AT&T Acquires DIRECTV, Changes the US Pay-TV Landscape
NFL Sunday Ticket
The DIRECTV (DTV) merger adds some rich sports content to AT&T’s (T) offerings. Highlighting this benefit, the company said, “As a result of this transaction, AT&T leads the industry in offering consumers premier content, particularly live sports programming, such as the exclusive rights to NFL SUNDAY TICKET, which gives customers every out-of-market NFL game, every Sunday afternoon, on any screen – TV, mobile devices or PCs.”
The NFL Sunday Ticket package gives you the opportunity to watch NFL regular-season games broadcast outside your local market. DIRECTV renewed its exclusive distribution contract for the NFL Sunday Ticket in 3Q14.
According to the company, this contract adds rights related to NFL Sunday Ticket.TV. NFL Sunday Ticket.TV is a broadband and mobile streaming service. This is particularly significant for AT&T considering Verizon’s (VZ) NFL mobile distribution rights.
According to ESPN.com sports business reporter Darren Rovell, DIRECTV has renewed its contract for an eight-year period. The company will have to pay ~$1.5 billion per year for exclusive rights to the NFL Sunday Ticket during this time.
DIRECTV’s sports networks
The DIRECTV deal brings two regional sports networks to AT&T:
- Root Sports Rocky Mountain
- Root Sports Pittsburgh
AT&T also got DIRECTV’s stake in Root Sports Northwest. And AT&T and DIRECTV now own the Root Sports Southwest as well. What’s more, AT&T got DIRECTV’s stakes in Game Show Network, MLB Network, NHL Network, and the Tennis Channel.
For diversified exposure to AT&T, you might consider investing in the iShares MSCI USA Minimum Volatility ETF (USMV) or the SPDR S&P 500 ETF Trust (SPY). USMV had ~1.6% exposure to the telecom company as of June 30, 2015. And AT&T made up ~1% of SPY’s holdings on the same date.
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