Cost per regular sub for NFL ST

[Bob Haller]

I wonder what the average D non subscribing ST subs price increase will be?

Someone has to pay all that money, and assuming the take rate for ST remains the same its the regular joe who will be footing the bill.

Now how about some good guesses? We could make it a contest, the person who guess the closest wins some prize/

Yesterday on the news D spokesman said there would be a increase but not tremendously.

[Curtis0620]

Charlie paid $600M of it.

[RandyAB]

I guess whatever it is, Charlie will be able to raise his rates too, so he is still equal, and he will be able to make more of a profit.

[BearsFan]

I dunno what the new price will be. I know I paid $139 as the package automatically renewed for me.

It's worth that much. I don't know if I'd pay over $200 for it. I mean, I gotta watch my Bears (even though they suck this year), but I gotta draw the line somewhere.

Too bad the NFL/D* won't entertain a single team package. While I do *love* getting all the Sunday games, I'd be happy with paying just to watch my Bears, given the option. I suspect the NFL/D* knows there are some people like me who would pay less to see just "their team," so I doubt that'll happen (unfortunately). :(

Nonetheless, I'll bet even the renewing price goes up to $179, with new subs around $200-$210.

--BearsFan

[Karl Foster]

It sounds like some E* subs have NFLST envy. If D* paid $2 billion dollars for NFLST (a number I pulled out of my ***) the cost for every sub is $181 over a five-year period, so a net cost of $3 per month for every subscriber.

Now factor in the number of subs who subscribe to NFLST at the cost of $199 - I'm guessing 1 million subs, so the $2 billion can be brought down to $1.8 billion, bringing the remaining cost per sub to $163, divided over five years is $2.75 per month per subscriber.

Now factor in the number of commercial licenses and the cost per sub comes down more. I'm nst sure how much D* charges for commercial licenses, but I'm sure they make a lot of money from them as well as individual subscribers.

Also, since D* has had NFLST in the past, the of the previous contract can be figured into these net costs. If the previous contract was $1 billion or whatever, the $2 billion of the new contract is an increase of $1 billion, not the full $2 billion. Does that make any sense?

Even if D* raised my rates $3.00 per month, it will still be cheaper by $1.00 each month, than it was when I first subscribed, and still comparable to the closest package offered by the competition. I'm not saying that I want my rates increased, but it is a calculated risk by D* and we'll just have to see how it all works out.

Let's not forget that when Directv realigned their packages last year, most subscribers went down a few dollars each month.


NFLST is a great marketing tool, and the main (that and MLBEI) difference between the two companies. Eveyone I know that has NFLST says it is worth the money, and everyone I know renews every year. If a went up a few dollars every year, I'm guessing almost every NFLST subscirber would still renew.

[DCSholtis]

Karl_f...No matter how much that package price might go up next year...I will definately re-up your right about the Ticket and MLB EI....

[Win Joy Jr]

Hey, Bob...

How much is Charlie making YOU pay for the failed merger???

[Bob Haller]

I think the 600 million was a great INVESTMENT! The chance to look thoroughly thru your competitor. See what they are paying for everything. Their agreements and such. It was a bargain...

[Karl Foster]

So, let me get this straight, it is good investment to use lots of money in a failed merger attempt, but a bad investment to keep the premiere sports package exclusive.

What is so special about looking through Directv's books? I'm sure they can call the individual stations and find out how much Directv is paying them. There are always moles willing to give up information. I really don't think looking through Directv's books is worth $600 million. Their financial data can be found in their annual report available to their shareholders.

Let's not forget, also, that Directv got a look into Echostar's books as well. So in essense, if you look at it this way, E* paid Directv to look in their own books.

No matter what anyone says, you won't be convinced, but I don't think you'll be seeing Directv subscribers leaving in droves because of NFLST.

[Chris Freeland]

That $600M was a drop in the bucket, you guys are making to much out of this. Charlie got away cheep, now he does not have to pay an inflated $2.7B for PanAmSat. Charlie can now invest that $2.7B back into E*, why do you think that E* stock went up immediately after the deal was called off and D* stock went down?

[platinum]

charlie has a huge debt load

[Martyva]

That's not all that Charlie has that's huge.

[Win Joy Jr.]

Oh, by the way Bob, Roxanne got to look at Charlie's books also. You just are not willing to accept that fact, now are you???

And, thanks for part of your monthly bill going to DirecTV... NFLST sponsored by Charlie & Bob!

And, as a parting thought, Charlie may not get a chance to use all of the money raised. See, with some funding deals, there are conditions on how the money is used. So, no all of it may be available to grow E*...

