For almost two decades, DirecTV's Sunday Ticket package of National Football League games has been a superstar performer for the satellite broadcaster.
But like any team with an aging and expensive player, DirecTV now has to decide whether to keep Sunday Ticket on its roster.
DirecTV pays $1 billion a season for the rights to all Sunday afternoon games under an exclusive deal that runs through next season. The satellite broadcaster and the NFL are in talks on a new contract, with cost and length being two sticking points.
FOR THE RECORD:
DirecTV NFL package: In the Jan. 1 Business section, an article about DirecTV's NFL Sunday Ticket package said that subscribers pay as much as $250 a month for extra football programming. They pay $250 per season.
Sunday Ticket, created in 1994, is a football fan's dream that provides a live feed to every afternoon game around the country.
The package liberated fans from watching only the games being shown on local channels in their market. It also fueled growth for DirecTV. Two million of the broadcaster's 20 million subscribers pay as much as $250 per-season to receive the extra football programming.
"The Sunday Ticket package was a brilliant play for DirecTV, as it gave the displaced NFL fan an option to watch their team in the comfort of their own home and not be forced to go to the local sports bar," said Marc Bluestein, president of consulting firm Aquarius Sports & Entertainment. The "association with NFL definitely delivered large brand awareness for DirecTV, especially in its early years."
That has come at a cost. DirecTV's Sunday Ticket bill has more than doubled in the last 10 years and will probably continue rising.
One network sports executive predicts that DirecTV will be looking at a 40% increase to $1.4 billion for the 2015 season and 4% annual increases after that.
Neither the NFL nor DirecTV would comment on their talks.
At a DirecTV investor conference in early December, Chief Executive Mike White said the company has had "very constructive conversations with the NFL" and remains optimistic that a new accord will be reached.
That sounded more positive than what White told analysts in May, when he suggested Sunday Ticket has peaked in value. "It is a pretty mature product," he said then.
The NFL has been very successful at getting more money from its TV partners. Its new contracts with Fox, CBS and NBC — which kick in next season — average a combined $3.1 billion annually in rights fees, a 63% increase from their previous pacts. ESPN's new deal with the NFL averages $1.9 billion a season, a 72% jump. At the same time, the NFL has made moves over the last several years that may have diminished the value of Sunday Ticket — and may make DirecTV reluctant to accept a hefty increase.
For starters, the NFL Network, the league's own channel, now carries 13 Thursday night games, which reduces the number of Sunday games for Sunday Ticket. The NFL has also slightly bumped up the number of nationally televised Sunday games that Fox and CBS carry.
Then there is RedZone, the channel the NFL launched five years ago that shows live action, including every touchdown, from all Sunday games. Although RedZone doesn't offer complete games, it shows plenty of live action and has taken away some of Sunday Ticket's cachet.