Google angling for NFL games
Google has been holding talks with the National Football League, raising speculation that the internet monolith is seeking new inroads into television, and adding yet another data point pointing toward the weakening of the long relationship between content owners and traditional MVPDs.
Another case in point is ESPN President John Skipper today at press briefing saying that ESPN is willing to entertain offers from any distributor willing to negotiate rights for its entire sports package at the current or higher price, according to Bloomberg News. This all follows the rumor that Viacom has negotiated a deal to provide MTV, Nickelodeon and perhaps other channels to Sony for an over-the-top service.
Other tech companies like Apple are reportedly in talks with cable providers to boost access to blockbuster television shows through their devices.
With Google sitting on a cash pile of $48 billion, the league's Sunday Ticket package is easily within its reach.
Earlier this year, Google Chief Financial Officer Patrick Pichette said, "It serves the shareholder best to actually have that strategic ability to pounce" when there is the opportunity to make a major acquisition.
The NFL confirmed its meetings with Google Wednesday, but declined to discuss the nature of those talks, as did Google.
"Members of our office meet often with innovative leaders in Silicon Valley and around the world," the NFL said in a statement. "We are constantly looking for ways to make our game better on the field, in the stadium and for fans."
The contract is currently held by DirecTV, which pays about $1 billion annually for the rights. That contract, however, expires at the end of the 2014 season.
Citi analyst Jason Bazinet believes that DirecTV is losing money on the deal, generating only about $725 million a year in revenue. He believes a new contract would run about $1.5 billion if DirecTV were to make another go for it.
DirecTV has a market capitalization of about $32 billion and would be unlikely to remain for long in a bidding war with Google, which has a market capitalization nine times that.
Bazinet believes DirecTV investors would welcome the prospect of letting the NFL go.
The Sunday Ticket Package provides fans with access to most out-of-market NFL games not televised nationally on ESPN or on NBC.