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Volume 21 No. 30
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Expect larger AT&T to be a significant player in sports rights

Few people are looking at sports content as a main driver of AT&T’s $85 billion purchase of Time Warner. Last week, lots of ink was spilled on AT&T Watch — a planned low-cost bundle that will not include any sports channels.

 

But it’s becoming increasingly clear that sports will play a significant role in shaping how the new company looks. Under AT&T’s corporate umbrella, the presence of both Turner Sports and DirecTV, which, of course, has the rights to “NFL Sunday Ticket,” instantly positions AT&T as one of the biggest players in sports media.

 

“Now they have the NFL, NCAA basketball, NBA and MLB,” said Eric Jackson, president and founder of EMJ Capital Ltd. “Not bad at all.”

 

Turner Sports has not had a problem picking up sports rights. It has rights to the NBA and MLB playoffs and shares Final Four rights with CBS. The company has been at the negotiating table seemingly every time a new batch of rights comes up.

 

But some believe that AT&T’s deep pockets will make the new company even more of a player in rights negotiations. The size of the new AT&T would give it an advantage over traditional media companies. Imagine a company that could pick up rights covering linear TV, digital, over-the-top, mobile and pay-per-view all in one bid.

 

“I’d expect them to be more competitive than Time Warner was in pursuing the NFL in prime time and, maybe, a college football package,” said Michael Nathanson, a senior research analyst for MoffettNathanson.

 

Of all Turner Sports’ offerings, the breadth of AT&T’s platforms should help B/R Live the most. It would not be surprising to see an app for the streaming service, which is set to launch later this year, loaded on all AT&T phones and distributed to DirecTV’s 25 million subscribers.

 

That kind of distribution will make it easier for consumers to find B/R Live programming and potentially give the streaming service an advantage over its competitors, like ESPN+.

 

Another area of sporting interest is in Chicago where NBC Sports’ RSN has been trying to sign the Cubs to a rights deal. The Cubs’ current deal with NBC Sports Chicago ends after the 2019 season, and the two sides have been talking for months about an extension.

 

Now that AT&T’s Time Warner purchase is official, I would expect the Cubs to reach out to the new company, if it hasn’t already. After all, AT&T already is in the RSN business with four channels: AT&T SportsNet Pittsburgh, AT&T SportsNet Rocky Mountain, AT&T SportsNet Southwest and Root Sports Northwest.

 

It’s way too early to handicap where the Cubs’ rights will go. But it seems obvious that the team — at a minimum — will look to use AT&T as leverage in its NBC Sports negotiations.

 

Comcast has the largest number of subscribers in the Chicago market, but the combined subscriber base for AT&T U-Verse and DirecTV are a solid second, sources say.

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.