DirecTV CEO ‘very optimistic’ about renewing exclusive NFL Sunday Ticket deal
DirecTV Chief Executive Mike White told analysts Tuesday he’s “very optimistic” that the No. 1 U.S. satellite provider can renew its exclusive deal with the NFL to carry the Sunday NFL Ticket package of out-of-market games.
On the same third-quarter earnings call with analysts, White warned that the industry could not execute the kind of price increases it has pushed through in the last year and expect to maintain customer loyalty.
White, speaking to analysts during the company’s third-quarter earnings call, pointed out that the 2014 season would be the 20th anniversary of DirecTV’s relationship with the America’s premier sports league, and he doesn’t “want it to be our last.”
“I know that speculation can make for exciting headlines, but the reality is we are having good talks with the NFL and those talks are progressing. I continue to be optimistic we will get an exclusive deal done but deals like this increasingly in this world are complicated and not just about economics.
“They take some time to work through but we continue to be focused on growing the NFL Sunday ticket business beyond what it is today and as I said I’m very optimistic that we’ll continue that partnership.”
White said that third-quarter sales of the Sunday Ticket package were “a tad better” than DirecTV’s internal expectations.
In 2009, DirecTV extended its agreement with the NFL through the 2014 season in for a reported $4 billion, representing a 43% increase over the money it paid in the previous five-year pact.
There had been speculation that DirecTV might finally be priced out of its exclusive contract to carry the package, at a time when various cable operators are particularly anxious to offer the the games. NFL contests are the most lucrative live programming on American television.
Earlier on the call, White, commenting on the company’s ability to upgrade 3 million of its customers to its latest HD equipment, noted that the price increases that increased average revenue-per-subscriber in the third quarter could be difficult to maintain in the months and years ahead.
“…It’s also pretty clear when I kind of dig underneath the churn numbers that we are still seeing elevated issues from the price increases we took this year,” he said, “and I don’t think any of us in the industry can sleep well if we have to continue to take these kinds of price increases going forward in terms of its impact on customer loyalty across the industry.”
White said he wouldn’t be surprised to see more consolidation among pay-TV providers as a response to rising retransmission fees charged by programmers and sports leagues.
“Given the power that the media companies and sports have at this point … customers’ bills are growing at 4-5% a year, and I think that isn’t a sustainable thing for an environment where customers’ incomes aren’t growing anywhere close to that. So if there’s going to be consolidation, whether or cable or otherwise of the industry, over time I think that’s one of the ways the market would respond to rewrite the balance between distributors and producers of content.”
— David B. Wilkerson