Sunday’s Super Bowl was the last game of the 2010 season. It might also be the last NFL game for a long, long time. As the players and owners whine about how to divvy up the annual $9 billion in revenues, many see the fans as the big loser.
But from a business stand-point, the biggest loser may be DirecTV. The NFL’s new deal with DirecTV to be the exclusive provider of out-of-market games, is set to begin in 2011.
Under the contract, DirecTV will pay the league $1 billion annually, even in event of a lockout. (On the other hand, the $3 billion paid annually by CBS, NBC, FOX and ESPN must be paid back by the NFL.)
The feeling is that DirecTV, as a subscription-based service, will not lose a considerable amount of subscribers just because the NFL goes into a work-stoppage, and that they will continue to maintain all or most of the customers that switched to DirecTV just for the NFL package.
While fans may be worried about the effects of a potential NFL lockout, investors do not appear worried about the effects on DirecTV’s business. DirecTV’s stock price is up nearly 40% since they announced their new deal with the NFL nearly one year ago.
Still, in the event of a lockout, it is hard to imagine DirecTV continuing to show the same level of growth. It is estimated that 10.6 per cent of DirecTV subscribers also purchase the “Sunday Ticket” package of NFL games.
DirecTV’s exclusive rights to broadcast out-of-market NFL games has been seen as huge get for the satellite provider. But if there are no games in 2011, that deal will not look so good after all.
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