Google Bidding for Sunday Ticket??

[PBRme]

http://www.cnbc.com/id/100977900

Very interesting

[ChicosBailBonds]

They aren't bidding for Sunday Ticket...at least not yet.  We are in an exclusive negotiating window right now.  It is interesting to the public because it is coming out now, but something we've known about for over a year...old news, surprised it has taken this long to get out.  Apple in on it as well and has been for a long time. The NFL isn't stupid, this only helps their negotiating leverage during the window.  At the end of the day, the NFL has to decide what they want to do, what risk they want to put to their other deals and DIRECTV has to decide if it is worth.  With only 15% of customers on NFL, many fun decisions to be made by both sides. 

[Benny B]

With MLB, NBA, NHL all being in control of their own out-of-market packages... how long before the NFL realizes that they can build their own OOM platform?

Unless DTV is overpaying for the Sunday Ticket rights (and thus the NFL will re-up with them), the underlying message in the article is to short DTV.

[GGGG]

With MLB, NBA, NHL all being in control of their own out-of-market packages... how long before the NFL realizes that they can build their own OOM platform?

Unless DTV is overpaying for the Sunday Ticket rights (and thus the NFL will re-up with them), the underlying message in the article is to short DTV.

Couple of things...

My guess is that DTV doesn't "need" Sunday Ticket as much as they did in the past.  It was a great way to get an exclusive product and draw customers, but do they still use that? 

And with regards to their own OOM platform, I think the NFL doesn't need to do that since they have others that will pay through the nose to do it for them. 

[Canned Goods n Ammo]

With MLB, NBA, NHL all being in control of their own out-of-market packages... how long before the NFL realizes that they can build their own OOM platform?

Unless DTV is overpaying for the Sunday Ticket rights (and thus the NFL will re-up with them), the underlying message in the article is to short DTV.

Let's face it, the NFL is simply an "entertainment company" that provides content.

Now, if Directv and the networks are willing to overpay and use the NFL as a loss-leader, then the NFL should stick with the current model. If they aren't overpaying, then the NFL could/should start distributing it's own product.

[ChicosBailBonds]

With MLB, NBA, NHL all being in control of their own out-of-market packages... how long before the NFL realizes that they can build their own OOM platform?

Unless DTV is overpaying for the Sunday Ticket rights (and thus the NFL will re-up with them), the underlying message in the article is to short DTV.

If it happens, it happens.  Everyone has their walking away price, and we know what ours is.  The math works or it doesn't, not really that complicated.  Been modeling this stuff for well over a year.  Whether to short it or not, who knows...I see Warren Buffett just bought a ton more for DTV just last week.  I'm thinking he smells consolidation.   

[ChicosBailBonds]

Like I've said a million times, the technology isn't the issue, it's the cost of the content and those making it.  Disney having conversations with Google, but they (Google, Sony, etc) will have to pay the same (or MORE) for the services that cable, satellite, etc pay.  No one offs (meaning no a la carte).  No way is Disney, Fox, HBO, etc going to take less money.  They are the linchpin.



http://www.bloomberg.com/news/2013-08-21/disney-s-espn-holds-preliminary-talks-for-web-based-pay-tv.html

John Skipper also comments about NFL Sunday Ticket via Twitter

https://twitter.com/Ourand_SBJ

[forgetful]

If it happens, it happens.  Everyone has their walking away price, and we know what ours is.  The math works or it doesn't, not really that complicated.  Been modeling this stuff for well over a year.  Whether to short it or not, who knows...I see Warren Buffett just bought a ton more for DTV just last week.  I'm thinking he smells consolidation.   

I saw that Buffett made a big investment in Dish Network ($20+ million), but didn't see him increase his investment in DTV.  Maybe I missed it, I know he has a stake in DTV, but the Dish play was new.

[ChicosBailBonds]

With MLB, NBA, NHL all being in control of their own out-of-market packages... how long before the NFL realizes that they can build their own OOM platform?

Unless DTV is overpaying for the Sunday Ticket rights (and thus the NFL will re-up with them), the underlying message in the article is to short DTV.

Or this analyst who believes DTV investors would relish DTV losing the NFL because it is a money loser.

http://finance.yahoo.com/news/google-nfl-meet-sunday-ticket-182327028.html

[forgetful]

Or this analyst who believes DTV investors would relish DTV losing the NFL because it is a money loser.

http://finance.yahoo.com/news/google-nfl-meet-sunday-ticket-182327028.html

Although a money loser as far as the bottom line Sunday Ticket brings in subscribers.  There is value there, how much I don't know. 

With the launch of Sunday Ticket on PS3/XBOX, that mitigates the need for DTV, but how much is DTV bringing in from those 'alternative' subscribers.

May be time to let it go if the $$ is too high.

[ChicosBailBonds]

I saw that Buffett made a big investment in Dish Network ($20+ million), but didn't see him increase his investment in DTV.  Maybe I missed it, I know he has a stake in DTV, but the Dish play was new.

