Is DirecTV’s Sunday Ticket Package a Monopoly?

DirecTV’s NFL Sunday Ticket product enables viewers to choose which NFL game to watch (all games are provided, instead of the just the local and nationally broadcasted games), but only to the lucky few who are able to afford and get the satellite service DirecTV.  Not all homes can get DirecTV, and can only get a signal after an expensive installation (i.e. cutting down trees and installing a metal pole in some cases).

directvx-largeAlthough the NFL won’t let anyone in the US except DirecTV subscribers watch and use Sunday Ticket, they are angry with Time Warner and Cablevision for not providing their NFL Network on every basic cable system, which was how ESPN and CNN took off.  Comcast will also only provide NFL Network to customers who buy their premium sports package.  The NFL is actually asking Congress to intervene to force the NFL Network onto basic cable.  The cable carriers response is simple: open up Sunday Ticket for everyone, not just DirecTV, with whom the NFL signed a brand new 8 year deal worth $1.5 annually on September 30, 2014.  But the Sunday Ticket arrangement assures that only a small portion of the American population can enjoy viewer choice on Sundays. The same voters who are taxed to subsidize the NFL (about $1 billion annually) are denied the choice of which games to watch.  Ironically, anyone living in Canada or Mexico can sign up for NFL Sunday Ticket, without any cable-carrier restrictions, as telecommunication law forbids sole-carrier contracts in those countries.  Inside the US, however, the NFL’s antitrust waiver allows it to screw their consumers.

NFL-Preview

DirecTV, however, has this year added a feature to calm the angry NFL fans who cannot afford the TV service or physically can’t get a dish installed.  For $199 per season fans can get Sunday Ticket streaming to their iPad, smartphone or tablet. However, in order to receive this service, you must prove that DirecTV cannot install a dish where you live.  DirecTV knows how important its deal with the NFL is, and so does AT&T, who’s proposed merger with DirecTV hinged on their renewal of the Sunday Ticket Deal with the NFL.  Professional football is among the most valuable brands in the entertainment world, so of course a major communications corporation would want a monopoly over a major NFL product, where they can charge a price that will certainly get paid by millions of football fans, year after year.

 

2 thoughts on “Is DirecTV’s Sunday Ticket Package a Monopoly?

  1. For $199 per season? – that sounds awfully expensive to me, but then I always refused to hook up to cable, even though my old house was wired for it and the “box” for the neighborhood was in my back yard it would not have been hard to hook up.

    So how to respond as a team owner? How can you extract the most “taxes” (net revenue) from viewers. Set up a “demand research” company and charge the profit maximizing level? Or does that beg for new entry and result in a slowness by incumbents to respond to additional signals.

  2. As a dedicated Minnesota Vikings fan living in VA, I deal with the frustrations of Sunday ticket every week. Early on I considered purchasing it to watch the games every week since Lexington is noticeably lacking in sports bars, but for those of us that just want to stream 16 games over the internet $199 is utterly ridiculous. Direct TV may not have to worry about new entrants because of deals with the NFL, but this hasn’t stopped illegal substitutes for popping up and eating away at sales. Internet streams for games are pretty easy to find and free, and ideally the pressure from this will lead to the same market effects we would expect from legal competitors.

Leave a Reply