The National Football League’s Sunday Ticket package has long been considered a profitable asset for AT&T’s DirecTV, but the growing number of cord cutters might change that notion.
The current agreement between DirecTV and the NFL is set to expire following the 2021-22 season and if met with an increased price tag, AT&T may not be interested in a deal renewal. Earlier this year, the NFL had the option of exercising a one-way opt-out clause, but chose not to use it, instead continuing their current deal with DirecTV. In 2014, AT&T’s DirecTV agreed to an eight-year contract extension that pays the NFL $1.5 billion annually for the rights to give their subscribers the option of watching almost any game.
In 2018, DirecTV lost nearly 1 million subscribers, largely due to cord cutting, a continuing trend that could make it difficult for the satellite pay-TV service to continue its partnership with the NFL.
“I don’t think we look at that and say it’s a growth product,” AT&T COO John Stankey told the Wall Street Journal regarding the Sunday Ticket. “I don’t think we’re going to wake up a year from now and suddenly there’s going to be more people in the United States that want to watch an out-of-market team.”
According to the Wall Street Journal, DirecTV loses more than $500 million annually on their NFL Sunday Ticket package. The current $1.5 billion per year deal was approximately 50% more than their previous agreement that expired in 2014. Based on Stankey’s recent comments, if the NFL is in search of a similar increase in 2022, they’ll need to get it from a new broadcast partner.
Brandon Contes is a freelance writer for BSM. He can be found on Twitter @BrandonContes. To reach him by email click here.