Disney, Apple and Amazon Keep Waiting While NFL Considers Sunday Ticket Offers

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 Barreras | AP

Disney, Apple and Amazon have all made bids to become the new owners of the broadcast rights to the National Football League’s unsold Sunday Ticket package. They’re just waiting to find out who wins.

The three companies already made an offer weeks ago, according to acquaintances. The NFL remains in talks with all three bidders as it decides which partner to choose, the people said, who asked not to be named because the negotiations are private.

The NFL wants each buyer to pay more than $2 billion for the rights and a stake in NFL Media, which will be packaged with Sunday Ticket, three of the people said. The NFL’s mobile rights may also be part of the package, as the previous mobile agreement with Verizon has ended.

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

Many observers, including some of the bidders themselves, have expressed surprise at a deal that has not yet been finalized. The delay has to do with the mix of assets and the associated partnership talks that have been factored into the deal talks, two people said. If the discussion focused only on Sunday Ticket, an agreement would probably have already been reached, one of the people said.

There is no urgency for an announcement, as DirecTV will already be offering Sunday Ticket for the upcoming season. Bidders are eager to close a deal quickly, as they want enough time to warn consumers that the Sunday Ticket rights owner will change.

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

The role of DirecTV

DirecTV required that all Sunday Ticket package owners must also become DirecTV customers. That condition no longer applies to this new deal, opening up the package to many new subscribers who will no longer hesitate to spend hundreds of dollars on the package because they didn’t want DirecTV.

DirecTV is not bidding on the current rights package, but is willing to make a deal with the winning buyer, two of the people said. If an agreement is reached, it could reduce the financial burden on the winning streaming platform.

DirecTV is interested in nurturing a relationship with bars and restaurants. Sunday Ticket is a staple in sports bars that use the game pack to bring in fans of non-local games, most of whom have no other way of watching their favorite team. Sunday Ticket is also popular with sports gamblers who want to watch multiple games at once.

DirecTV would also consider acting as a residential pass-through. Under such an agreement, it would be able to transfer all Sunday Ticket revenue to the rights owner, but still offer it to customers. This would enable DirecTV to reduce customer churn while reducing switching costs for consumers. It would also avoid any streaming latency or reliability issues that may arise when broadcasting live football over broadband.

Still, it’s unclear whether the winning bidder would be interested in such a partnership. Building a commercial relationship can be attractive to Disney, Apple or Amazon, and the winner may want to be the direct point of contact for all Sunday Ticket subscribers.

AT&T launched DirecTV last year. It is now a privately held independent company co-owned by AT&T and private equity firm TPG. When AT&T acquired DirecTV in 2015, the Sunday Ticket rights were so important that the entire $49 billion deal was contingent on extending a long-term contract with the NFL. But less than 2 million subscribers sign up for the package each year, making 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 DirecTV spokesperson declined to comment.

Various obstacles

While Amazon has already acquired exclusive Thursday Night Football rights and Disney’s ESPN owns Monday Night Football, Apple is said to represent a new global partner for the NFL – with the world’s largest corporate balance sheet. That’s attractive to the NFL because it potentially brings a new bidder to the table for future deal discussions.

Apple has shown that it can broadcast live sports this year by streaming Major League Baseball games, although some fans, especially older ones, have complained about the exclusive streaming package. Apple also agreed to stream Major League Soccer games earlier this month in an announcement of a 10-year deal. Amazon will become the first exclusive streaming provider for NFL games when it starts offering Thursday Night Football this year.

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

It’s also unclear whether Apple or Amazon have any interest in buying a minority stake in NFL Media, which includes cable networks NFL Network and RedZone, and digital site NFL.com. Both tech companies may have little interest in the legacy pay TV, which bleeds millions of subscribers every year. But if the league links Sunday Ticket to an NFL Media transaction, both companies could tie the knot to close a deal.

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

A buyer will also have limited flexibility in pricing, according to acquaintances.

When the NFL signed contracts with CBS and Fox, the deals included language stipulating that Sunday Ticket must have a premium price so as not to draw too many eyeballs away from the local market for Sunday afternoon games bought by the broadcast networks, three of the people said.

That means any Sunday Ticket rights owner won’t be able to significantly lower the price of the out-of-market package, which typically costs about $300 a year. It also prevents an existing streaming service, such as ESPN+, from simply adding Sunday Ticket at little or no additional cost to boost subscribers.

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