Disney, Apple and Amazon continue to wait while the NFL considers Sunday ticket offers

D.C. Metcalfe of the Seattle Seahawks during a DIRECTV NFL SUNDAY TICKET signup at the DIRECTV NFL SUNDAY TICKET Lounge on Saturday, February. January 1, 2020 in Miami, Florida.

Peter Barreras | AP

disney, Apple as well as Amazon all applied to become the new broadcast rights holder of the National Football League’s Sunday ticket. They are just waiting to see who wins.

The three companies submitted bids a few weeks ago, according to people familiar with the matter. The NFL continues to negotiate with all three bidders as it decides which partner to choose, said the people, who asked not 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 sold with the Sunday Ticket, according to three people. NFL mobile rights may also be part of the package as its previous mobile agreement with Verizon ended.

DirectTV paid $1.5 billion a year for a Sunday ticket for existing rights ending after the upcoming 2022-23 season. NFL pushed to 100% increase for its core game packages last year, but it’s unlikely the league will make $3 billion for the Sunday Ticket, which has historically been a loss for DirecTV, the sources say.

Many observers, including some of the bidders, expressed surprise that a deal has not yet been struck. The delay is due to a combination of assets and related partnership talks that culminated in deal talks, two sources said. If the discussion had focused only on the Sunday Ticket, an agreement would probably have been reached by now, one of the people said.

There is no urgency in the announcement as DirecTV is already offering a Sunday ticket for the upcoming season. Bidders would like to close the deal as soon as possible because they need enough time to warn consumers about the change in ownership of Sunday tickets.

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

Role of DirecTV

DirecTV required all Sunday Ticket owners to also become DirecTV customers. This condition will no longer apply to this new deal, opening up the package to many new subscribers who will no longer be reluctant to spend hundreds of dollars on a package because they don’t need DirecTV.

DirecTV is not bidding on the current rights package but is open to a deal with the winning bidder, two sources said. An agreement, if reached, could lessen the financial burden of the winning streaming platform.

DirecTV is interested in maintaining relationships with bars and restaurants. The Sunday ticket is a staple in sports bars that use the game pack 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 operating as a residential end-to-end channel. Under such an agreement, he could transfer all the income from the Sunday Ticket to the right holder, but still offer it to buyers. This would allow DirecTV to reduce customer churn and lower switching costs for consumers. It will also prevent any potential streaming latency or reliability issues that you might encounter when broadcasting live football over broadband.

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

AT&T untwisted DirectTV last year. It is now a privately held, independent company jointly owned by AT&T and private equity firm TPG. When AT&T acquired DirecTV in 2015, the rights to the Sunday Ticket 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 subscribers typically sign up for the package each year, making the Sunday Ticket unprofitable 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

Bye Amazon has already acquired exclusive rights to football on Thursday night and Disney’s ESPN owns Monday Night Football, Apple will become the NFL’s new global partner with the world’s largest corporate balance sheet. This is attractive to the NFL because it could potentially bring in a new bidder for future deal negotiations.

This year, Apple has demonstrated its ability to broadcast live sports by broadcasting Major League Baseball games, although some fans, especially older ones, complained about the exclusive streaming package. Apple has also agreed to stream Major League Soccer games as part of a 10-year deal announced earlier this month. Amazon will become the first exclusive streaming provider for NFL games. when it starts broadcasting football on Thursdays this year.

Apple would like to get the global rights to the Sunday Ticket, two sources said. The NFL has not yet reached the stage of negotiations with Apple where it has decided whether it will give them to the company or sell them separately, one source said. DirecTV currently only owns the US rights.

It’s also unclear whether Apple or Amazon are interested in buying a minority stake in NFL Media, which includes cable networks NFL Network and RedZone, as well as digital site NFL.com. Both tech companies may have little interest in the legacy pay-TV business that losing millions of subscribers every year. But if the league ties the Sunday Ticket to an NFL Media deal, both companies could bite the bullet to make a deal.

It’s also possible that the league will eventually decide to sell its stake in NFL Media separately, one of the sources 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, three people said they included language that required the Sunday Ticket to have a premium price so as not to detract too much attention from the local market for Sunday afternoon games purchased by broadcast networks.

This means that any Sunday ticket holder will not be able to significantly reduce the price of an off-market package that typically costs around $300 per year. It also prevents an existing streaming service like ESPN+ from simply adding a Sunday ticket for little or no additional fee to increase subscribers.

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