Will DirectTV (NASDAQ:DTV) Partner with Apple (NASDAQ:AAPL) to keep their NFL Rights?
NEW YORK – In a report on AllThingsD, Google (NASDAQ:GOOG) could be in talks with the National Football League (NFL) over exclusive rights to broadcast the NFL Sunday Ticket Package. The package allows viewers to watch every NFL game and has been licensed to DirectTV (NASDAQ:DTV) since 1994; however, the current contract expires at the end of the current season.
Reports that Google is in talks with the NFL for the rebroadcast rights is a setback for DirectTV. In the last quarter satellite providers such as DirectTV and Dish Network (NASDAQ:DISH) lost a combined 162,000 subscribers as many younger viewers are moving away from pay-tv to streaming video. The NFL Sunday Ticket Package is a key part of DirectTV’s value proposition, and the loss of the license would be a significant setback for the company.
For Google, the acquisition of the NFL Sunday Ticket Package would be a substantial victory as it would allow the internet behemoth to pair the package with their recently released Chromecast online TV portal. Google could also make the package available via their Android operating system.
However, away from DirectTV is not without risks for the NFL as Google’s subscriber base is significantly smaller than DirectTV’s (20 million U.S. subscribers). Also, Nielsen (NYSE:NLSN) ratings do not take into account streaming video as such a switch to Google would result in a ratings drop for NFL broadcasts unless Nielsen adjusted their rating system. The declining ratings would affect advertising demand, local affiliates, and the large TV networks that have coughed up billions of dollars to secure exclusive rights.
Furthermore, any attempt by Google may bring a counteroffer from Apple (NASDAQ:AAPL) or a partnership between Apple and Direct TV as both firms would stand to win by teaming up – this is probably the most likely scenario and it would open up other opportunities to collaborate. Given that a Google only option would be a significant risk for the NFL, the talks might be more about pushing DirectTV towards entering into an agreement with an online service provider than seriously considering Google’s offer.
Shares of DirectTV we up almost 2 percent whiles in Apple were down 2 percent in trading on Tuesday.