DirecTV Keeps Plugging Away at NFL Sunday Ticket Renewal

Satellite TV giant looks to retain exclusive rights to package

Mike White, chairman and CEO, DirecTV | Photo: Getty Images

DirecTV continues to plug away at a deal that would allow it to retain the exclusive rights to the NFL Sunday Ticket package, but the satellite-TV giant said it has yet to finalize an agreement with the league.    

Speaking to investors during the company’s fourth quarter earnings call Thursday, DirecTV chairman and CEO Mike White said the negotiations began to pick up steam after the NFL season officially ended on Feb 2.

“Obviously, things tend to get pushed to the side…but now that we’re through the Super Bowl we’ve both agreed to extend our exclusive negotiating period,” White said. “Our conversations with the NFL are progressing in a very positive and constructive manner.”

White added that he continues to be very optimistic that DirecTV will hold onto the rights to Sunday Ticket, for which it pays $1 billion per season. DirecTV has been the exclusive distribution partner of the out-of-market package since the NFL first rolled it out back in 1994.

DirecTV’s current agreement expires at the end of the 2014 NFL campaign.

White hinted that the digital rights component of the new agreement may have complicated the negotiations, before adding that he hopes to have more to say on the matter later this year.

“In every discussion that we have on any content, digital rights are an important part of those discussions, and frankly that’s often partly why things take a little longer these days to get done,” White said. “Because it’s an awfully complex digital landscape in deciding exactly what rights a content provider will or won’t provide you.

“But from our perspective, we’re optimistic. We very much value our relationship with the NFL, we think it’s important to our brand—but we’re also looking for opportunities, as we did last year, to strengthen what we’re doing in a smaller way with our DirecTV app and the Sunday Ticket Experience.”

Last year, DirecTV chief financial officer Patrick Doyle suggested that the NFL’s asking price for the Sunday Ticket package was too steep, noting that if the price went much higher, the operator would consider sharing the load with a third party carrier or dropping the service altogether.

Although a number of outlets in December reported that a deal had been reached, the NFL was quick to refute those claims. But as long as the exclusive negotiating window remains propped open, Sunday Ticket is DirecTV’s to lose.

Both parties have been negotiating on and off since before the 2013 NFL season began.

However the talks pan out, Sunday Ticket is a loss leader. Approximately 10 percent of DirecTV’s sub base, or 2 million customers, pay the annual $300 fee for the all-inclusive football package. That said, Sunday Ticket gives the satellite company a huge advantage over its MVPD rivals in an increasingly NFL-crazed consumer landscape.

Still, the absolute value of Sunday Ticket has somewhat eroded over the past few years. For one thing, the NFL’s newly revised full-season Thursday Night Football schedule has incrementally boosted the odds of finding your favorite out-of-market team on a national TV platform; moreover, the rise of the look-in service NFL RedZone offers a fast-paced, commercial-free experience rivaling that of its much pricier forebear. 

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