With three years left on its national TV pact, the National Football League
is opting to stick with DirecTV Inc. as the exclusive carrier for its out-of-market
games -- at least until 2005.
The NFL and DirecTV said Wednesday that they have extended their "NFL Sunday
Ticket" partnership exclusively for three more years, and DirecTV will remain
the exclusive direct-broadcast satellite carrier through 2007.
The new deal is a blow to cable operators, as they had hopes that the out-of-market football package could help to accelerate digital penetration and reduce
churn.
Explaining the league's decision to stick with DirecTV, NFL commissioner Paul
Tagliabue said, "After many, many comprehensive discussions, in the current
environment, some [cable operators'] priorities were consolidation and rollout, and not as focused as DirecTV on sports programming."
That said, Tagliabue added, after 2005, "We'll be able to look at all of the
alternatives again, including the state of the digital rollout again."
The NFL's current TV deal with Fox, CBS, ABC and ESPN expires in 2005.
Broadcasters have had concerns that a cable version of Sunday Ticket
would undermine their ratings and ad revenue.
DirecTV sweetened its deal by enhancing its Sunday Ticket games with
advanced technologies like high-definition broadcasts and interactivity
beginning next season. That likely means increasing Sunday Ticket prices, particularly for an HD package.
"With the multichannel landscape becoming more competitive, it's crucial for
us to have programming that sets us apart," DirecTV chairman and CEO Eddy
Hartenstein said. "There's no better example than the NFL Sunday Ticket."
Its estimated that about 1 million of DirecTV's 11 million subscribers buy
the football package.
The NFL also plans to launch a new football channel, aptly dubbed the NFL
Channel, around the start of the 2003 season. DirecTV will carry the channel as
part of its widely distributed "Total Choice" tier. The NFL Channel will make use
of the NFL Films library and create football-related programming. Any live game
coverage, Tagliabue said, is unlikely under the current TV deal.
