Senate Panel Calls Hearing on DirecTV's Sunday Ticket Package

[cybrsurfer]

Thank you Greg...

Please explain. You appear to be way smarter than the NFL, so we would like to understand your position. Maybe the NFL should hire you if you are correct.

Well we know that DirecTV has 15.6 Million customers. Dishnetwork has 13.4 Million customers. Comcast has 26 Million customers. Adding other Cable companies adds even more customers. Many sports fans on Comcast and Dish have the desire to subscribe to ST. So it's clear that the NFL will benefit from adding potentially 20 million or more viewers and subscriptions. The NFL won't have to rely on one company for a maximum possible subscription of 15.6 Million (assuming all DirecTV customers subscribe to ST). Obviously at that cost, most average income households can't afford that price, but still want the ability to watch. If the NFL opened up the market to all Satellite providers and Cable companies they could negotiate lower prices for all carriers, and this would translate into lower cost's for each individual subscriber to get the ST packages. I don't like the idea that sports programming is restricted to high income customers and to one company. Lower income customers are not bad people and they shouldn't be treated as third class. There are 300 million households in the United States. 15.6 Million customers by DirecTV is not enough for NFL coverage for the entire population.

 

[cablewithaview]

All carriers (DirecTV/Dishnetwork/Comcast) should be allowed to carry programming. The NFL would make much more revenues by opening the doors to all. Viewership would be much higher, and it would drive the cost to have ST down tremendously by not restricting it to one company.

agreed even close up the "Philly loop hole"

Yes, Greg even this cable man is fair and see it from both sides of the fence, even if your side kick doesn't feel that way.

As for mark ups, it goes back to every argument about price increases. People don't want it but if they had a choice to do without or pay, they will pay then do without. So what do you do?

 

[Greg Bimson]

Okay. Now for the major errors:

There are 300 million households in the United States. 15.6 Million customers by DirecTV is not enough for NFL coverage for the entire population.

There are 110 million households in the US. So, 15.6 million represents between 10 and 15 percent of the nation. And, unlike a cable company, all one has to do is choose DirecTV and you have the ability to get Sunday Ticket.

Many sports fans on Comcast and Dish have the desire to subscribe to ST. So it's clear that the NFL will benefit from adding potentially 20 million or more viewers and subscriptions.

Add potentially another 20 million more Sunday Ticket subscribers?

The first national game on FOX this year, Jacksonville at Dallas, averaged around a 15 rating. This means that about 16.5 million people watched the game. If Sunday Ticket is sold to 20 million people, you are now saying that more people would pay to watch Sunday Ticket than actually watch the national games.

That of course would devalue the NFL contracts with FOX and CBS, which each have the right to limit the distribution of Sunday Ticket.

If the NFL opened up the market to all Satellite providers and Cable companies they could negotiate lower prices for all carriers, and this would translate into lower cost's for each individual subscriber to get the ST packages.

Negotiate lower prices for all carriers. That translates to the NFL taking a pay cut from the money they currently receive from DirecTV.

The cable companies and the satellite companies will not pay big bucks for Sunday Ticket if it isn't exclusive. The multichannel carriers would demand Sunday Ticket act like every other PPV or out-of-market sports package, where the revenue from the sales of the package is split 50/50 with the multichannel carrier. In order for the NFL to receive $700 million by offering Sunday Ticket to all carriers, and if setting the price at $150 per package, the NFL would need to sell just under 10 million subscriptions simply to get back to the $700 million that they are already guaranteed by the DirecTV contract.

Sunday Ticket will not generate 10 million subscribers because CBS and FOX will not let that happen.

 

[cybrsurfer]

Okay. Now for the major errors:There are 110 million households in the US. So, 15.6 million represents between 10 and 15 percent of the nation. And, unlike a cable company, all one has to do is choose DirecTV and you have the ability to get Sunday Ticket.Add potentially another 20 million more Sunday Ticket subscribers?

The first national game on FOX this year, Jacksonville at Dallas, averaged around a 15 rating. This means that about 16.5 million people watched the game. If Sunday Ticket is sold to 20 million people, you are now saying that more people would pay to watch Sunday Ticket than actually watch the national games.

