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SBJ/July 29-August 4, 2013/Media
NFL negotiating renewal with DirecTV
Published July 29, 2013, Page 3
DirecTV pays the NFL $1 billion annually for exclusive rights to out-of-market games through a deal that runs for two more seasons. But the value of the most recent contract has been chipped away at since it was signed in 2009, with the NFL Network schedule expanding from a late-season-only package of games to having Thursday night games throughout the season.
|NFL Network’s expanded schedule has chipped away at the value of DirecTV’s deal for out-of-market games.
“The NFL developed RedZone to keep the cable systems at bay because they wanted access to the out-of-market package, but that helped mitigate the DirecTV deal,” said TV consultant Mike Trager.
Cable operators have long clamored for access to out-of-market games, such as what they carry for the NBA (League Pass), MLB (Extra Innings) and NHL (Center Ice). The NFL always resisted that approach, but now talk within league circles is there could be some sort of hybrid model to replace the DirecTV exclusive arrangement for its Sunday Ticket package.
“Hybrid; something for everyone,” is how one top business executive at a team described what he expected would happen. “Too many options right now, and exclusive could be hard and expensive.”
DirecTV declined to comment. An NFL spokesman said the league is regularly in touch with its business partners.
The talks with DirecTV, which began fairly recently, remain in the early stages, the sources said.
In March, at an investor conference, DirecTV Chief Financial Officer Patrick Doyle appeared to send the first public negotiating volley, telling the audience the satellite carrier is averse to paying a significantly higher amount than the current deal and that it did not oppose a non-exclusive deal.
The most recent media deals for the NFL have seen sharply higher rights fees. In late 2011, the NFL agreed to new deals with CBS, Fox and ESPN that upped rights fees across the board by around 60 percent. Those deals were done far in advance of the expiration of the old contracts, which extend through this season.
Last month, the NFL redid its Verizon deal for a 40 percent increase, with streaming of network games part of that package.
One source said the NFL is already in its exclusive negotiating window with DirecTV and said that period will extend through the end of the year. Other sources could not confirm that, though clearly as reflected in the early renewals of the other media contracts, the NFL is not waiting long to redo significant business.
Staff writer John Ourand contributed to this report.