It seems it’s all downhill now for two significant deals that DirecTV has been negotiating. Chairman and CEO Mike White says he’s “highly confident” that DirecTV will seal the deal to maintain its exclusive rights to the highly-lucrative NFL Sunday Ticket package by the end of 2014. White also expects DirecTV to close the massive $48.5 billion proposed merger with AT&T within the first half of 2015, according to CNET.
White disclosed his confidence in the outstanding agreements today at the Goldman Sachs Communacopia 2014 conference in New York.
While the Sunday Ticket licensing deal was never expected to move beyond DirecTV’s grasp, the proposed acquisition of the satellite provider by AT&T is a much larger undertaking, which will potentially impact the entire communications and entertainment industry significantly.
A successful merger with AT&T would result in an advantageous repositioning of both companies through combining their complementary resources under one roof. DirecTV would gain access to AT&T’s Internet pipelines and its 10.4 million Internet subscribers, leaving the satellite provider better-equipped to take on competing cable and telco companies, as well as its nemesis and counterpart in the satellite realm, Dish Network.
For its part, AT&T hopes to be able to integrate DirecTV’s plethora of pay-TV resources into its own arsenal. The telco could bulk up its U-verse TV service with the satellite provider’s nationwide cache of subscribers, as well as expanding its reach, and increasing its own potency within the ongoing struggle between other colossal multi-system operators (MSOs), such as Comcast.
In fact, AT&T has argued in favor of the massive merger in part due to Comcast and Time Warner Cable’s all but finalized merger, which would combine the two largest cable and Internet providers in the country. AT&T has argued that, should the Comcast/TWC deal go through, a viable competitor of similar size would be necessary to keep the market competitive. Consumer advocates have differing opinions, but many see any large consolidation of such essential services as a threat to the general public.
AT&T also has the online video service its developing to consider. As of last April AT&T had infused $500 million into the project, which is essentially a joint venture with media holding company The Chernin Group, and a merger with DirecTV would likely assist in further strengthening that service’s eventual launch.
All of this will be moot for both parties if DirecTV fails to close its deal with the NFL. Not only is competitor Dish Network positioned to nab the deal instead of DirecTV were it to fall through, but AT&T itself has included an opt-out clause within the merger proposal should DirecTV fail to renew its NFL contract.
In essence, one failure for DirecTV turns into two failures. But if White’s recent confidence in the two deals is any indication, we can expect to see a combined DirecTV/AT&T monster by mid-2015, at the latest.
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