That of course would devalue the NFL contracts with FOX and CBS, which each have the right to limit the distribution of Sunday Ticket.Negotiate lower prices for all carriers. That translates to the NFL taking a pay cut from the money they currently receive from DirecTV.

The cable companies and the satellite companies will not pay big bucks for Sunday Ticket if it isn't exclusive. The multichannel carriers would demand Sunday Ticket act like every other PPV or out-of-market sports package, where the revenue from the sales of the package is split 50/50 with the multichannel carrier. In order for the NFL to receive $700 million by offering Sunday Ticket to all carriers, and if setting the price at $150 per package, the NFL would need to sell just under 10 million subscriptions simply to get back to the $700 million that they are already guaranteed by the DirecTV contract.

Sunday Ticket will not generate 10 million subscribers because CBS and FOX will not let that happen.

NFL would get far more then $3.5 Billion (DirecTV) from one company if they opened the market up to Dish and Cable. They could get $10 billion between the 3 companies instead of just 1. I don't agree with the viewership ratings you mentioned, it's far more then 10 million interested in watching football. If only 10 million people followed football there would be no football at all.

The US has 300 million people, so it has to have more then 110 million households.

 

[Greg Bimson]

Ratings are based upon households, not "viewers".

I will not provide the links for this, so if you wish to go and find them, at least you'll have a starting point.

The US has 300 million people, so it has to have more then 110 million households.

Nielsen Media does a large chunk of the TV ratings business. It is their ratings that everyone uses to determine viewership. As of the 2006-2007 listing, there are a total of 111,348,110 households in the United States.

I don't agree with the viewership ratings you mentioned, it's far more then 10 million interested in watching football. If only 10 million people followed football there would be no football at all.

I didn't say 10 million people, I said 10 million households. Everyone doesn't watch football.

NFL would get far more then $3.5 Billion (DirecTV) from one company if they opened the market up to Dish and Cable. They could get $10 billion between the 3 companies instead of just 1.

You've made a big mistake.

DirecTV pays $700 million a year as an exclusive for Sunday Ticket. If Sunday Ticket was opened up to both Dish Network and Comcast, no one would be paying $700 million a year.

NO ONE. And it wouldn't even be close.

 

[cybrsurfer]

If 700 Million is correct then NFL can ask that from all sat & cable...

Ratings are based upon households, not "viewers".

I will not provide the links for this, so if you wish to go and find them, at least you'll have a starting point.Nielsen Media does a large chunk of the TV ratings business. It is their ratings that everyone uses to determine viewership. As of the 2006-2007 listing, there are a total of 111,348,110 households in the United States.I didn't say 10 million people, I said 10 million households. Everyone doesn't watch football.You've made a big mistake.

DirecTV pays $700 million a year as an exclusive for Sunday Ticket. If Sunday Ticket was opened up to both Dish Network and Comcast, no one would be paying $700 million a year.

NO ONE. And it wouldn't even be close.

I certainly respect your view, but I disagree on many points. Lets say that the $700 million figure is accurate (assuming it is based by year). Then the NFL can ask the same price from all carriers, not less. The census reports 300 million people in the US as documented (doesn't include illegals). Who cares what the Nealson's say, they have an agenda and bias. Many people love to watch football, and it's so many more then 10 million households... it just has to be. The $3.5 billion I mentioned covers the entire contract life, not yearly.

Thanks for the feedback, but I disagree with the numbers.

 

[cybrsurfer]

Most carriers like DirecTV/Dish/Cable TV/Verizon FiOS haven't tapped all available...

Let's assume based on what some say the Nealson's report approximately 110 Million households. Then it's clear based on the amount of subscribers reported by many carriers in total, are not coming close to covering all available customers. So sports fans out number any other kind of fan like movie fans. The sports programming market in HD is not available to the many sports fans that want the programming. You cannot leave it up to a sole carrier for a given sport. We all know with simple economics that monopolies are not right for the public.