He has a huge investment in DTV and made another one recently.  Yes, he made his first foray into Dish, that's why I think he smells consolidation between the two.

http://www.mediapost.com/publications/article/206900/could-buffett-drive-a-dish-directv-combination.html#axzz2cfEs0SqF

[ChicosBailBonds]

Although a money loser as far as the bottom line Sunday Ticket brings in subscribers.  There is value there, how much I don't know.  

With the launch of Sunday Ticket on PS3/XBOX, that mitigates the need for DTV, but how much is DTV bringing in from those 'alternative' subscribers.

May be time to let it go if the $$ is too high.

Sunday Ticket has never existed on XBox and we pulled the plug on it for PS3 this year....very few people bought it....very few.

http://www.joystiq.com/2013/08/14/ps3-wont-get-nfl-sunday-ticket-this-year-does-receive-live-eve/

Yes, there is "value", but it costs a ton of money and is a loss leader to be sure.  

Personally, I think the worst that happens is DTV has it non-exclusive at a lower price tag, but what do I know.  A lot of DTV subscribers are rural based with no broadband access so the NFL would lose those customers if it went exclusive to a broadband product.  All fun to speculate.  

Interesting times.  We'll see how it plays out.  

[Benny B]

He has a huge investment in DTV and made another one recently.  Yes, he made his first foray into Dish, that's why I think he smells consolidation between the two.

C'mon Chicos... you're brainier than that.  Do you honestly think:

A) The cultures of Dish and DTV are conducive to consolidation, but more importantly
B) The Feds are going to allow the only two sat distributors to merge when they're fighting the merger of two of the remaining five major airlines?

[ChicosBailBonds]

C'mon Chicos... you're brainier than that.  Do you honestly think:

A) The cultures of Dish and DTV are conducive to consolidation, but more importantly
B) The Feds are going to allow the only two sat distributors to merge when they're fighting the merger of two of the remaining five major airlines?

I went through all this many years ago when it got shot down the first time.  Do I think the cultures are the same, absolutely not.  Charlie Ergen is one of the cheapest men on the planet and his company routinely ranked worst place in America to work at.  They go after different types of customers, they are a value play.  All that being said, they own 14 million customers and more importantly, a crapload of Ku and Ka capacity that is valuable.  

Whether the gov't says yes, that's a great question.  When they said no last time, the internet tv possibilities didn't exist, neither did FiOS and UVerse.  Much more competition now than then.  Still a tough road, but much more possible now than back 8 to 10 years ago when we went through that lovely exercise.

I'd give it a 60-40 shot of approval.

http://www.deadline.com/2013/08/dish-network-directv-wall-street-merger-pressure/

http://www.deadline.com/2013/07/john-malone-to-charlie-ergen-merge-dish-with-directv-for-the-industrys-sake/

[ZiggysFryBoy]

Insider Trading with ChicosBailBonds. 

[The Lens]

I went through all this many years ago when it got shot down the first time.  Do I think the cultures are the same, absolutely not.  Charlie Ergen is one of the cheapest men on the planet and his company routinely ranked worst place in America to work at.  They go after different types of customers, they are a value play.  All that being said, they own 14 million customers and more importantly, a crapload of Ku and Ka capacity that is valuable.  

Whether the gov't says yes, that's a great question.  When they said no last time, the internet tv possibilities didn't exist, neither did FiOS and UVerse.  Much more competition now than then.  Still a tough road, but much more possible now than back 8 to 10 years ago when we went through that lovely exercise.

I'd give it a 60-40 shot of approval.

http://www.deadline.com/2013/08/dish-network-directv-wall-street-merger-pressure/

http://www.deadline.com/2013/07/john-malone-to-charlie-ergen-merge-dish-with-directv-for-the-industrys-sake/

Can't the argument be made that consumer only have 1 cable choice so why is the customer owed multiple satellite choices?  And to you point there is now many other forms of delivery.

[ChicosBailBonds]

Insider Trading with ChicosBailBonds.  

LOL

I'm posting articles about everyone else's speculation...which happen to be no different than mine.  For the record, I do own stock in both companies, but have for many years.  Just as I own stock in At&T and Verizon.  Consolidation will happen at some point, someone will buy someone....well that's my guess.  I actually thought it would happen about 3 or 4 years ago, but I have to think at some point it does.  Certainly Buffett, Malone, etc all think so and who am I to disagree with their opinions.   

[Benny B]

LOL

I'm posting articles about everyone else's speculation...which happen to be no different than mine.  For the record, I do own stock in both companies, but have for many years.  Just as I own stock in At&T and Verizon.  Consolidation will happen at some point, someone will buy someone....well that's my guess.  I actually thought it would happen about 3 or 4 years ago, but I have to think at some point it does.  Certainly Buffett, Malone, etc all think so and who am I to disagree with their opinions.   

Yeah, nice try... ask Martha Stewart how that excuse played out for her.

[ChicosBailBonds]

Interesting article....a few things I categorically disagree with, but some are spot on.


