Disney, Apple, and Amazon wait while the NFL considers Sunday Ticket offers

DK Metcalf, of the Seattle Seahawks, during a meet-and-greet with DIRECTV NFL SUNDAY TICKET subscribers at the DIRECTV NFL SUNDAY TICKET Lounge on Saturday, February 1, 2020, in Miami, Florida.

Peter Barreras | AP

Disney apple And the Amazon All bids have been submitted to become the new owner of the broadcast rights for a Sunday out-of-market package of the NFL. They are just waiting to see who will win.

The three companies submitted bids weeks ago, according to informed sources. The people, who asked not to be named because negotiations are private, said the NFL is still in discussion with all three bidders as it decides which partner to choose.

Three people said the NFL wants any buyer to pay more than $2 billion for rights and a stake in NFL Media, which is packaged with the Sunday Ticket. NFL mobile rights could be part of the package, too, since the former Mobile Agreement with Verizon is over.

DirectTV You pay $1.5 billion a year for a Sunday ticket for current rights, which expire after the upcoming 2022-23 season. NFL Paid for 100% increments For core game packages last year, but there’s little chance the league will get $3 billion for the Sunday Ticket, which has historically lost money to DirecTV, sources said.

Several observers, including some of the bidders themselves, have expressed surprise that the deal has not yet been completed. Two people said the delay relates to the asset mix and associated partnership talks in the deal talks. One person said that if discussions centered only on the Sunday Ticket, it is likely that an agreement has already been reached.

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There’s no urgent need to announce, as DirecTV will already be offering the Sunday Ticket for next season. Bidders want to close the deal sooner rather than later because they want enough time to alert consumers that the owner of the Sunday Ticket rights will change.

Spokesmen for Amazon, Apple, Disney and the NFL declined to comment.

The role of DirecTV

DirecTV has asked all owners of Sunday ticket packages to become DirecTV customers as well. This condition will no longer apply to this new deal, opening the package to many new subscribers who will no longer refuse to spend hundreds of dollars on the package because they don’t want DirecTV.

Two people said DirecTV is not bidding on the current rights package but is willing to cut a deal with the winning buyer. The agreement, if reached, could ease the financial burden on the winning streaming platform.

DirecTV is interested in maintaining the relationship with bars and restaurants. The Sunday Ticket is a staple of sports bars that use the game package to attract fans of non-local games, most of whom have no other way to watch their favorite team. The Sunday Ticket is also popular with sports gamblers who want to watch multiple games at the same time.

DirecTV will also consider serving as a residential corridor. Subject to such agreement, it may transfer all revenue from Sunday Ticket to the rights holder while still being offered to customers. This will allow DirecTV to mitigate disruption while reducing switching costs for consumers. It will also support any potential broadcast latency or reliability issues that may come with streaming live football over broadband.

However, it is unclear whether the winning bidder would be interested in such a partnership. Building a business relationship may be tempting for Disney, Apple, or Amazon, and the winner may want to be the direct contact for all Sunday Ticket subscribers.

AT&T weave it out DirecTV last year. It is now an independent, privately held company jointly owned by AT&T and private equity firm TPG. When AT&T acquired DirecTV in 2015, the Sunday Ticket rights were so important that the entire $49 billion deal He was subject to a long-term contract renewal with the NFL. But fewer than 2 million subscribers typically sign up for the bundle each year, making the Sunday Ticket a money-saver for the satellite TV provider, which is no longer interested in bidding for full rights, according to a person familiar with the matter.

A DirecTV spokesperson declined to comment.

Various obstacles

while amazon Already got exclusive Thursday Night Football rights And Disney’s ESPN owns Monday Night Football, and Apple will represent the NFL’s new global partner — with the world’s largest corporate balance sheet. This is attractive to the NFL because it will likely bring a new exhibitor to the table in future deal talks

Apple demonstrated its ability to stream live sports this year by broadcasting Major League Baseball matches, although some fans, especially older ones, have Complain about the exclusive broadcast package. Apple also agreed to broadcast Major League Soccer matches in an announcement of a 10-year deal earlier this month. Amazon It will be the first exclusive streaming provider of NFL games When I started carrying Thursday Night Football this year.

A couple of people said Apple would like to own global rights to the Sunday Ticket. One person said the NFL hasn’t gotten to the point of its discussions with Apple deciding whether to give it to the company or sell it separately. DirecTV currently owns rights only in the United States.

It’s also unclear whether Apple or Amazon has an interest in buying a minority stake in NFL Media, which includes cable networks NFL Network, RedZone, and digital website NFL.com. Both tech companies may not care much about the old pay-TV business, and they are Millions of subscribers bleed every year. But if the league ties the Sunday Ticket to an NFL Media deal, both companies can back it up to seal a deal.

It’s also possible that the league will eventually decide to sell the stake in NFL Media separately, one person said.

The buyer will also have limited pricing flexibility, according to people familiar with the matter.

When the NFL signed contracts with CBS and Fox, the deals included language stating that the Sunday Ticket had a premium price so as not to draw too many eyeballs away from the local Sunday afternoon market, which the broadcast networks acquired, three people said. .

This means any Sunday Ticket owner won’t be able to drastically lower the price on the out-of-market package, which typically costs around $300 per year. It also prevents an existing streaming service, such as ESPN+, from simply adding a Sunday ticket at little or no additional cost to increase subscribers.

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