DirecTV Sunday Ticket

There aren’t a ton of top-tier sports rights available next year, so the discussion about the NFL potentially exercising a contract option to end its Sunday Ticket deal with DirecTV after the 2019 season has received a lot of attention thanks to the scarcity of premium rights on the market and thanks to tech firms’ particular interest in this package. The league hasn’t yet decided to exercise that option (they struck a deal with DirecTV parent AT&T to move their deadline for opting out back to this coming spring instead of this past fall), but if they do go that way, there are expected to be a ton of deep-pocketed suitors. And that makes it interesting that Sports Business Journal’s John Ourand, who’s known for being plugged in to various rights negotiations, is quite confident Sunday Ticket isn’t going anywhere. From Ourand’s 2019 media predictions column, published Monday:

“NFL Sunday Ticket” will remain exclusive to DirecTV.

The NFL has the option to open its DirecTV “Sunday Ticket” deal early in 2019. While the league may do so and test the market’s appetite for the out-of-market package, it ultimately will go back to DirecTV, which holds the rights through 2022. There appears to be little appetite inside league offices to move away from a partner that it has had since 1994.

What’s particularly notable about that prediction is Ourand’s description of the “little appetite” inside the NFL offices for a change. And that makes some sense; the current Sunday Ticket setup is pricey for fans (and if fans just want the alternative NFL RedZone package rather than Sunday Ticket’s offerings of full games plus its own RedZone, they can buy the alternative RedZone much more cheaply elsewhere), but it’s still quite popular, and it has a loyal following. Moving that to a tech company comes with some challenges, as it’s unclear if as many people would pay as much for the full Sunday Ticket package there, especially considering other cheaper streaming options like NFL RedZone access.

And that’s to say nothing of the technical challenges of putting a high-demand package only on streaming instead of through a cable or satellite provider. DAZN’s attempt to do that with Sunday Ticket in Canada took a ton of criticism, and they eventually struck deals to sublicense Sunday Ticket to conventional providers. Older distribution models still carry increased ease of access for many (especially older customers, who seem more likely to be willing to spend on this in the first place), and the NFL’s always interested in maximizing how many people it can get games to. That’s a factor that may limit tech companies’ bids for exclusive deals, with NFL chief business and media officer Brian Rolapp saying earlier this year “Our entire model is about reach.”

(Of course, DirecTV wants to shift its full-package service from satellite infrastructure to streaming infrastructure, and that could mean some of these same concerns apply to them eventually. But they’re also hopefully making that switch doing so at a scale that can handle massive traffic, and with some of the lessons they’ve learned from outages that have popped up on their current streaming product. They also do currently offer a streaming version of Sunday Ticket for those who can’t get DirecTV, so they have some experience in this area that other tech firms don’t.)

It’s also notable that Sunday Ticket carries a lot of value for DirecTV, and thus for AT&T. The package’s exclusive availability on DirecTV has been a key part of driving people to switch to that service or keep that service, and that kind of subscriber attraction/retention is crucial for them. And this matters perhaps even more since AT&T’s acquisition of DirecTV in 2015; AT&T has been focusing on emphasizing its DirecTV satellite package rather than its U-verse cable offering, so keeping DirecTV healthy is important to them. Having the backing of AT&T also provides extra resources to DirecTV, so even if the NFL does opt out and open up the bidding again, there’s a good chance that DirecTV will have both the finances and the willingness to win that bid.

Of course, this is all hypothetical at this point, as we don’t even know that the NFL is opting out yet. Maybe they won’t opt out at all, and will stick with DirecTV at least through the contract’s end in 2022. (And that could be very interesting from a bidding perspective, as that’s then coming up amidst a bunch of other top-tier sports rights.) But if they do opt out, it’s interesting to hear Ourand relay that the NFL office doesn’t seem eager to make a change. They could still make one, of course; maybe a tech firm like Amazon or Facebook makes an offer that’s just too incredible to turn down, and DirecTV doesn’t match it or come close to it. But DirecTV retaining Sunday Ticket appears to be the betting favorite at this point.

[Sports Business Journal; photo from DirecTV.com]

About Andrew Bucholtz

Andrew Bucholtz is a staff writer for Awful Announcing.