Sep 27, 2019

AT&T considers dropping DirecTV's NFL Sunday Ticket deal

Photo: Rich Graessle/Icon Sportswire via Getty Images

AT&T COO John Stankey said that the telecom giant would consider dropping its exclusive rights to the NFL's Sunday Ticket package from its DirecTV satellite service in a Wall Street Journal interview.

Why it matters: The package features most Sunday NFL games — some of the most popular programming on television — and the deal has long been a cornerstone for DirecTV.

  • "There’s less profitability to support the decision" to offer Sunday Ticket, Stankey said in the interview. "It becomes less critical to the business over time."
  • According to the Journal, AT&T is paying $1.5 billion annually for the Sunday Ticket rights. Its exclusive package expires in 2022.
  • Stankey's statement doesn't come as a total surprise. In an interview with Recode in February, AT&T CEO Randall Stephenson alluded to the fact that the NFL was less invested in the fan experience than other sports.

The state of play: AT&T is under pressure from investors to divest DirecTV, which it acquired for $65 billion in 2015, because the business is struggling as more people ditch traditional television packages for digital alternatives.

  • Rumors have circulated over the past two weeks that AT&T is considering dropping the service, which the telecom giant has denied.

The big picture: Sports rights are coveted entities in the the television business, as they make up one of the only types of content that viewers still consume live. Leagues have developed a great deal of leverage over TV networks to charge for the rights to distribute their live content.

Our thought bubble: If AT&T is considering dropping its live TV business, then it makes sense that they wouldn't want to pay big bucks to renew the NFL contract.

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