AT&T And DirecTV Merger Could Hinge On The NFL

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NFL Sunday Ticket
AT&T's proposed acquisition of DirecTV may hinge on NFL Sunday Ticket.

It’s fourth and goal for AT&T’s proposed $48.5 billion purchase of DirecTV -- and, for once, the football metaphor is apt.

The just-announced megadeal includes a clause in the fine print of a form filed with the Securities and Exchange Commission that could kill it completely: If DirecTV can’t renew its exclusive agreement with the National Football League, which expires at the end of the upcoming football season, AT&T is free to walk away from the deal.

AT&T and DirecTV merger Fine print of the proposed deal between AT&T and DirecTV revealed that the deal could hinge on the NFL.

 

The product in question is NFL’s “Sunday Ticket,” which allows users to watch out-of-market NFL games. Given the immense popularity of the NFL, the exclusivity of Sunday Ticket has made it one of DirecTV’s most attractive features. About 2 million DirecTV customers paid for Sunday Ticket last year, which costs $49.99 a month or $59.99 to stream on mobile devices.
 
On a conference call with Wall Street investors Monday morning, DirecTV CEO Mike White said he is having “active discussions” with NFL commissioner Roger Goodell and is “highly confident that we’ll get our deal done.”
 
According to Bloomberg, the NFL was close to extending the current $1 billion-per-year deal with DirecTV, but knowing that a $48.5 billion payday is on the line might prompt the league to ask for more. Google is reportedly an interested buyer, and something like the NFL could give YouTube the bump needed to seriously challenge traditional TV.   
 
AT&T could still follow through with the purchase even if DirecTV is outbid for NFL Sunday Ticket, but it’s clear that Sunday Ticket is a major reason for the purchase. AT&T touted Sunday Ticket when it announced the purchase.
 
“If anything, this [deal] unlocks further opportunities for the NFL and [DirecTV],” White said. He added that negotiations had been “very positive and constructive.” 

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