[James_F]

Why is it Dish subs are so concerned with DirecTV prices going up? I have DirecTV for only two reasons, MLB EI and NFLST. Rates won't go up because of this because they'll just raise the rates of the package and people will pay it. Don't compare it to TNT raising their rates.

[raj2001]

Originally posted by James_F
Why is it Dish subs are so concerned with DirecTV prices going up?

I think its envy that the merger didn't go through and they didnt get NFL ST.

[raj2001]

Originally posted by Bob Haller
I think the 600 million was a great INVESTMENT! The chance to look thoroughly thru your competitor. See what they are paying for everything. Their agreements and such. It was a bargain...

Wow, are you guys going to war against DirecTV?

[jeffwtux]

Echostar has made more than 600 million in the last 6 months from Vivendi. They just made about $175 million from a stock buy-back at a discounted price. These one time costs don't affect programming rates, only the available cash.

[Giants Fan]

There are 1.4 million NFLST subscribers this year, and the number has grown between 15% and 20% a year for the past three years. So, extrapolating out conservatively, that's 1.6 million next year, 1.9 million in year 2, 2.2 million in year three, 2.5 million in year 4 and 2.8 million in year 5. that gives us a total of 11 million NFLST subscribers over the 5 year term of the contract. So, breakeven is $180 per NFLST subscriber. Guess what - that's the CURRENT price.

[Bob Haller]

Your assuming that 180 is all profit. Somehow thats doubtful....

[Win Joy Jr]

And, you are not factoring in the high cost subs like Bars that subscribe to NFLST. Those rates are set by the capacity on the Fire Marshall sign. And I can tell you, it's not cheap...

[James_F]

Exactly, no one is saying they make money on it. It keeps people like me who would have digital cable if not for NFLST.

[Bob Haller]

How do you accunt for Charlies public statement that all subs rates would go up to cover the cost of the NFL?

Cerytinally if it would cover its costs charlie would have continued bidding...

[Mike123abc]

NFLST is the best thing that DirectTV has going for it. It is an unique product that has huge appeal for a large audience. The main purpose of it is to attract subscribers to DirectTV. It is what is called a "loss leader" not meant to be a profit center but like a grocery store putting Coke on sale to attract people in to buy tons of other stuff. They also hope it attracts people that will stay with the service, reducing churn and be wealthier and buy more packages.

[Karl Foster]

Originally posted by Bob Haller
How do you accunt for Charlies public statement that all subs rates would go up to cover the cost of the NFL?

Cerytinally if it would cover its costs charlie would have continued bidding...

He wouldn't be telling a half-truth or other negotiating tactic would he? During the TNT - NESN debacle, you all said it was negotiating tactics. During the ESPN Classic, ABC Family deal, it was standing up to the big companies. When he gets what he wants you guys all say he is brilliant, when he doesn't, he is still brilliant. I don't get it sometimes. He is defended vehemently no matter how good or bad his decisions are.

Truth is, he got outbid by Directv. It was a business decision. Those who want NFLST know where to go. You can't have it all.

[James_F]

Just because Dish says they would have to raise rates doesn't mean that others would. Of course they have to say it because they have to show their subs why they don't have it.

[Greg Bimson]

Someone needs to look at the current broadcast contracts between the NFL and the NFL Sunday afternoon package providers, FOX and CBS.

FOX and CBS would have had to approve any move the NFL made to get Sunday Ticket off of DirecTV. Echostar never stood a chance; FOX would have vetoed any deal between the NFL and Echostar for Sunday Ticket. And before anyone asks, yes, FOX and CBS both have that kind of power on the NFL, only regarding this issue.

Didn't Mr. Ergen also say that since the merger didn't occur, all Dish Network rates would have to go up? And doesn't the rate freeze on Dish Network end March, 2003?

So, rates are going up to pay for the failed merger?

[Giants Fan]

Originally posted by Bob Haller
Your assuming that 180 is all profit. Somehow thats doubtful....
It DOES cover the INCREMENTAL cost of NFLST. There are almost no additional costs beyond the fee to the NFL. There is some more marginal cost increase for the extra billing, and some marginal cost for management of the feeds and monitoring, but that's pretty small potatoes.

The point is that if you do the reverse math, and look at the cost versus revenue for the current contract, you come up with a similar number. So the new contract will not add or subtract any costs for DirecTV, as long as they continue to grow the subscriber base.

As to Charlie's comments about "raising rates" if E* went after Sunday Ticket, he said the same thing about YES network. Yet DirecTV added the channel and within a few eeks LOWERED everybody's rates. Just because Charlie says it, doesn't make it true.

[Win Joy Jr]

Originally posted by Bob Haller
How do you accunt for Charlies public statement that all subs rates would go up to cover the cost of the NFL?

Cerytinally if it would cover its costs charlie would have continued bidding...