By Phillip Swann
The TV Answer Man –@tvanswerman
TV Answer Man, why did DIRECTV want the bar and restaurant business for the Sunday Ticket when they are going out of business at some point. How can the Ticket make any money for them?! They didn’t even want the home business for the Ticket! That’s why Google got it. Can you shed some philosophy on this? — Ernie, Phoenix.
Ernie, there are a lot of assumptions in that question, but let’s try to shed some light, if not philosophy, on the main inquiry here. DIRECTV did let the NFL Sunday Ticket go to Google starting with this season. The satcaster had the package of out-of-market NFL Sunday afternoon games as an exclusive for 28 seasons. But it concluded it was not sufficiently profitable– if it was profitable at all — to keep the contract. This doesn’t mean that DIRECTV thinks it’s about to go out of business, although it has lost 13 million subscribers over the last eight years. But it does mean the company is trying to be wiser about what products and services it invests in. So, why did DIRECTV pursue and win the commercial business for the Sunday Ticket in a licensing deal with EverPass Media, which had previously acquired the rights from the NFL? Why is the bar and restaurant business any more profitable than the residential side?
When you look at what DIRECTV is charging bars and restaurants to carry the Sunday Ticket in their establishments, you might understand. According to DIRECTV’s web site, a bar/restaurant with a capacity of 50 must pay $2,800 for the Ticket for the season; a place with a capacity of 100 must pay $4,900; one with a capacity of 200 has to pay $9,500; if you can get 500 patrons in your place, you pay $18,200 and $29,200 if you can fit 1,000. And if you have a huge place that can fit 2,000? $58,900! (The seating capacity is based on the Fire Code Occupancy rules.) We don’t know what DIRECTV had to pay EverPass for the commercial licensing rights — or the overhead costs for DIRECTV to provide programming to commercial venues — but those are pretty sizable subscription fees. (And they get even higher if you have an ever bigger place.) You can see how DIRECTV can certainly make a tidy profit from the Ticket’s bar business.
Ernie, hope that helps. Happy viewing and stay safe!
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— Phillip Swann