Suitors Vie for 'Sunday Ticket'
If you're an NFL fan, "NFL Sunday Ticket" is, well, just the ticket. If you have it, all Sunday games are available-except for the Sunday night game on ESPN-thus eliminating complaints about which games the networks pick. The games are on successive channels, so it is easy to surf.
The package is reasonably priced at $179 for existing subscribers and $199 for new subscribers as part of a fall promotional package.
"NFL Sunday Ticket" is by far the most popular sports package of its kind. It has been around since 1995, but only on DirecTV and old C-band satellites.
That may change. By next season, "NFL Sunday Ticket" may also be available on digital cable. Or maybe on only digital cable.
DirecTV's deal with the NFL expires at the end of this season. A new deal is being negotiated, and digital cable wants at least a piece of the action, if not an exclusive deal.
The negotiations have been going on for several months, but are intensifying.
The NFL this week brought in Steve Bornstein, former president of both ABC and ESPN, to help with the negotiations. Bornstein was named senior advisor to Commissioner Paul Tagliabue.
"We are at an important and opportune time in the area of NFL television," Tagliabue said. "We must consider our alternatives with respect to our 'NFL Sunday Ticket' satellite package and the evolving digital cable universe.
"We will focus intensively on the NFL's strategic choices. Steve Bornstein's extensive experience and knowledge of broadcast, cable and new media will be a tremendous asset to us in this task."
So where is "NFL Sunday Ticket" headed?
"We are confident we can make a new deal," said Michael Thornton, DirecTV's senior vice president of programming and acquisitions. "Getting it exclusively may be another story."
Digital cable provider InDemand, as well as several major cable companies such as Comcast and Time Warner, are also after the package. Comcast and Time Warner own stakes in InDemand.
It's believed "NFL Sunday Ticket" is now in about 1.3 million homes. The addition of digital cable could push that figure to 3 million in the not-too-distant future. If that were the case, and if the price were to go to $200, the package could conceivably generate $600 million a year.
That's about what each of the four network carriers-Fox, CBS, ABC and ESPN-now pay.
DirecTV now pays about $150 million a year for "NFL Sunday Ticket." Media analysts expect that fee to more than double, which would mean a pretty good chunk of change for the NFL.
One problem, though. There's the eight-year, $17.6-billion contract with the networks to be concerned about. If "NFL Sunday Ticket" takes too many eyeballs away from the free Sunday telecasts on CBS and Fox, that's not good from the league's standpoint.
"We'd rather the package be supplemental and not dilute the network package," said NFL spokesman Brian McCarthy.
However, McCarthy said there were provisions in the contracts with CBS and Fox that provide for monetary compensation.
It is believed that CBS and Fox now are compensated $8 million-$15 million annually.
Increased compensation would help CBS and its parent company, Viacom, and Fox and its parent company, News Corp., offset their financial shortfalls on pro football.
"We're losing hundreds of millions of dollars on our NFL contract," News Corp. President Peter Chernin told Cable World magazine. "If the NFL finds a way to make tens of millions of extra dollars, we would expect to see some of that shared with us."
A potential problem for DirecTV is its uncertain future. A merger was announced last October in which EchoStar would take over DirecTV for $25.8 billion, pending approval by the Federal Communications Commission. The merger would give EchoStar, which owns the Dish Network, control of the satellite industry. But EchoStar and its controversial chief executive, Charlie Ergen, are facing resistance.
There's a possibility that the merger will not be approved by the FCC, which is expected to make a ruling by early November. If the merger is not approved, that will open the door for Rupert Murdoch's News Corp., which also attempted to buy DirecTV from its parent company, General Motors, to get back into the picture.
But DirecTV's Thornton says the proposed merger and the resistance have not affected negotiations with the NFL.
"It's still business as usual," he said.
Whatever way the NFL goes-a new exclusive deal with DirecTV, an exclusive deal with digital cable or a combination of the two-options are key for viewers.
Ideally, in future years the pay package will become more available but not to the detriment of free telecasts.