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SBD/May 19, 2014/Finance
AT&T Could Pull Out Of DirecTV Deal If Satellite Company Doesn't Renew NFL Sunday Ticket
Published May 19, 2014
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MONSTER MASH: YAHOO SPORTS' Jeff Passan writes everybody in the TV industry "agrees: DirecTV, the satellite giant, sets the standard with sports programming -- and should continue to do so even after its purchase by AT&T over the weekend." Once it agrees to a carriage deal with TWC for the Dodgers RSN -- SportsNet L.A., the "rest of the providers fall in line and do the same." For TWC to promise the Dodgers an average of more than $330M a season for the next 25 years "without even a soft carriage agreement in place with DirecTV is malpractice, a monster bet on an audience it clearly did not understand" (SPORTS.YAHOO.com, 5/19).
POWER PLAY: In N.Y, de la Merced & Gelles in a front-page piece wrote AT&T with the DirecTV deal is "trying to tilt the balance of power with media companies as the market for broadband Internet and video shifts." AT&T "becomes the latest telecommunications giant seeking to establish an even greater reach." BTIG Research Managing Dir of Media & Technology Analyst Rich Greenfield said, "The media chessboard is moving more this year than it has in the past decade. You’re seeing major shifts. Everyone is jockeying for position." For consumers, the acquisition "may change little, at least at first, since AT&T and DirecTV share little overlap." AT&T "has about 5.7 million TV customers through its U-verse service, while the satellite TV operator has about 20.3 million" U.S. customers. The acquisition "would also bring to AT&T DirecTV’s existing content at a time when AT&T has made video services a priority." DirecTV's holdings also include a minority stake in MLB Network (N.Y. TIMES, 5/19). BROADCASTING & CABLE's Michael Farrell wrote the deal "will create a more formidable rival" to Comcast/TWC (BROADCASTINGCABLE.com, 5/18). In L.A., Joe Flint writes traditional media and telecomm companies "are bulking up to compete against the giants of Silicon Valley, including Google, Apple, Netflix and Amazon" (L.A. TIMES, 5/19).
MARKET RESPONSE: At presstime, shares of AT&T were trading at $36.36 per share, down 1.03% from the close of business Friday. Shares of DirecTV were trading at $84.97, down 1.40% (THE DAILY).