Why Google \ You Tube aren't getting Sunday Ticket from Forbes


http://www.forbes.com/sites/markrogowsky/2013/08/22/5-reasons-nfl-sunday-ticket-isnt-coming-to-youtube/

[ChicosBailBonds]

Yeah, nice try... ask Martha Stewart how that excuse played out for her.

    I'm not saying anything that isn't public knowledge, we take that stuff very seriously.    http://www.hollywoodreporter.com/news/ceo-charter-was-a-mess-426271

We'll see how this all plays out, certainly has created a nice buzz the last few days, that's for sure.  

[PBRme]

C'mon Chicos... you're brainier than that.  Do you honestly think:

A) The cultures of Dish and DTV are conducive to consolidation, but more importantly
B) The Feds are going to allow the only two sat distributors to merge when they're fighting the merger of two of the remaining five major airlines?

They let Sirius and XM "consolidate"

[Benny B]

They let Sirius and XM "consolidate"

Sirius/XM competes with terrestrial radio much differently than the way Dish/DTV competes with terrestrial TV distributors.  For one, satellite radio's competition doesn't cost anything for a subscription, so it's much more difficult to make argument that a monopoly for satellite radio is disadvantaging to consumers when the vast majority of consumers already get their radio "needs" via other methods.  In other words, when Sirius acquired XM (or vice versa), you reduced by one the total number of what could be dozens of radio providers available in any given part of the country.

When you look at Dish and DTV collectively, they have a combined 40% of the entire US cable/sat/IPTV market... moreover, their 34M subscribers would not only make them #1 in the entire country, they would have over 1.5x the number of subscribers as 2nd place (Comcast - 22M).  And this is nationwide... consider the fact that Comcast, TWC, Charter, FIOS & UVerse aren't available everywhere in the country, but satellite is.  Not so much in the metropolitan areas, but most rural parts of the country are going to have three options for subscription TV: the local cable provider (be that Comcast or someone else), DTV and Dish.  Let two of those merge together, and you've reduced competition by a third.

Chico's is probably right that Buffett started taking positions because he saw an opportunity to create a quasi-monopoly... and who could blame him?  For the past couple decades, we've been in a corporate/government environment that has become quite accepting when it comes to consolidation and mergers of large companies.  In hindsight, there's no way Delta and NWA should ever have been allowed to merge, but it did.  And based on that precedent alone, there's no way that the FTC should ever have blocked AA and US Air, but they did. 

One other lesser, but significant, consideration.... the concept of "too big to fail" still gives heartburn to people on both sides of the aisle; unfortunately, that's not an issue that rests solely with the banks, insurance companies, etc.  Delta, for example, only employs 80,000 people directly, but their vendors, partners and customers might bring that into the hundreds of thousands or more who could have their lives drastically impacted by a failure of that airline.  You and I might not be affected by Delta going Chapter 7, but that's not something lawmakers in places like Georgia ever want to face.

[ChicosBailBonds]

Late yesterday, Citigroup’s Jason Bazinet ran some numbers on new negotiations, finding that a victory for Google might not be a bad thing for DirecTV shareholders: “When we run sensitivity analysis, we estimate that at $1.50 billion a year, DirecTV would be more rational to walk away than to renew The Sunday Ticket. At $1.50 billion a year, the NFL would capture all the Sunday Ticket revenue ($770 million), all the pre-tax profit DirecTV generates on Sunday Ticket subs from non-Sunday Ticket content ($610 million per year) and all of the pre-tax profit DirecTV generates from having incremental scale when it negotiates programming contracts for non-Sunday Ticket content ($135 million a year). If Google is willing to pay more than that, we believe DirecTV investors should welcome the prospect of DirecTV management letting it migrate to the web.”

[Canned Goods n Ammo]

Late yesterday, Citigroup’s Jason Bazinet ran some numbers on new negotiations, finding that a victory for Google might not be a bad thing for DirecTV shareholders: “When we run sensitivity analysis, we estimate that at $1.50 billion a year, DirecTV would be more rational to walk away than to renew The Sunday Ticket. At $1.50 billion a year, the NFL would capture all the Sunday Ticket revenue ($770 million), all the pre-tax profit DirecTV generates on Sunday Ticket subs from non-Sunday Ticket content ($610 million per year) and all of the pre-tax profit DirecTV generates from having incremental scale when it negotiates programming contracts for non-Sunday Ticket content ($135 million a year). If Google is willing to pay more than that, we believe DirecTV investors should welcome the prospect of DirecTV management letting it migrate to the web.”

It makes sense... I mean, eventually, it's not going to be worth it for DTV.

NFL Ticket is a great loss-leader that generates subscriptions. However, at some point you reach relative market saturation, and NFL Sunday ticket isn't bringing in enough additional subscribers and revenue to make it worth it.

Google is an entirely different animal. BUT... in theory, could Google eventually use the NFL to launch google fiber in every market? Probably not ready for that yet... but it would be an interesting technique.

[ChicosBailBonds]

Basically what I said yesterday, if Google gets it doesn't mean DTV doesn't also keep it.

http://www.forbes.com/sites/mikeozanian/2013/08/22/a-google-nfl-tv-buy-does-not-mean-directv-must-exit/