The gargantuan merger of AT&T and DirecTV announced Sunday could hinge on next year’s football season, according to AT&T’s latest financial filings.
The telecom giant, which wants to acquire DirecTV for $48.5 billion, has carved out an exception that would allow it to back out of the merger if DirecTV is unable to renew its popular NFL Sunday Ticket package, which lets viewers watch professional games not broadcast in their area.
“The parties also have agreed that in the event that DirecTV’s agreement for the “NFL Sunday Ticket” service is not renewed substantially on the terms discussed between the parties, the Company may elect not to consummate the merger,” it wrote in financial documents reported Monday to the Securities and Exchange Commission.
AT&T additionally noted that it “will not have a damages claim arising out of such failure so long as DirecTV used its reasonable best efforts to obtain such renewal.”
DirecTV paid the NFL $4 billion in 2009 to extend until 2014 an exclusive contract for NFL Sunday Ticket, which allows customers to view professional football games played on Sunday afternoons that are unavailable on local affiliates. The service allows fans to watch games that are produced by Fox or CBS, regardless of where they live.
The condition presumably gives the NFL powerful leverage to demand an even higher fee from DirecTV.
On a press call Monday, DirecTV CEO Michael White said the satellite network is in an “active discussion” with the NFL about renewing NFL Sunday Ticket. White added he was “highly confident” a deal would get done before the end of the year.
If the merger is approved, AT&T would become the second-largest player in the pay-TV market after a combined Comcast-Time Warner Cable. The deal would likely help DirecTV compete by letting it offer bundles of broadband Internet and wireless services in addition to its TV packages.
AT&T is attempting to placate regulators by promising to abide by the Federal Communication Commission’s 2010 net-neutrality rules. The company is also promising to expand broadband services to 15 million Americans, especially in rural areas. But already some consumer groups are knocking the deal as anticompetitive.
The House Judiciary Committee said it will hold a hearing soon to review the merger deal.
What We're Following See More »
Donald Trump is expected Monday to sign an executive order which will mark his administration's first action on offshore oil and gas drilling. The order is expected to call for a "review of the locations available for offshore oil and gas exploration and of certain regulations governing offshore oil and gas exploration."
Vice President Mike Pence has cut his Asia trip short "to race back to Washington, where the Trump administration faces a critical week on tax reform and a funding plan to keep the government running, an aide said on Sunday." Pence will return to Washington on Tuesday morning instead of Wednesday. Trump has a busy week ahead, as he plans to roll out a tax reform on framework, sign a number of executive orders, and works to keep the government open past Friday.
"Centrist Emmanuel Macron and far-right politician Marine Le Pen led the first round of voting in France’s presidential election, according to early projections, as voters redrew the political map, placing the European Union at the center of a new political divide. Projections by the Kantar-Sofres polling firm showed Mr. Macron on track to win the first round with about 24% of the vote, ahead of Ms. Le Pen with nearly 22%." The vote marks the end of the country's dominance by conservative and socialist parties. The top vote-getters head to a runoff on May 7.
President Trump will deliver the keynote address for at the National Holocaust Museum's National Day of Remembrance ceremony on Tuesday. He'll speak from the Capitol Rotunda. The move is likely an effort to try to mend fences with Jewish groups. In January, "the White House ignited controversy when it didn't mention Jews or anti-Semitism in a statement on International Holocaust Remembrance Day." And certain members of his inner circle are still suspected of harboring white supremacist or anti-Semitic views."
"President Trump and his top aides applied new pressure Sunday on lawmakers to include money for a wall on the U.S.-Mexico border in a must-pass government funding bill, raising the possibility of a federal government shutdown this week. In a pair of tweets, Trump attacked Democrats for opposing the wall and insisted that Mexico would pay for it “at a later date,” despite his repeated campaign promises not including that qualifier. And top administration officials appeared on Sunday morning news shows to press for wall funding, including White House budget director Mick Mulvaney, who said Trump might refuse to sign a spending bill that does not include any."