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Business

Disney, Apple and Amazon continue to wait while the NFL considers deals on Sunday tickets




DK Metcalf, from the Seattle Seahawks, during a Meet & Greet with DIRECTV NFL SUNDAY TICKET subscribers 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 rights holder of the National Football League̵[ads1]7;s Sunday ticket sale package. They are just waiting to find out who wins.

The three companies submitted bids weeks ago, according to people familiar with the matter. The NFL continues to be in discussion with all three bidders when deciding which partner to choose, said the people, who asked not to be named because the negotiations are private.

The NFL wants every buyer to pay more than $ 2 billion for the rights and a stake in NFL Media, which is packed with the Sunday Ticket, said three of the people. The NFL’s mobile rights may also be part of the package, since the previous mobile agreement with Verizon has been terminated.

DirecTV paid $ 1.5 billion a year for the Sunday Ticket for the existing rights, which will end after the upcoming 2022-23 season. The NFL pushed for a 100% increase for its primary game packages last year, but there is little chance that the league will receive $ 3 billion for the Sunday Ticket, which has historically lost money to DirecTV, sources said.

Many observers, including some of the bidders themselves, have expressed surprise that an agreement has not been reached now. The delay has to do with the mix of assets and associated partnership talks that ended in the agreement talks, said two of the people. If the discussions were only about the Sunday Ticket, an agreement would probably have already been reached, said one of the people.

There is no urgency with an announcement, since DirecTV will already offer Sunday tickets for the upcoming season. Bidders would like to have an agreement made sooner rather than later because they will have enough time to notify 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 demanded that all owners of Sunday tickets also become DirecTV customers. This condition will no longer apply to this new agreement, and will open the package to many new subscribers who will no longer spend hundreds of dollars on the package because they did not want DirecTV.

DirecTV does not offer the current rights package, but is willing to enter into an agreement with the winning buyer, said two of the people. An agreement, if reached, can reduce the financial burden on the winning streaming platform.

DirecTV is interested in maintaining a relationship with bars and restaurants. Sunday Ticket is a pin in sports bars that uses the game package to bring in fans of non-local games, most of whom have no other way to see their favorite team. The Sunday Ticket is also popular with sports gamblers who want to watch several games at once.

DirecTV will also consider acting as a housing review. Under such an agreement, it can transfer all revenue for the Sunday Ticket to the rights owner, but still offer it to the customers. This will allow DirecTV to reduce churn while reducing switching costs for consumers. It will also stop any potential power delays or reliability issues that may come with broadcasting live football over broadband.

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

AT&T spun out DirecTV last year. It is now a privately owned independent company owned by AT&T and the private equity company TPG. When AT&T acquired DirecTV in 2015, Sunday Ticket rights were so important that the entire $ 49 billion deal was conditional on renewing a long-term contract with the NFL. However, fewer than 2 million subscribers typically sign up for the package each year, making the Sunday Ticket a loser for the satellite TV provider, which is no longer interested in bidding for the full rights, according to a person familiar with the matter. .

A spokesman for DirecTV declined to comment.

Various obstacles

While Amazon has already acquired exclusive rights to Thursday Night Football and Disney’s ESPN owns Monday Night Football, Apple will represent a new global partner for the NFL – with the world’s largest corporate balance sheet. It’s appealing to the NFL because it potentially brings a new bidder to the table for future contract talks.

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

Apple would like to own global rights for the Sunday Ticket, said two of the people. The NFL has not reached that stage in discussions with Apple where it has been decided whether they will give them to the company or sell them separately, said one of the people. DirecTV currently owns only US rights.

It is also unclear whether Apple or Amazon have an interest in buying a minority stake in NFL Media, which includes cable networks NFL Network and RedZone, and the digital website NFL.com. Both technology companies may have little interest in the older pay-TV business, which causes millions of subscribers to bleed every year. But if the league ties the Sunday Ticket to an NFL Media deal, both companies can stick around to get a deal done.

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

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

When the NFL signed contracts with CBS and Fox, the agreements included language that required the Sunday Ticket to have a premium price so as not to draw too many eyes away from the local market on Sunday afternoon games purchased by the broadcasting networks, three of the people said.

This means that any Sunday ticket holder will not be able to significantly reduce the price of the out-of-market package, which usually costs around $ 300 per year. It also prevents an existing streaming service, such as ESPN +, from only adding the Sunday Ticket at little or no extra cost to increase subscribers.

SE: Commissioner Roger Goodell defends the NFL’s handling of the Washington Commanders



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