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DirecTV no doubt thrilled nervous stockholders on Wednesday by announcing it has struck a long-term deal with the NFL that allows it to carry every Sunday afternoon out-of-market game, an extremely popular package known as NFL Sunday Ticket.
Financial terms of the agreement were not disclosed, but a source familiar with the negotiations said the deal is worth $1.5 billion a year for eight years, a 50 percent increase over what DirecTV had been paying the NFL. DirecTV is in the midst of being acquired by AT&T for $48.5 billion, but that deal was contingent on the satellite television provider’s ability to close a deal for NFL Sunday Ticket.
AT&T announced in May its intention to buy DirecTV for $95 a share, and investors worried that if the deal fell apart DirecTV shares would fall into the $70 range. On Wednesday, the stock closed slightly higher to $86.59 and shares rose another 1 percent after the closing bell when the NFL deal was announced.
The marriage of AT&T and DirecTV still requires regulatory approval.
DirecTV said on Wednesday that its new NFL pact allows it to continue its Red Zone channel, the new DirecTV Fantasy Zone, and it also extends rights to stream NFL Sunday Ticket on mobile devices via broadband. Analysts say the Internet rights were particularly appealing to AT&T, given its 16.5 million wired broadband subscribers and 58 million wireless smartphone customers.
The price of NFL Sunday Ticket has skyrocketed for DirecTV. In 1994 the provider paid $25 million a year for those rights and four years later it jumped to $200 million. In its prior deal, which was set to expire this year, DirecTV was paying roughly $1 billion annually for NFL Sunday Ticket.
“We are pleased to continue our partnership with DirecTV,” said NFL Commissioner Roger Goodell in a statement on Wednesday. “DirecTV and NFL Sunday Ticket have served our fans well for 20 years and continue to complement our broadcast television packages. We appreciate DirecTV’s commitment to the NFL Network, which it has carried since the channel launched in 2003.”
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