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SBJ/Aug. 25-31, 2014/Media
NFL, DirecTV on verge of Sunday Ticket deal
Published August 25, 2014, Page 1
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Though several issues still need to be ironed out, a broad agreement has been reached on the price and length of a deal, according to multiple sources.
DirecTV’s rights fee will increase by a mid-single-digit percentage each year in a deal that will sync up with the NFL’s other TV deals, which run into the next decade. ESPN’s deal runs through the 2021 regular season; the CBS, Fox and NBC deals go into 2022. It’s not clear exactly when DirecTV’s new Sunday Ticket deal would end, but sources said it would be either 2021 or 2022.
The deal has been described as “close” for most of the past year, with NFL Commissioner Roger Goodell and DirecTV Chairman Michael White expressing confidence that the two sides would strike a deal. The NFL and DirecTV still need to iron out some issues, particularly as it pertains to digital rights, but sources said those issues are not big enough to derail the deal.
Despite the recent movement, there still are no signed contracts, and a formal announcement is not imminent.
|The new NFL-DirecTV deal will continue a relationship that spans 20 years. DirecTV remains the package’s only distributor.
An NFL spokesman described discussions as ongoing, and DirecTV declined to comment.
DirecTV’s current four-year deal for Sunday Ticket ends after this season and carries an average annual value of $1 billion.
The new deal is expected to grant DirecTV over-the-top rights for people who cannot install a DirecTV satellite dish — a feature the satellite company already plans to roll out for this season.
As with most deals these days, a new Sunday Ticket deal will allow authenticated users to stream the games.
AT&T’s planned $49 billion acquisition of DirecTV also has complicated the talks. When the acquisition was announced in May, it included a caveat that would allow AT&T to back out of the deal if DirecTV were unable to renew its Sunday Ticket deal. The league additionally needed to figure how AT&T’s ownership of DirecTV would affect the league’s four-year, $1 billion deal with Verizon to stream games to mobile phone users. That NFL-Verizon deal runs through the 2017 season.
The new NFL-DirecTV deal will continue an exclusive relationship that spans 20 years. DirecTV launched Sunday Ticket in 1994 and has remained the package’s only distributor. The package has around 2 million subscribers and is widely seen as being crucial to DirecTV’s growth through the years.
In the past, cable operators expressed interest in picking up the package from DirecTV, though the multiple system operators did not have serious discussions with the league this time. Cable operator executives have said that the popularity of the sports-tier whip-around channel NFL RedZone mitigates their desire for the entire Sunday Ticket package.
DirecTV rival Dish Network has said that it would be interested in bidding for the package, but its executives did not have serious talks either. NFL executives have talked to Google about a possible deal, but sources said those talks never got past the preliminary stages.
With this deal syncing up with the other media packages starting next year, the NFL will generate nearly $7 billion in annual media revenue from CBS, DirecTV, ESPN, Fox, NBC and Verizon.