Talks Heating Up Over NFL Sunday Ticket Pack

Cable World, Sept 16, 2002

Byline: STACI D. KRAMER

While DirecTV taunts cable with its exclusive "NFL Sunday Ticket" package - "you can't get it on cable," blares the latest barrage of ads - talks about the package's future are intensifying.

"There's no question that NFL Sunday Ticket is the crown jewel," said NFL spokesman Brian McCarthy. "It has been very valuable to DirecTV, and likewise the cable companies and In Demand have expressed deep interest in pursuing it. We're evaluating all options."

Cable-owned In Demand is making a big push for the package of up to 14 out-of-market games every Sunday. And it will take big bucks - more than the reported $150 million a year now being paid by DirecTV - and a fair amount of ingenuity. DirecTV does not want to lose the package when its contract expires at the regular season's end.

Technically, DirecTV's contract with the NFL is exclusive only to satellite. But NFL broadcasters Fox and CBS have "DirecTV-only" clauses in their contracts, which run through 2005. The networks receive a fee based on subscribers from the NFL, estimated to range between $6 million and $15 million each annually. The league would have to get their permission to make a deal with other distributors. In addition to financial compensation, the networks want to make sure their local advertising advantage remains intact. Digital local ad insertion makes that concern less of a factor now.

The proposed merger between DirecTV and EchoStar further complicates matters. EchoStar chairman Charlie Ergen was not interested in spending major money on the NFL before. Still, a source familiar with the situation told Cable World it would be a mistake to assume he doesn't see the value of the package.

At stake is the biggest plum in the subscription-TV basket: the only way fans can watch out-of-market games on Sunday afternoons. Most of the subscribers, roughly 1.3 million for the 2001 season, are thought to have deserted cable for DirecTV. Cable operators not only want them back, they see the NFL as a way to gain new customers and push current subscribers up to digital and beyond.

"We're in the process of discussing renewal of the contract," a DirecTV spokesman said. In Demand's spokesman wouldn't expand on the league's comment.

The NFL also has had preliminary conversations with Cablevision and Comcast, which has a stake in In Demand.

THE NEXT QUESTION:

*Would the NFL ever consider a cable-only package for the Sunday Ticket package?

*DirecTV reportedly pays over $150 million a year for its deal. How much more is the pack worth?