NFL Sunday Ticket Is Linchpin of AT&T, DirecTV Deal | Adweek NFL Sunday Ticket Is Linchpin of AT&T, DirecTV Deal | Adweek
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NFL Sunday Ticket Is Linchpin of AT&T, DirecTV Deal

Renewal of must-have content and exclusive rights required for merger

Green Bay Packers v Chicago Bears | Photo: Getty Images

DirecTV's rights to NFL Sunday Ticket—a football package that gives subscribers access to every NFL game that plays on Sunday—is so important that it is a key clause in the deal with AT&T.

If DirecTV is unable to keep exclusive rights to the premium sports package, AT&T retains the right to back out of the $48.5 billion transaction.

Boy, does the NFL have leverage now.

DirecTV's current agreement with the NFL, for which it pays about $1 billion per season, expires at the end of the year. Subscribers pay about $300 for the package that gives football fanatics the ability to watch every out-of-market football game on Sundays.

Even though it's a loss leader for DirecTV, NFL Sunday Ticket is must-have content AT&T doesn't want to lose, now that it's looking to "redefine the video entertainment industry," as stated by AT&T CEO Randall Stephenson.

The two companies have already spoken to commissioner Roger Goodell, DirecTV CEO Mike White said this morning on a conference call with analysts. "We talked about why this transaction is great for the NFL. ... We’re highly confident we'll get our deal done," White said. "I expect discussions to be consummated before the end of the year."

But just in case it doesn't, AT&T has an out.

"The parties also have agreed that in the unlikely event that the company’s agreement for the 'NFL Sunday Ticket' service is not renewed substantially on the terms discussed between the parties, the company [AT&T] may elect not to consummate the merger," AT&T and DirecTV said in an 8K filing.

Up to this point, negotiations between the NFL and DirecTV have been complicated by digital rights, a hold up that might change now that DirecTV can offer up an additional 6 million of AT&T video homes.

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