 

[Greg Bimson]

Lets say that the $700 million figure is accurate. Then the NFL can ask the same price from all carriers, not less.

Sure, the NFL could ask for the same price from all carriers. Except that DirecTV will no longer be paying $700 million a year if it isn't exclusive.

The census reports 300 million people in the US as documented (doesn't include illegals). Who cares what the Nealson's say, they have an agenda and bias. Many people love to watch football, and it's so many more then 10 million households... it just has to be.

Do the research.

And try this link. You might wish to realize that the Sunday Night Football package on NBC has never been seen by 20 million households on any night yet. And this is without any other NFL game being broadcast.

So if Sunday Ticket was being subscribed by 15 million households, how badly do you think the FOX and CBS coverage would be skewed because of the availablity of the package. That is specifically why FOX and CBS have a say if the NFL ever wants to expand Sunday Ticket coverage.

 

[Greg Bimson]

You cannot leave it up to a sole carrier for a given sport. We all know with simple economics that monopolies are not right for the public.

And I would rather have the NBC doing the Super Bowl this year instead of CBS, because NBC's pre-game would be so much better than CBS'. Yet I don't have that choice.

The NFL has that choice. They've chosen exclusive contracts for all of their television broadcasting properties.

Or, why not have CBS, FOX and NBC all show the Super Bowl? That way I have a choice of announcers.

 

[cybrsurfer]

It's impossible for any tracking to specify the true number of viewers...

Sure, the NFL could ask for the same price from all carriers. Except that DirecTV will no longer be paying $700 million a year if it isn't exclusive.Do the research.

And try this link. You might wish to realize that the Sunday Night Football package on NBC has never been seen by 20 million households on any night yet. And this is without any other NFL game being broadcast.

So if Sunday Ticket was being subscribed by 15 million households, how badly do you think the FOX and CBS coverage would be skewed because of the availablity of the package. That is specifically why FOX and CBS have a say if the NFL ever wants to expand Sunday Ticket coverage.

Nice link Greg, however no tracking organization can truely say what the real numbers are for viewership. Nealson can only track households that agree to have tracking software that reports to them. Many people refuse to allow tracking or monitoring of their habits. I block DirecTV (you have a choice) from monitoring what I watch, so I cannot be counted to provide any source on my programming choices.

I do appreciate your feedback, and I'm not in anyway trying to be difficult.

 

[Greg Bimson]

Nice link Greg, however no tracking organization can truely say what the real numbers are for viewership.

So how can you say that the NFL would get way more money than $700 million a year for Sunday Ticket if you have no real numbers for tracking what a non-exclusive package would sell?

 

[cybrsurfer]

Simple economics...

So how can you say that the NFL would get way more money than $700 million a year for Sunday Ticket if you have no real numbers for tracking what a non-exclusive package would sell?

The NFL as you said can ask what ever they want, and I do agree with that. They are not required to only have one provider either. That contract can end, and will eventually. So generally one can only guess, unless your directly involved in the negotiations. I think we both agree the market for NFL is underserved and many more should and can get it via broadcast.

So not to continue this debate, I agree with the Senate in going ahead with forcing competition, and opening the market to all. Despite the dispute over the exact numbers.

 

[Greg Bimson]

I agree with the Senate in going ahead with forcing competition, and opening the market to all.

But what exactly do you mean by "forcing competition"? You think DirecTV would offer the package for $249 and Comcast would offer the package for $199? I will tell you that the other sports packages are priced by the leagues, not the multichannel vendors. Therefore, it will be the NFL that sets the pricing to the customer, and there will not be "competition".

 

[cybrsurfer]

They will be getting far more then the $700 million, and would reduce the price ...

But what exactly do you mean by "forcing competition"? You think DirecTV would offer the package for $249 and Comcast would offer the package for $199? I will tell you that the other sports packages are priced by the leagues, not the multichannel vendors. Therefore, it will be the NFL that sets the pricing to the customer, and there will not be "competition".

With more vendors to pay more to the NFL (higher then $700 Million year) this would allow the NFL to sell the package to vendors for less to the end user. For instance if they can get 10 billion of a 3 year contract from all vendors (estimate) then they don't need to charge more to offer services to consumers, the cost goes down to us/enduser.

