal will "provide the owners with more than [$30M] per team in working revenue even in the event of a lockout." The source: "That allows us the juice to have a lockout from a cash flow point of view, if that's necessary" (BOSTON HERALD, 3/24).

A RISK FOR DIRECTV: Bernstein analyst Craig Moffett in an e-mail said the deal carries significant risks for DirecTV, which he suggested would have to increase the service's price to pay for a deal estimated at $4-4.5B over four years. "DirecTV would need to acquire (or retain) about 400 to 450K incremental subscribers by 2012 who are solely attributable to the NFL Sunday Ticket package in order to break even on the contract," he wrote. "We believe finding these incremental subs will prove increasingly difficult, as uptake among consumers that want this package must already be quite high, and bar and restaurant penetration is likely near saturation" (John Ourand, THE DAILY). CNBC's Darren Rovell: "If you have something that’s good even in this economy now, you’re going to keep it and you might even raise the ante a little bit” (“The Kudlow Report,” CNBC, 3/23).

LAST CHANCE DRIVE: In San Jose, John Ryan writes the deal "looks like another sign that NFL Network will disappear from Comcast Cable altogether when that contract expires May 1" (SAN JOSE MERCURY NEWS, 3/24). CABLEFAX DAILY notes more evidence suggesting NFL Net and Comcast will not renew their deal "came in the past week when Comcast began notifying [subscribers] that they could lose the channel May 1." Comcast in a recent programming notice wrote, "To our Sports Entertainment Pack Customers: In spite of Comcast's efforts, the NFL may terminate Comcast's right to carry NFL Network, as a result, the network may be removed from your lineup on May 1" (CABLEFAX DAILY, 3/24).

MISSING MAN: NEWSDAY's Best noted NFL Network's Adam Schefter "hasn't blogged on NFL.com since March 3, hasn't appeared on 'Total Access' since March 6 and now is nowhere to be seen at the owners' meetings in California." Schefter: "I'm under contract to NFL Network until the middle of August, and I've been very happy there and I'm hoping we can work things out." Best: "So it appears there is a lack of an agreement on the financial terms of a contract extension" (NEWSDAY.com, 3/23).

Return to top

Related Topics:

Media

Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug