NFL lockout could shackle DirecTV’s profits
Kai Ryssdal: NFL owners met in New Orleans today. Item number one — and probably the only item — on their agenda was the lockout that’s been going for more than a week now. Players and owners can’t agree on how to split the $9 billion the league brings in each year.
Some companies on the fringes of the lockout and on the fringes of that $9 billion are saying it will have a major impact on their revenue. DirecTV, for one, says it could lose up to three quarters of a billion dollars. Marketplace’s Jennifer Collins explains.
Jennifer Collins: Roughly two million football fans subscribe to DirecTV’s Sunday Ticket.
DirecTV commercial: Watch your favorite team no matter where you live.
The extra service runs around $300 a year. It offers special recaps, special channels and for the super fan:
Rodney Paul: You could go ahead and watch multiple games at once.
Rodney Paul is such a fan. He grew up in a Cowboys-lovin’ household in enemy territory near Philadelphia. Today he’s a sports economist at St. Bonaventure University.
Paul: Particularly sports fans go ahead and associate DirecTV with the NFL Sunday Ticket because you cannot get it any other way.
Paul says DirecTV worries about losing those loyal subscribers. Macquarie analyst Amy Yong says DirecTV is also locked into a contract with the NFL.
Amy Yong: Well regardless of whether or not there is a season, the company still has to make roughly $1 billion in payments.
The big broadcast networks, like Fox and CBS, also stand to lose hundreds of millions of dollars in revenue. The fate of the NFL season could be decided in court next month.
I’m Jennifer Collins for Marketplace.
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