AT&T-DirecTV Deal May Hinge on NFL Sunday Games Rights

Telecom giant AT&T is poised to acquire DirecTV for $49 billion, but that deal could fall through if DirecTV fails to renew its “Sunday Ticket” offering with the NFL. The current DirecTV deal with the NFL, which allows the satellite company to broadcast all out-of-market NFL football games on Sunday afternoons to TVs and mobile devices, expires at the end of the 2014 football season. AT&T hopes to become a major broadcasting partner of the NFL with the acquisition of DirecTV.

DirecTV has had “Sunday Ticket” rights since it started offering TV service 20 years ago. According to The Wall Street Journal, “Roughly one out of 10 subscribers has the ‘Sunday Ticket’ package, which starts at $240 a year.” The deal with the NFL for these rights costs DirecTV about $1 billion per year.

The NFL could approach other companies with a “Sunday Ticket” offer because the exclusive negotiating window for the NFL and DirecTV to work out a renewal has already passed. However, DirecTV Chief Executive Mike White, along with a member of NFL’s broadcasting committee, are confident that a deal can still be reached.

NFL rights are becoming increasingly important in the competition between telecom companies. Last year, AT&T’s rival Verizon signed a $1 billion deal with the NFL to air Sunday night, Monday night, Thursday night, and home-market Sunday afternoon games on Verizon wireless phones. By streaming games on phones, telecom companies can make more money by racking up data fees as both Verizon and AT&T move away from unlimited data plans.

Related Stories:
AT&T CFO Says DirecTV to Negotiate NFL Deal Independently, Reuters, 5/21/14
AT&T Will Retain U-verse TV, Won’t Force Customers to Switch to DirecTV, Variety, 5/21/14