DirecTV reached an agreement with the National Football League to continue airing games every Sunday for a reported price of $1.5bn per year for eight years, costing the network $12bn.
“NFL Sunday Ticket has always been the centerpiece of DirecTV’s sports leadership and we’re pleased to continue our relationship with the NFL and be a part of the league’s future growth and success,” Mike White, CEO, DirecTV, said in the companys statement.
The official representatives of both DirecTV and NFL did not respond to requests to make any comment on the terms of the agreement. As reported by the Wall Street Journal, a spokesman of DirecTV shared that the new contract includes a 6% increase on a yearly basis, which is situated “on the low end of our guidance”.
The current contract, which lasted for four years and expires at the end of this year, cost the company an estimated $4bn. The new deal is providing DirecTV with exclusive rights to air the Sunday Ticket of NFL on mobile devices and through broadband Internet service. Moreover, DirecTV keeps its right to broadcast the Red Zone Channel of NFL and the DirecTV fantasy Zone channel.
The agreement between DirecTV and NFL eliminates a potential hurdle to the $48.5-billion acquisition of the satellite TV provider, proposed by AT&T Inc.
The Sunday Ticket is a significant source of revenue for the network, with about 10% of the companys 20 million customers purchase the $40/month pack,
DirecTV was 0.08% up to close at $86.59 per share yesterday, marking a one-year change of +44.80%. The company is valued at $43.49 billion. According to CNN Money, the 17 analysts offering 12-month price forecasts for DirecTV have a median target of $95.00, with a high estimate of $97.00 and a low estimate of $75.00. The median estimate represents a +9.71% increase from the last price of $86.59.
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