/// DirecTV May Punt Away Sunday Ticket Rights

March 8, 2013  |  Media Week

DirecTV may elect to punt on its exclusive rights to NFL Sunday Ticket . Speaking to investors at a Deutsche Bank media conference in Palm Beach, Fla., DirecTV chief financial officer Patrick Doyle said the satellite operator would be averse to paying a significantly higher rate for the NFL games package. DirecTV’s current four-year deal costs it $1 billion per season. “For us, there’s a point where we’re certainly willing to renew and at some increase that’s reasonable, that we can absorb and continue to pass on to the customer,” Doyle said. “I think, obviously, if it goes above that, we would certainly either think about not carrying it or go nonexclusive.” Should DirecTV surrender the package or choose to sign a non-exclusive deal, it is likely that a rival cable operator would rush to fill the void. DirecTV has held the rights to Sunday Ticket since the league introduced it in 1994. The current contract expires in 2015. “We’re not necessarily concerned about going to nonexclusive, if [the deal] is structured properly,” Doyle said. “Our goal would always be to keep it exclusive, if we can. But there’s…obviously, there’s a price point that I think we would reach where we wouldn’t do that to our shareholders.” For the last 20 years, Sunday Ticket has been the key differentiator separating DirecTV from the Comcasts and Time Warner Cables of the multichannel universe. But as the company’s subscriber growth has dwindled—DirecTV closed out 2012 with 20.1 million subscribers, up just 1 percent versus 19.9 million in the year-ago period—the package is no longer carrying its weight. While Sunday Ticket offers subscribers an out-of-market pass to nearly every NFL game, the rise of NFL Network and its commercial-free NFL RedZone service are likely eating into DirecTV’s margins. Last April, DirecTV slashed the price of a Sunday Ticket pass for current subscribers around 40 percent to $199.95 per year. Doyle said DirecTV is not in formal talks with the NFL, although the company “continue[s] to have a dialogue” with the league. “Our relationship’s great. We continue to talk and share information on how did this last season go, what were the take rates, how did our strategies work,” Doyle said before adding that because DirecTV cannot monetize the games by selling ad inventory, it relies on significant adoption rates to justify the cost of keeping the package. The NFL is almost certain to look for a higher rate should DirecTV elect to retain possession of Sunday Ticket

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DirecTV May Punt Away Sunday Ticket Rights



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