DBSTalk reports the contract to be $3.5 billion that DirecTV pay's for exclusive rights. I don't know if that is yearly, or every 3 years... but that's what they pay per contract. I Don't know how long the contract runs.

No one company should have exclusive rights to carry any product or service, whether it be a sport or anything else... I think we all can agree to that.

 

[damaged]

With more vendors to pay more to the NFL (higher then $700 Million year) this would allow the NFL to sell the package to vendors for less to the end user. For instance if they can get 10 billion of a 3 year contract from all vendors (estimate) then they don't need to charge more to offer services to consumers, the cost goes down to us/enduser.

That is one possibility, another is that 'more vendors pay more to the NFL', this would allow the NFL to keep prices the same to the end consumer, and see an enlarged profit margin...hmmm, which one would they pick?

 

[boston area dtv]

Forcing competion? Did someone bump their head? The last I checked there was an open bid. An open competition to D*, E* and cable. D* won. Dont cry over it.

Perhaps you would like to sign up for D*? Please feel free to write me down as the one who referred you.

In 2010 when the rights up for grabs again perhaps cable or E* will win the rights. And Im sure that after they pony up for the rights they will REDUCE the price to $100.00 a season. After all thats what it costs in Canada right?

 

[cybrsurfer]

They would charge less to the ultimate customer because income would allowe for it.

That is one possibility, another is that 'more vendors pay more to the NFL', this would allow the NFL to keep prices the same to the end consumer, and see an enlarged profit margin...hmmm, which one would they pick?

If the NFL increased revenues from carriers, then they can offer the ultimate cost of carrying programming to all for less, because they have better revenues. More competition translates into less cost for the consumer, not the exact same.

 

[cybrsurfer]

I hope all do bid when the contract ends, if congress doesn't vacate it earlier...

Forcing competion? Did someone bump their head? The last I checked there was an open bid. An open competition to D*, E* and cable. D* won. Dont cry over it.

Perhaps you would like to sign up for D*? Please feel free to write me down as the one who referred you.

In 2010 when the rights up for grabs again perhaps cable or E* will win the rights. And Im sure that after they pony up for the rights they will REDUCE the price to $100.00 a season. After all thats what it costs in Canada right?

We will have to see what happens. If Congress steps in before the contract ends, then it possible all carriers will be allowed to enter and offer NFL to it subscribers.

 

[damaged]

If the NFL increased revenues from carriers, then they can offer the ultimate cost of carrying programming to all for less, because they have better revenues. More competition translates into less cost for the consumer, not the exact same.

Yes, they _can_, but the question is, _will_ they, based on involved parties past, I'm betting not much will change for the end consumer with regards to price.

 

[Greg Bimson]

DBSTalk reports the contract to be $3.5 billion that DirecTV pay's for exclusive rights. I don't know if that is yearly, or every 3 years... but that's what they pay per contract. I Don't know how long the contract runs.

From 2006-2010, DirecTV will pay $3.5 billion, which translates to $700 million a year.

No one company should have exclusive rights to carry any product or service, whether it be a sport or anything else... I think we all can agree to that.

Sure. Can you talk to the NFL and have them put the Super Bowl on three different networks? It isn't fair that CBS has the exclusive to the Super Bowl this year.

With more vendors to pay more to the NFL (higher then $700 Million year) this would allow the NFL to sell the package to vendors for less to the end user. For instance if they can get 10 billion of a 3 year contract from all vendors (estimate) then they don't need to charge more to offer services to consumers, the cost goes down to us/enduser.

You are completely missing the boat. DirecTV is now paying $700 million a year because they didn't want cable to have the package. Last year they paid $400 million, and that was only because DirecTV renegotiated to stop the NFL from offering Sunday Ticket to Comcast.

In other words, the NFL would have only received $400 million this year from DirecTV, and probably less than $300 million from some cable companies. The rumor is that nowhere near $300 million was offered by the cable companies, so the NFL asked DirecTV for $700 million a year to keep it exclusive.