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DirecTV sale won’t expand availability of NFL Sunday Ticket
Posted by Mike Florio on May 19, 2014
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With AT&T buying DirecTV for the tidy sum of $48.5 billion, NFL fans have become fascinated with the prospect of getting access to NFL Sunday Ticket without having to buy a satellite dish.
Fascination is about as far as it will go.
AT&T’s purchase of DirecTV won’t give AT&T the ability to do anything more with TV rights than DirecTV already has purchased. If AT&T wants to expand the ability to deliver NFL Sunday Ticket to consumers, AT&T will have to pay for that privilege.
AT&T will be paying in any event. The package expires after the coming season, and the league may want even more for the rights now that there’s a deeper pocket into which the NFL can give.
Look for AT&T/DirecTV to fork it over. The NFL continues to be one of the hottest properties in entertainment, and DirecTV could see a major exodus of customers (this one included) if NFL Sunday Ticket suddenly isn’t available.
DirecTV purchase could hinge on NFL Sunday Ticket renewal
Posted by Mike Florio on May 19, 2014
If DirecTV loses the NFL Sunday Ticket package, plenty of customers won’t want DirecTV. The company’s potential buyer may not want it, either.
According to Jon Erlichman of Bloomberg.com, a federal filing made in connection with AT&T’s proposed purchase contains this clause: “The parties also have agreed that in the event that DIRECTV’s agreement for the ‘NFL Sunday Ticket’ service is not renewed substantially on the terms discussed between the parties, the Company may elect not to consummate the Merger[.]“
The current contract between the league and DirecTV runs through 2014. Given the regulatory realities, it’s likely that the AT&T/DirecTV merger wouldn’t become final until 2015. Which means that the NFL’s relationship with DirecTV will be resolved before AT&T’s relationship with DirecTV is resolved.
This gives the NFL plenty of power over the process. If the league asks for too much money and the deal isn’t renewed, the AT&T/DirecTV merger gets blown up.
It also provides an AT&T/DirecTV competitor an opening for killing the deal, simply by overpaying for NFL Sunday Ticket.
From the AT&T/DirecTV perspective, it’s not an unlimited pot of money. The clause expressly refers to renewal “substantially on the terms discussed between the parties.” If the number is too high, AT&T can still walk away.
There’s an apparent limitation to AT&T’s ability to walk away. The tweet from Erlichman concludes with the word “but” after “Merger.” Which means that there’s some sort of limitation to AT&T’s power to pull the plug.
I’ll track down the filing to see what the “but” is all about after PFT Live. Until then, feel free to do it for me and send the link. A free one-year subscription to PFT Live is riding on it.
Posted by Mike Florio on May 19, 2014
With AT&T buying DirecTV for the tidy sum of $48.5 billion, NFL fans have become fascinated with the prospect of getting access to NFL Sunday Ticket without having to buy a satellite dish.
Fascination is about as far as it will go.
AT&T’s purchase of DirecTV won’t give AT&T the ability to do anything more with TV rights than DirecTV already has purchased. If AT&T wants to expand the ability to deliver NFL Sunday Ticket to consumers, AT&T will have to pay for that privilege.
AT&T will be paying in any event. The package expires after the coming season, and the league may want even more for the rights now that there’s a deeper pocket into which the NFL can give.
Look for AT&T/DirecTV to fork it over. The NFL continues to be one of the hottest properties in entertainment, and DirecTV could see a major exodus of customers (this one included) if NFL Sunday Ticket suddenly isn’t available.
DirecTV purchase could hinge on NFL Sunday Ticket renewal
Posted by Mike Florio on May 19, 2014
If DirecTV loses the NFL Sunday Ticket package, plenty of customers won’t want DirecTV. The company’s potential buyer may not want it, either.
According to Jon Erlichman of Bloomberg.com, a federal filing made in connection with AT&T’s proposed purchase contains this clause: “The parties also have agreed that in the event that DIRECTV’s agreement for the ‘NFL Sunday Ticket’ service is not renewed substantially on the terms discussed between the parties, the Company may elect not to consummate the Merger[.]“
The current contract between the league and DirecTV runs through 2014. Given the regulatory realities, it’s likely that the AT&T/DirecTV merger wouldn’t become final until 2015. Which means that the NFL’s relationship with DirecTV will be resolved before AT&T’s relationship with DirecTV is resolved.
This gives the NFL plenty of power over the process. If the league asks for too much money and the deal isn’t renewed, the AT&T/DirecTV merger gets blown up.
It also provides an AT&T/DirecTV competitor an opening for killing the deal, simply by overpaying for NFL Sunday Ticket.
From the AT&T/DirecTV perspective, it’s not an unlimited pot of money. The clause expressly refers to renewal “substantially on the terms discussed between the parties.” If the number is too high, AT&T can still walk away.
There’s an apparent limitation to AT&T’s ability to walk away. The tweet from Erlichman concludes with the word “but” after “Merger.” Which means that there’s some sort of limitation to AT&T’s power to pull the plug.
I’ll track down the filing to see what the “but” is all about after PFT Live. Until then, feel free to do it for me and send the link. A free one-year subscription to PFT Live is riding on it.
