AT&T-DirecTV merger may hinge on NFL agreement

Reuters

If DirecTV is unable to strike a deal with the National Football League to renew the satellite TV operator's contract to offer the popular NFL Sunday Ticket football package, AT&T Inc can pull out of the merger, according to a regulatory filing.

In a filing related to the merger, the companies said, "the parties also have agreed that in the unlikely event that the Company's agreement for the 'NFL Sunday Ticket' service is not renewed on substantially the terms discussed between the parties, AT&T (Dallas, TX, USA) may elect not to consummate the merger."

The current DirecTV (El Segundo, CA, USA) offer allows subscribers to watch football games outside of their local markets on Sundays. The exclusive package, which costs subscribers up to $300 a year, is an important tool for DirecTV to attract subscribers and the company has said about 2 million people receive the service.

Investors have been watching closely to see whether DirecTV would renew the Sunday Ticket contract with the NFL, estimated to be worth $1 billion annually, with the potential to rise in value as part of a new agreement.

The filing said that if a renewal isn't struck, AT&T will not be able to claim damages as long as DirecTV used its best efforts to get a deal done with the NFL.

On a conference call with analysts on Monday, DirecTV CEO Mike White said he and AT&T Chief Executive Randall Stephenson had spoken with NFL commissioner Roger Goodell as well as New England Patriots Owner Robert Kraft who heads the league's broadcast committee, and the parties were in "positive and constructive" discussions with the league.

"I am still highly confident that we are going to get our deal done," White said, adding he expects a pact to be agreed by the end of the year, which would be before the merger closes.

AT&T has said it expects the merger to take a year to close.

Representatives from AT&T, DirecTV and the NFL did not immediately respond to requests for comment.

A contract that renews DirecTV's exclusive deal would give the satellite operator a key marketing advantage over cable operators. Cable companies sought a deal in 2009, but DirecTV ended up renewing its agreement with the NFL for four years.

The current agreement is due to expire at the end of the 2014-15 season, meaning there is one season to go under the previous terms.

DirecTV shares traded down $1.90, or 2 percent, in early trading Monday at $84.30 while AT&T shares fell 74 cents, or 2 percent, to $36.

ArticleTools

Featured Reports

Content Delivery Networks (CDN) 2015
Content Delivery Networks (CDN) represent large distributed system of servers deployed in multiple data centers across the Internet. CDNs provide solutions for efficiently and effectively managing content of all types. Solutions include core services such as aggregation, management, and distribution of content as well as a variety of value-added functionality.

 

Cable Carrier Wi-Fi: MSO Take MNO Market Share
How does a cable provider gain a bigger piece of the telecom market pie chart? With a clever Wi-Fi strategy, cable providers are in a unique position to dominate the residential and business telecommunications markets. This is the portent of things to come in the very near future: an MSO as MNO play.

 

Structured and Unstructured (Big) Data in Telecom Analytics
This report provides the reader with a broad understanding of telecom data (structured and unstructured/big data) and related analytics. The report identifies market drivers and opportunities as well as forecasts for certain key growth areas such as deep packet inspection.

 

Affordable Market Reports on Big Data, IoT, CDN & More!
Access the exclusive new series of market research reports brought to you through the partnership of Mind Commerce research and TelecomEngine.com.
Browse the latest titles

 

 

Featured Events & Partners

GEN 15
Nov. 16-19, 2015

Omni Hotel, Dallas, Texas

The global gathering of networking professionals enabling the future of agile, assured and orchestrated services powered by CE 2.0, LSO (Lifecycle Service Orchestration), SDN and NFV.

Visit event website...