DK Metcalf, of 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 Barreres | AP
Disney, Apple and Amazon have submitted bids to become the new owner of the Sunday Football package’s off-market rights to the National Football League. 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 argue with the three bidders as it decides which partner to choose, people said, who asked not to be named because the negotiations are private.
The NFL wants any buyer to pay more than $ 2 billion in fees and a stake in NFL Media, which is packaged with Sunday Ticket, three of the people said. NFL mobile rights could also be part of the package, as its previous mobile deal with Verizon has ended.
DirecTV paid $ 1.5 billion annually for Sunday Ticket for existing rights, which end after the upcoming 2022-23 season. The NFL pushed for a 100% increase for its major game packages last year, but there is little chance the league will get $ 3 billion for Sunday Ticket, which has historically lost money to DirecTV, according to sources.
Many observers, including some of the bidders themselves, have expressed surprise that no agreement has now been reached. The delay has to do with the combination of assets and associated partnership talks that are involved in the deal talks, two of the people said. If the discussions focused only on Sunday Ticket, an agreement would probably have already been reached, said one of the people.
There is no urgency in an announcement, as DirecTV will already be offering the Sunday ticket for next season. Bidders would like to reach an agreement sooner rather than later because they want enough time to warn 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 the Sunday Ticket package also become DirecTV customers. This condition will no longer apply to this new deal, opening the package to many new subscribers who will no longer be reluctant to spend hundreds of dollars on the package because they did not want DirecTV.
DirecTV is not bidding for the current rights package, but is willing to close a deal with the winning buyer, two of the people said. If an agreement is reached, it could reduce the financial burden of the winning streaming platform.
DirecTV is interested in maintaining a relationship with bars and restaurants. Sunday Ticket is a staple in sports bars that use the game package to attract non-local gaming fans, most of whom have no other way to see their favorite team. Sunday Ticket is also popular among sports players who want to watch several games at once.
DirecTV would also consider acting as a residential broadcast. Under this agreement, you could transfer all proceeds by Sunday Ticket to the rights owner, but still offer them to customers. This would allow DirecTV to mitigate abandonment while reducing switching costs for consumers. It would also avoid any possible transmission latency or reliability issues that may occur with live broadband football streaming.
However, it is unclear whether the winning bidder would be interested in this partnership. Building a business relationship can be appealing to Disney, Apple or Amazon, and the winner can be direct contact for all Sunday Ticket subscribers.
AT&T created DirecTV last year. It is now an independent private equity firm co-owned by AT&T and private equity firm TPG. When AT&T acquired DirecTV in 2015, Sunday Ticket rights were so important that the entire $ 49 billion deal was conditional on the renewal of a long-term contract with the NFL. But fewer than 2 million subscribers typically subscribe to the package each year, making Sunday Ticket a loser of money for the satellite TV provider, which is no longer interested in bidding for all rights, according to one person. knowledgeable of the matter.
A DirecTV spokesman declined to comment.
Various obstacles
While Amazon has already acquired the exclusive rights to Thursday Night Football and Disney’s ESPN owns Monday Night Football, Apple would represent a new global partner for the NFL, with the world’s largest corporate balance sheet. This is appealing to the NFL because it potentially brings a new bidder to the table for future deal talks.
Apple has demonstrated its ability to broadcast live sports this year by streaming Major League Baseball matches, though some fans, especially the older ones, have complained about the exclusive playback package. Apple also agreed to stream Major League Soccer matches in a 10-year deal announcement earlier this month. Amazon will be the first exclusive streaming provider for NFL games when it begins offering Thursday Night Football this year.
Apple would like to have global Sunday Ticket rights, two of the people said. The NFL has not reached the stage of its talks with Apple where it is decided whether to give them to the company or sell them separately, one of the people said. Currently DirecTV only has 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 site NFL.com. The two tech companies may have little interest in the legacy pay-TV business, which is bleeding millions of subscribers every year. But if the league links Sunday Ticket to an NFL media transaction, both companies could bite the bullet to get a deal.
It is also possible that the league will eventually decide to sell the stake to NFL Media separately, one of the people said.
A buyer will also have limited pricing flexibility, according to people familiar with the subject.
When the NFL signed contracts with CBS and Fox, the offers included a language that forces Sunday Ticket to have a higher price so as not to take your eyes too far from the local market. The Sunday afternoon matches acquired by the broadcast networks, said three of the people.
This means that any owner of Sunday Ticket rights will not be able to significantly reduce the price of the package off the market, which typically costs about $ 300 a year. It also prevents an existing real-time playback service, such as ESPN +, from simply being added to Sunday Ticket at little or no additional cost to increase subscribers.
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