AT&T's (NYSE: T) management thinks it might be able to offer DirecTV's (NASDAQ: DTV) National Football League Sunday Ticket service to its wireless customers, according to analysts who attended a meeting with the company. The possibility is being floated as AT&T prepares to try to get the company's proposed $49 billion deal for DirecTV approved by regulators.
AT&T held a meeting with financial analysts last Wednesday, and the Sunday Ticket programming was one of many topics that were covered. According to the Wall Street Journal, AT&T's management highlighted Sunday Ticket as "a cornerstone" of future programming and bundling offers. AT&T executives even said it might exempt the streaming of NFL games from counting toward subscribers' wireless data limits, similar to what the carrier is planning for its "Sponsored Data" plans for third-party companies. Under AT&T's Sponsored Data plans, content providers will be able to pay for the cost for AT&T customers to access their services.
AT&T "is looking to use the Sunday Ticket content over mobile devices and expects that it can be a differentiator over the long run to gain incremental market share in both mobile and broadband," Barclays analysts wrote in a research note, according to the Journal.
Sunday Ticket lets NFL fans watch out-of-market games.
"AT&T believes that it can drive further broadband and mobile market share gains by offering an OTT version of the NFL Sunday Ticket," Jefferies analysts Mike McCormack, Scott Goldman and Tudor Mustata wrote in a research note last week. "Management is confident in DTV's ability to negotiate and reach a new deal with the NFL. The deal and other content deals are expected to have redundant distribution (TV and Mobile), and integration plans include some rationalization of distribution agreements. It is likely that AT&T will be able to negotiate for further rights upon closing of T-DTV."
Sunday Ticket is a premium DirecTV service that lets customers watch out-of-market NFL games on Sunday afternoons on TVs, and customers can pay extra to have the games streamed to their mobile devices. DirecTV's mobile streaming rights only cover people who pay for its satellite TV service, something that could potentially be expanded if the AT&T deal goes through.
As the Journal notes, DirecTV and the NFL are currently trying to figure out a new contract for the programming since the existing one is set to expire at the end of the 2014 football season. AT&T can abandon the DirecTV deal if the Sunday Ticket offering isn't renewed, indicating its importance.
However, it's not clear if AT&T wants to offer Sunday Ticket as a stand-alone video offering to AT&T wireless customers. The analysts described AT&T executives' comments as being vague and largely hypothetical at this point.
If AT&T were to make a deal for DirecTV that included an expansion of the Sunday Ticket offering, it would set up a showdown with rival Verizon Wireless (NYSE: VZ), which already has exclusive smartphone streaming rights to football games for Sunday, Monday and Thursday nights. Further, Verizon can show Sunday afternoon games in customers' home markets on customers' mobile devices.
- see this WSJ article (sub. req.)
- see this NBC Sports article
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