SBD/November 13, 2013/Events and Attractions

SMT Conference: DirecTV Wants To Continue Building Sunday Ticket Franchise

White said DirecTV has not begun talks for the SEC Network
DirecTV Chair, President & CEO Michael White is well aware of the image that comes to fans' minds when they think of DirecTV in '13: Peyton and Eli Manning in wigs, rapping to a hip-hop beat, touting "Football on your phone." Before the featured interview that kicked off the ’13 Covington & Burling Sports Media & Technology conference, White took the stage while the beloved spot featuring the Manning brothers played on two big screens. He said of the Mannings, "They're both incredible athletes, but they're great to work with. They really got into it. They picked out the clothes and the wigs. It re-enforced our new message -- about our mobile."

THAT'S THE TICKET: Of course, what everyone wanted was an update on negotiations between DirecTV and the NFL for future seasons of Sunday Ticket. White: "We're talking lots of money here, so these things take time. I'm optimistic that we'll get an exclusive deal done. There are always complications with a deal of this size, like with digital rights. We're a good partner. We want to continue to build the franchise." White explained why the NFL-DirecTV relationship is a mutually beneficial partnership. He said, "We've got two million subscribers that pay for Sunday Ticket, so that's good for the NFL. The highest-rated content of any kind these days is sports. Being linked with the NFL differentiates us from the rest of the competition."

QUICK HITS:
-- On DirecTV's surcharge for certain, large RSNs costing more than $7 a month: "We only put it on 15 percent of the country. This is one of those things where our industry is screwed up. You look at some of these mega-markets and it's a big number on the bill. We had to pass it through to pay for the rising cost of sports in those geographies, so we charged something like $2. The money has to come from somewhere. Ultimately, it comes from the customer."

-- On where DirecTV is seeing an increase in customers: "We're growing aggressively in Latin America. We're growing internationally."

-- On negotiations with the SEC: "We haven't started to look at it yet." Referring to fans in other parts of the U.S. who are not the slightest bit interested in the conference, White said, "One of the issues will be, who am I taxing"?

-- On cord-cutting by consumers: "It's a changing world out there, but so far, I don't see a significant trend in cord-cutting." Still, pointing to the continued struggling economy, White added, "There are some significant consequences down the road that we better think about."

-- On how DirecTV's negotiations have changed with sports leagues: "We're looking at ratings and we're assessing their value. It's a much more data-based negotiation than it has been. You have to try to understand, 'What can the consumer bear?' Every now and then, you have to take a tough stand."

-- On the rising cost of sports rights and, ultimately, the cost for consumers: "I have to speak on behalf of our 20 million households that aren't happy with their bills right now. Our average bill is $100 a month, and there are a lot of people who cannot afford that bill. There is no easy answer. Ratings in sports have never been higher. But the cost of sports is up. The challenge for us as a distributor is that we have to pass that through. I can't cover that. That's the real challenge for us in the industry." He added, "Sports is best when it appeals to everyone."

Check our On The Ground blog for continual updates from the conference.
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