Q. I read that the NFL might take the Sunday Ticket away from DIRECTV. How could that happen? Don’t they have a long-term agreement? I mean, if this happens, I will dump DIRECTV the next day. — Freddie, Shaker Heights, Ohio.
Freddie, DIRECTV in 2014 signed an eight-year agreement with the NFL for the exclusive rights to the Sunday Ticket, which, as you know, includes all out-of-market Sunday afternoon games. The deal, which was signed for a reported $1.5 billion a year, runs through the 2022 season.
However, Sports Business Journal, and a few other publications, have reported that DIRECTV’s agreement with the NFL gives the league the right to opt-out following the 2019 season. There is no word from league officials that they will take this action, but the promise of an even more lucrative agreement with an ambitious live streaming service (think Amazon or Google) might persuade them to do so.
Last year when news of the opt-out surfaced, I wrote that I thought AT&T (DIRECTV’s owner) would do whatever’s necessary to keep the Ticket, even if it meant raising their investment. DIRECTV, which has owned the exclusive rights to the Sunday Ticket since its inception in 1994, has been losing subscribers and therefore could not afford letting such a popular sports package go. That could mean the defection of even more customers.
But I’ve changed my view since that article.
Since buying DIRECTV in 2015, AT&T has done little to enhance the experience of DIRECTV subscribers. There have been no great technological introductions, nor an significant increase in 4K or even HD channels. AT&T has basically sat pat on DIRECTV with the exception of the annual price increase. While AT&T says it’s still committed to making DIRECTV a top-quality TV service, actions speak louder than words. And AT&T’s actions have said it’s not interested in spending serious money to improve DIRECTV.
In contrast, AT&T has focused considerable attention and money on DIRECTV Now, the live streaming service it launched in November 2016. And AT&T officials have not been shy about saying they believe the future of television is streaming, not satellite.
Consequently, I don’t see AT&T ponying up billions of dollars to keep the Ticket if the agreement requires a renegotiation. The company would probably be happy to get out from under the expensive contract and move on with other ventures, such as yet another streaming service it plans to launch this fall.
Of course, the loss of the Sunday Ticket would undoubtedly lead to widespread subscriber defections after the 2019 NFL season. But AT&T seems resigned to that. They think the satellite unit is a lost cause. And so what’s the difference if subscribers leave in 2020? They’re going to leave at some point anyway. Or so AT&T’s executives appear to be thinking.
So, Freddie, enjoy the Sunday Ticket this season because it might be the last one on DIRECTV.
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— Phillip Swann