SBD/May 20, 2014/Media

Source: Digital Rights Issue Could Be Holding Up DirecTV's NFL Sunday Ticket Renewal

Newer TV deals by the NFL have taken away some of Sunday Ticket's cachet
The "hangup" in DirecTV extending its rights to NFL Sunday Ticket "has been securing more digital rights," according to a source cited by Joe Flint of the L.A. TIMES. DirecTV now will have to "decide if it is worth seeing whether the NFL will extend Sunday Ticket exclusivity" to AT&T's U-Verse. Sunday Ticket has "allowed DirecTV to differentiate itself from other pay-TV distributors." However, "newer TV deals by the NFL and the creation of the channel RedZone ... have taken away some of Sunday Ticket's cachet" (, 5/19). The WALL STREET JOURNAL's Ramachandran, Clark & Gryta cite an NFL source as expressing optimism that a "deal with DirecTV is coming soon." Both AT&T and Verizon "view tie-ups with the NFL as a way to lure new wireless subscribers in a saturated U.S. marketplace." Streaming of NFL games also can "help the companies earn more in wireless data fees, an important source of growth as their core voice business has matured." AT&T before its recent pursuit of DirecTV already was "working to develop deeper ties with the NFL." The company last year purchased naming rights for the Cowboys' venue and has "expressed interest in joining with teams to provide 'in-stadium' content" (WALL STREET JOURNAL, 5/20). The WALL STREET JOURNAL's Rex Crum cited analysts as saying that it is "feasible AT&T could position itself as the new de facto national NFL 'network.'" Nomura Equity Research analyst Adam Ilkowitz said, "Nobody else is going to buy that Sunday Ticket package." He added that the next deal with the NFL "will easily be in excess" of DirecTV’s current $4B contract. Ilkowitz: "There’s no other national provider who can offer this option. That’s why DirecTV did it. They can serve any customer." Ilkowitz said that it "doesn’t make sense for other TV providers to engage in a bidding war." But Crum wrote "it’s doubtful anyone ever lost money betting on the growth of the NFL." If AT&T "ends up completing its acquisition of DirecTV, keeping that Sunday Ticket package in the DirecTV fold, it might well have placed the right bet on the right team at the right time" (, 5/19).

NFL GAINS LEVERAGE: In L.A., Flint & Puzzanghera note Sunday Ticket "may have relatively few subscribers, but it is exclusive sports content -- and providing that kind of programming will be crucial for media and telecommunications companies going forward as they navigate a constantly shifting media landscape" (L.A. TIMES, 5/20). In N.Y., Atkinson & Kosman write, "As if NFL Commissioner Roger Goodell needed another advantage over a media partner." Already owning the "hottest media rights in the US, Goodell on Monday was handed even a greater edge in talks over a new 'NFL Sunday Ticket' deal with DirecTV when it was learned that AT&T could walk away" from its $48.5B acquisition if a new deal with the NFL "couldn't be worked out." The only people "happier than Goodell and his front-office colleagues" were NFL team owners. If the "added pressure on DirecTV is enough to goose the price" of a new Sunday Ticket deal to $1.5B a year, each owner would pocket an extra $3M a year. The "walk-away clause, which requires DirecTV to ink a new deal at 'substantially' the same terms as the existing one, could be read as a warning shot from AT&T to keep the NFL in line where pricing is concerned." Bevilacqua Helfant Ventures co-Founder & CEO Chris Bevilacqua is expecting the NFL "to charge two to three times" its current $1B annual license fee (N.Y. POST, 5/20). In DC, Cindy Boren wrote Sunday Ticket "lost some of its oomph with the creation of the RedZone channel," but it is "still going to cost AT&T/DirecTV dearly." All of which will "make the NFL the big winner" (, 5/19).

FOOTBALL CRUCIAL FOR DIRECTV: CNBC's Jim Cramer said without NFL Sunday Ticket on DirecTV, "many customers would walk away" from the satellite TV provider. Cramer said, "I subscribe to DirecTV because I, like many other Americans, follow out-of-market teams and I play fantasy football. There's simply no other reason I would take this monstrosity of a network with a dish that goes down in every storm." Cramer: "Believe me, if this satellite technology were at all up to snuff then Apple, Google or Facebook would be bidding for it, not AT&T." The NFL "totally knows how this package is now make or break for AT&T. They got DirecTV over a barrel" ("Mad Money," CNBC, 5/19).
Return to top

Related Topics:

Media, NFL, DirecTV, ATT

Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug