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The NFL and DirecTV are close to a deal for Sunday Ticket


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#1 OFFLINE   avonabudget

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Posted 25 August 2014 - 08:36 AM

The NFL and DirecTV are close to a deal for Sunday Ticket

 

Every few years, cable customers are allowed to feel just a bit melancholy, as the NFL continues to reject their business for the NFL Sunday Ticket product. It appears that will again be the case, as the next negotiations seem to be wrapping up on a long-term deal. The NFL will remain satellite-only.

The league and DirecTV are closing in on a new deal for the satellite provider to continue to be the exclusive home of the network’s out-of-market viewing service. A “broad agreement” has apparently been reached, but numerous details — ancillary programming, NFL Network carriage, Rich Eisen’s new DirecTV talk show — have been bogging down the two sides in terms of getting the deal 100% done. AT&T’s acquisition of DirecTV has also complicated things. The deal will likely be for a total of $1.3 to $1.4 billion.

 


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#2 OFFLINE   tonyd79

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Posted 25 August 2014 - 09:36 AM

Another article on the deal:

 

http://www.sportsbus...ia/DirecTV.aspx

 

A couple of interesting things from that article:

 

Negotiations have slowed because of the sheer amount of NFL programming beyond just Sunday Ticket. Over the past year, DirecTV and the NFL have negotiated everything from NFL Network carriage to NFL Network analyst Rich Eisen’s new talk show. Eisen’s show debuts in October and is a partnership between DirecTV and the NFL’s over-the-top service, NFL Now. All of these talks are interrelated with Sunday Ticket.

 

and

 

In the past, cable operators expressed interest in picking up the package from DirecTV, though the multiple system operators did not have serious discussions with the league this time. Cable operator executives have said that the popularity of the sports-tier whip-around channel NFL RedZone mitigates their desire for the entire Sunday Ticket package.

DirecTV rival Dish Network has said that it would be interested in bidding for the package, but its executives did not have serious talks either. NFL executives have talked to Google about a possible deal, but sources said those talks never got past the preliminary stages.

 

So, it is mostly DirecTV or nothing for Sunday Ticket at this point.


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#3 ONLINE   Laxguy

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Posted 25 August 2014 - 09:43 AM

Here's another excerpt from Awfulannouncing.

 

 

The NFL’s revenue stream from mere media rights deals will hit $7 billion a season.

2014 will be the NFL’s 20th season with DirecTV, and it will remain a big reason for many who choose satellite over cable. It still dictates bar culture across the country on Sunday afternoons. The NFL remains all-powerful and all-wealthy, and Sunday Ticket’s exclusivity remains a big part of that empire.

Mighty nice round number, that $7B!


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#4 OFFLINE   fudpucker

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Posted 25 August 2014 - 10:17 AM

It's the sole reason I switched recently from Dish to Directv.



#5 OFFLINE   harsh

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Posted 25 August 2014 - 11:16 AM

The $1.3-1.4B number is for just the 2015 season and reportedly may go up by 4% or more per year.

That the article said the total was in that range is ludicrous. It could represent as much as a $5.943B deal over four years.

The last extension (2011-2014) cost DIRECTV $1B per year.

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#6 OFFLINE   TheRatPatrol

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Posted 25 August 2014 - 11:18 AM

Already being discussed here > http://www.dbstalk.c...deal/?p=3284503

#7 OFFLINE   avonabudget

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Posted 25 August 2014 - 12:48 PM

Already being discussed here > http://www.dbstalk.c...deal/?p=3284503

There were no posts since April. New thread created with updated developments. Mods can merge or delete as appropriate.


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#8 OFFLINE   slice1900

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Posted 25 August 2014 - 02:52 PM

Given that Sunday Ticket has a lot less value than it did a few years ago, thanks to the Red Zone channel and more games not covered on it (Thursday night, two games on some Mondays) and talk of games on Wednesday and even on Saturday during college I'm surprised Directv would be willing to pay any increase at all.


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#9 OFFLINE   harsh

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Posted 25 August 2014 - 04:52 PM

Given that Sunday Ticket has a lot less value than it did a few years ago, thanks to the Red Zone channel and more games not covered on it (Thursday night, two games on some Mondays) and talk of games on Wednesday and even on Saturday during college I'm surprised Directv would be willing to pay any increase at all.

They're certainly between a rock and a hard place on this negotiation.

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#10 OFFLINE   dcowboy7

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Posted 25 August 2014 - 07:48 PM

Given that Sunday Ticket has a lot less value than it did a few years ago, thanks to the Red Zone channel and more games not covered on it (Thursday night, two games on some Mondays) and talk of games on Wednesday and even on Saturday during college I'm surprised Directv would be willing to pay any increase at all.

 

The opening monday is the only monday with 2 games 

 

Never heard any talk of wednesday games

 

Due to congressional laws the nfl cant play friday/saturday against college from around early september thru early december


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#11 OFFLINE   dcowboy7

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Posted 25 August 2014 - 07:53 PM

The $1.3-1.4B number is for just the 2015 season and reportedly may go up by 4% or more per year.

That the article said the total was in that range is ludicrous. It could represent as much as a $5.943B deal over four years.

The last extension (2011-2014) cost DIRECTV $1B per year.

 

To me it sounds like it starts 1.3 & then increases to 1.4 by the end of the deal:

 

http://www.sportsbus...ia/DirecTV.aspx



#12 OFFLINE   tonyd79

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Posted 26 August 2014 - 07:45 AM

Given that Sunday Ticket has a lot less value than it did a few years ago, thanks to the Red Zone channel and more games not covered on it (Thursday night, two games on some Mondays) and talk of games on Wednesday and even on Saturday during college I'm surprised Directv would be willing to pay any increase at all.


Looks like directv is getting over the top rights as well plus the deal would include ATT.

A lot of directv's money on Sunday ticket comes from bars. They would still want the package.
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#13 OFFLINE   slice1900

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Posted 26 August 2014 - 01:14 PM

Looks like directv is getting over the top rights as well plus the deal would include ATT.

A lot of directv's money on Sunday ticket comes from bars. They would still want the package.

 

Directv can't negotiate for AT&T at this time. At best, they could add something to the contract that states that the same price includes up to x million additional subscribers as a result of merger/acquisition, but that would leave them overpaying if that deal was shot down by the government.

 

As the price goes up, some bars will drop NFLST. Some of the smaller places around here already have over the past few years as the price keeps going up by 10% a year. If they bump the contract another 30-40% as it sounds like they're doing, most of that increase will be passed to the commercial side, since half of residential customers who get it do so as a freebie, and they'd probably lose more than a few if they tried to bump the price from $299 to $399. I'm not close to dropping it, but if the price went up by another 50% I'd have to take a hard look at whether it is really worth having.


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#14 OFFLINE   renbutler

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Posted 26 August 2014 - 02:39 PM

Given that Sunday Ticket has a lot less value than it did a few years ago...

 

I hear that a lot, but a.) it's subjective and b.) easy to refute.

 

Red Zone is fine for some people, but many of us have no use for it. Also, the shift to a full slate of Thursday games is a loss of less than 5% of the overall NFL schedule.

 

Thanks, cowboy, for clearing up the other issues with slice's post.



#15 OFFLINE   renbutler

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Posted 26 August 2014 - 02:41 PM

As the price goes up, some bars will drop NFLST. Some of the smaller places around here already have over the past few years as the price keeps going up by 10% a year. If they bump the contract another 30-40% as it sounds like they're doing, most of that increase will be passed to the commercial side, since half of residential customers who get it do so as a freebie, and they'd probably lose more than a few if they tried to bump the price from $299 to $399. I'm not close to dropping it, but if the price went up by another 50% I'd have to take a hard look at whether it is really worth having.

 

a.) The price of Sunday Ticket dropped significantly just a couple years ago.

 

b.) It's highly unlikely that "half" of Sunday Ticket subscribers get it for free.

 

c.) They aren't going to increase the price by $100 in a single year or even two or three years.



#16 OFFLINE   tonyd79

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Posted 26 August 2014 - 04:28 PM

Directv can't negotiate for AT&T at this time. At best, they could add something to the contract that states that the same price includes up to x million additional subscribers as a result of merger/acquisition, but that would leave them overpaying if that deal was shot down by the government.

 

As the price goes up, some bars will drop NFLST. Some of the smaller places around here already have over the past few years as the price keeps going up by 10% a year. If they bump the contract another 30-40% as it sounds like they're doing, most of that increase will be passed to the commercial side, since half of residential customers who get it do so as a freebie, and they'd probably lose more than a few if they tried to bump the price from $299 to $399. I'm not close to dropping it, but if the price went up by another 50% I'd have to take a hard look at whether it is really worth having.

 

Who said they are negotiating for AT&T? A potential merger is a complication.

 

If structured like previous contracts, DirecTV is paying a flat fee to the NFL and then marketing the product and reaping whatever they get in sales. Profit and loss is there issue. What I am saying is that DirecTV is probably factoring in (from their judging of the value) the potential customers from a merger that looks like it will go through during the contract period. It is still a risk. They may overpay a bit if the merger falls through but they are probably not balking at the price if they can extend it to any merged company.

 

As for your pricing analysis, I will go with the DirecTV guys on their projections over yours. I think their economic modeling has held up well over the years. Hell, they dropped the price for non-commercial accounts recently. I am sure they plugged that into their model and decided it made sense. And here they are coming back for more, so that is pretty good evidence that they are not in any kind of financial trouble with Sunday Ticket.

 

Of course, there are those who will say DirecTV needs ST or they lose too many customers, despite the actual numbers that show a minority of DirecTV households sub to ST. They are interested in the business customers, though. They are important to ST. And I think they know that.

 

Me, I don't care what they pay for it. I just care what I pay for it. When prices are set per sub, that has a more immediate impact on my pricing. When it is a flat fee, it does not as it is dependent on how successful they are in pricing it.


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#17 OFFLINE   renbutler

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Posted 27 August 2014 - 12:47 PM

 

Of course, there are those who will say DirecTV needs ST or they lose too many customers, despite the actual numbers that show a minority of DirecTV households sub to ST.

 

I don't know how many ST subscribers there are, but even if only 5% subscribed, that's a lot of subscribers at risk, and losing that many would be a major blow.



#18 OFFLINE   tonyd79

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Posted 27 August 2014 - 01:25 PM

I don't know how many ST subscribers there are, but even if only 5% subscribed, that's a lot of subscribers at risk, and losing that many would be a major blow.

 

Who says they lose them? You are making a lot of assumptions. Where do they go? Sunday Ticket won't be anywhere else. DIrecTV would wind up with Red Zone like everyone else. So, they don't leave in droves. A few may leave but that would be for other reasons not just because Sunday Ticket is gone.

 

Then let us do the math. If DirecTV is not spending a billion plus a year and loses 5% of its customers.

 

$1 billion per year

20 million customers

 

5% of 20 million is 1 million

 

Savings of $1 billion. To make up savings, each customer lost would have to spend $83 per month. A bit lower than what those customers pay but not devastating. Not a major risk.

 

Rather than looking at risk, I think DirecTV is looking at gains. That is why they are talking over the top digital rights.


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#19 OFFLINE   dcowboy7

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Posted 27 August 2014 - 04:58 PM

You also have to factor in all the bars/clubs with ST that may drop directv as well & thats really where directv gets $$.

 

Now they keep directv from january to august too so that would be another 8 months of $$ that would be gone.



#20 OFFLINE   tonyd79

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Posted 27 August 2014 - 06:02 PM

You also have to factor in all the bars/clubs with ST that may drop directv as well & thats really where directv gets $$.
 
Now they keep directv from january to august too so that would be another 8 months of $$ that would be gone.


Again. Where are they going to go? If directv doesn't have Sunday ticket, no one will. Directv still delivers more sports bar type stuff than anyone else.
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