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DISH Network May Bid for NFL Sunday Ticket Rights

Zacks Equity Research

DISH Network Corp. (DISH), the second largest satellite TV operator in the U.S., has decided to bid for the broadcasting rights of the National Football League’s (:NFL) Sunday matches if the company’s closest rival DIRECTV (DTV) fails to renew its existing rights. DIRECTV, the largest satellite TV operator in the U.S., holds the exclusive right to telecast “NFL Sunday Ticket” since 1994.

Notably, DIRECTV’s $4 billion NFL Sunday Ticket rights will expire at the end of 2014. Both DIRECTV and National Football League are negotiating over the renewal of the deal.

Meanwhile, in May 2014, DIRECTV reached a definitive agreement with AT&T Inc. (T) to sell its business to the latter for $48.5 billion. The deal is expected to close within the next twelve months now awaits the approvals of regulators. Notably, AT&T retains the right to call off the deal if DIRECTV fails to renew its contract with NFL.

DISH speculates that if DIRECTV fails to renew the contract then NFL may offer Internet rights for the “Sunday Ticket” instead of the traditional television rights. DISH is on the verge of starting an online video subscription service and may also opt for the web-based NFL Sunday Ticket rights. DISH Network currently carries a Zacks Rank #3 (Hold).

In Apr 2014, DISH achieved a significant milestone by signing an online pay-TV deal with leading media mogul, The Walt Disney Co. (DIS). The agreement enables DISH subscribers to watch live shows on devices like PCs, smartphones and tablets, thereby bypassing the need for a set-top box. 

Moreover, Walt Disney also dropped its earlier objection against DISH’s ad skipping Auto Hop device. Hence, the new deal with Walt Disney not only drops the technical objections against the satellite TV operator but also sets the platform for future online TV agreements with other broadcast companies.

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