Disney, Apple and Amazon keep waiting as NFL considers Sunday ticket offers

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

Peter Barreras | AP

Disney, Apple and Amazon have all submitted bids to become the new broadcast rights owners of the National Football League’s out-of-market Sunday ticket package. They are just waiting to find out who wins.

According to people familiar with the matter, all three companies had placed bids weeks ago. The NFL remains in discussions with all three bidders as it decides which partner it will choose, said the people, who did not wish to be named because the talks are private.

The NFL wants any buyer to pay more than $2 billion for the rights and stake in NFL Media, which is being packed with Sunday Ticket, three people said. The NFL’s mobile rights may be part of the package, as well, because its previous mobile agreement with Verizon has expired.

DirecTV paid $1.5 billion per year for Sunday Ticket for the existing rights, which will expire after the upcoming 2022–23 season. Sources said the NFL pushed for a 100% increase for its primary game packages last year, but there is little chance the league will get $3 billion for Sunday Ticket, which historically lost money to DirecTV. Have given.

Many observers, including some bidders, have expressed surprise that a deal has not yet taken place. Two people said the delay was related to the mix of assets and negotiations of the partnership involved in the deal negotiations. If the discussion had centered only around the Sunday ticket, there would probably have been an agreement already, said one of the people.

There’s no urgency to the announcement, as DirecTV will already be offering Sunday tickets for the upcoming season. Bidders will want to make a deal sooner rather than later because they want enough time to alert consumers that the owner of Sunday Ticket rights will change.

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

Role of DirecTV

DirecTV requires that all Sunday Ticket package owners also be DirecTV subscribers. That stipulation will no longer apply to this new deal, opening up packages to many new customers who no longer shy away from spending hundreds of dollars on packages because they didn’t want DirecTV.

DirecTV is not bidding on the existing rights package but is willing to strike a deal with the winning buyer, the two people said. A settlement, if reached, could reduce the financial burden for the winning streaming platform.

DirecTV is interested in maintaining relationships with bars and restaurants. Sunday Ticket is a staple at sports bars that use game packages to bring in fans of non-local sports, 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 acting as a residential pass-through. Under such an agreement, it may transfer all revenue rights for Sunday Ticket to the owner but still offer it to customers. This will allow DirecTV to reduce churn while reducing switching costs for consumers. It will also backstop any potential streaming latency or reliability issues that may come with live football broadcasts over broadband.

However, it is not clear whether the winning bidder would be interested in such a partnership. Building a business relationship to Disney, Apple or Amazon can be lucrative, and the winner may want to be a direct contact for all Sunday Ticket customers.

AT&T spun off DirecTV last year. It is now a privately held independent company co-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 was dependent on renewing a long-term contract with the NFL. But fewer than 2 million customers typically sign up for the package each year, making Sunday Ticket a money-loser for the satellite TV provider, which is now bidding on the full rights, according to a person familiar with the matter. Not interested in putting

A DirecTV spokesperson declined to comment.

various obstacles

While Amazon has already acquired the exclusive Thursday Night Football rights and Disney’s ESPN has Monday Night Football, Apple will represent a new global partner for the NFL — one with the largest corporate balance sheet in the world. This is attractive to the NFL because it potentially brings a new bidder to the table for future deal negotiations.

Apple has demonstrated its ability to broadcast live sports this year by streaming Major League Baseball games, though some fans, especially older ones, have complained about the special streaming package. Apple also agreed to stream Major League Soccer games earlier this month in the announcement of a 10-year deal. Amazon will be the first exclusive streaming provider for NFL games when it launches Thursday Night Football this year.

Two people said Apple would like to own the global rights to Sunday Ticket. One of the people said that the NFL has not reached the stage of its discussions with Apple, where it has been decided whether it will give the company away or sell them separately. DirecTV currently only has US rights.

It is also unclear whether Apple or Amazon are interested in buying a minority stake in NFL Media, which includes cable networks NFL Network and RedZone, and digital site NFL.com. Both technology companies may have little interest in the legacy pay-TV business, which is bleeding millions of customers every year. But if the league is linking the Sunday Ticket to an NFL media transaction, the two companies could bite the bullet to strike a deal.

It’s also possible that the league may eventually decide to separately sell a stake in NFL Media, one of the people said.

According to people familiar with the matter, a buyer will have limited flexibility on pricing.

When the NFL signed contracts with CBS and Fox, the deals included language that mandated a premium price of Sunday tickets, so that Sunday afternoon games acquired by broadcast networks would not attract too much attention from the local market. Do it, said three people.

This means that no owner of Sunday Ticket rights will be able to reduce the price on out-of-market packages, which typically cost around $300 per year. This prevents an existing streaming service, such as ESPN+, from being added to Sunday Ticket at little or no additional cost to promote subscribers.

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