DirecTV’s Big Revenue Generator

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Source: DirecTV.com

Mike Colegrove, Contributing Writer

In 2014, the National Football League (NFL) extended its contract with DirecTV for the next eight years — giving DirecTV exclusive rights to televise any NFL game. After the previous contract expired in 2014, the NFL implemented a 50 percent raise in price into the new contract, making the NFL Sunday Ticket pricier for DirecTV.

Two TV companies that are affiliated with the NFL and offer ways to watch games are Spectrum and DirecTV. DirecTV’s biggest profit tool is from its Sunday Ticket. Meanwhile, Spectrum has bundles that offer NFL channels. Both companies generate revenue by partnering with other companies or customers.

One benefit of subscribing to the NFL Sunday Ticket is having a guaranteed way to watch your favorite team, even if they are out-of-market. Bloomberg estimated that 10 percent of DirecTV’s 20.8 million customers subscribed to the Sunday Ticket. As the number of subscribers for the NFL Sunday Ticket increase, so does the cost of the subscription.

According to ESPN, the NFL is set to make $1.5 billion per year for the next eight years with its new TV deals — a half billion more per year compared to its last contract with DirecTV. By 2022, the year the new deal expires, the NFL will have received $12 billion in total from DirecTV.

But with so much money being paid to the NFL, how do telecom giants like DirecTV see returns on their investments?

In New York state alone, there are many local companies that have an interest and pay for the Sunday Ticket. According to the financial insight website Seeking Alpha, back in the 2014 NFL season, DirecTV made about $560 million off its 2.08 million subscribers.

BBG’s and Sunday Ticket’s Payment Method

DirecTV’s Sunday Ticket is a revenue-generator — drawing interest to bar companies located in upstate New York. Beer Bites Games (BBG’s), a bar located in Yorkville, seized the opportunity of handling successful business with DirecTV

According to BBG’s bar owner, Kris Carleo, DirecTV’s NFL Sunday Ticket pricing for businesses is determined by its estimated viewing occupancy (EVO). The EVO of a company’s building is the amount of people that can fit into the building. BBG’s EVO is 71 and Carleo pays $2,200 per season to DirecTV

“Yeah it’s very frustrating that we pay based on occupancy,” Carleo said. “We’ve had a day where only 20 people are in the bar and we’re still paying DirecTV as if 71 are watching. Then there’s days where it fills up here and it feels really good because it’s increasing our profits on Sundays.”

Carleo’s partner and bar manager, Donna Vibero, praised what the Sunday Ticket brings to BBG’s on Sunday’s. According to Vibero, the Sunday Ticket has brought business and joy to the bar.

“We’d be dead on Sundays without the Ticket,” Vibero said. “It also brings a lot of fun and paying customers. One of our bartender’s made a friendly bet with a customer for the Patriots-Packers game. She lost the bet and now has to wear a Patriots jersey every Sunday.”

Ever since joining DirecTV, prices have varied for BBG’s. According to Carleo, the cost was once down to as low as $1,700 per year but then increased up to $2,800 per year four years later. One year after the price was $2,800 per year, DirecTV lowered the price down to $2200 per year. BBG’s is currently subscribed to the Sunday Ticket at a price of $2200 per year.

NFL Sunday Ticket at The Famous 727 Bar

This November marks the one-year anniversary of The Famous 727 Bar at Venice Pizzeria located in Yorkville. The Famous 727 Bar needed a way to get its name out, so bar manager Tina Moats ultimately decided to purchase the Sunday Ticket to pull in more customers.

According to Moats, to determine the Ticket pricing, DirecTV makes the bar include the capacity of both the bar and the pizzeria, which adds up to 100. Even though the pizzeria cannot air it, its occupancy is still included to the bars subscription fee. This year’s fee for the whole NFL season cost The Famous 727 Bar $5,000.

Moats does not believe his bar is able to pull in customers only because of the Sunday Ticket. She believes there are other factors that come into play.

“We have so many different drink specials and food specials that keep the cost so low, I mean $1.50 drafts are just so unheard of,” said Moats. “10 wings for 50 cents is so unheard of, and we offer that on Sundays. Things can get pretty hectic for us.”

According to Moats, The Famous 727 Bar had three straight Sundays where they sold out of wings and three different drafts. The Sunday Ticket and bar specials have lured in frequent customers.

“I’m hoping things continue to get better,” Moats said. “I love the excitement our Sunday Ticket along with our specials bring to our customers. I want everybody in Utica to experience football Sunday here at The Famous Bar.”

The Benefits of Bill Gray’s Having the Sunday Ticket

Bill Gray’s (BG’s) Tap Room in Rochester is a restaurant known for the “world’s greatest cheeseburger.” The BG’s location on North Greece Road has a new bar inside with the Sunday Ticket on all their TVs each Sunday of the season.

This year is the first year the BG’s Tap Room has been open. According to Melissa DiLuglio, corporate manager at BG’s, the price to have the Sunday Ticket is high — the fee was around $5,400 for the 2018-2019 season.

Josh Schultz, general manager at North Greece BG’s, strongly believes that offering the Sunday Ticket positively impacts the customers —leading to more business for BG’s.

“Our guests have expressed their appreciation to be able to watch all games,” Schultz said. “It allows our customers to watch multiple games at once. The Sunday Ticket grants us access to out-of-market games unavailable through local network affiliates. This definitely helps pull in fans that can’t watch their favorite team.” 

The Sunday Ticket could work as a perfect way for BG’s to lure more customers into its bar. Diluglio and the company think the Sunday Ticket helps them compete with other nearby bars.

“The company decided to purchase the NFL Sunday Ticket to increase business on Sunday,” Diluglio said. “Yes, it was to pull in more fans who would purchase drinks and food while they were watching. We ultimately thought people would not come to our tap room and go to a different location if we did not offer the NFL Sunday Ticket.”

What does the Future have to offer?

The NFL helps generate revenue for Spectrum. Spectrum does not have the same contract rights as DirecTV, restricting the company’s coverage of NFL games.

One of Spectrum’s packages includes the NFL RedZone and NFL Network channels—allowing you to watch Thursday night football and get every play inside the red zone on Sundays. According to Sue Eisenmenger, a sales representative for Spectrum, these channels are bundled into a TV subscription for $104.99 a month.

Matthew McSain, manager of market intelligence for Spectrum, sees a chance for the company to compete with DirecTV for subscribers come 2019.

“The NFL ticket has a huge impact on Spectrum,” he said. “However, it is rumored that the NFL Ticket has a clause with DirecTV that they can opt out of there multi-year contract in 2019. The NFL Ticket could come available by viewing OTT (streaming games over the top, via internet). Thus, not needing a DirecTV satellite dish to get the station.”


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