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AT&T has agreed to a merger with satellite TV provider DirecTV in a deal worth $48.5 billion, but the deal came with a few major stipulations. One of the most glaring: AT&T will be able to get out of the deal if DirecTV loses its very popular NFL Sunday Ticket content agreement, according to the SEC document filed along with the merger announcement yesterday.
NFL Sunday Ticket provides DirecTV customers with access to a ton of game coverage during the regular football season, which means you’ll never have to miss a game just because your local broadcast affiliate decided not to show your favorite team.
“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, but the Company will not have a damages claim arising out of such failure so long as DIRECTV used its reasonable best efforts to obtain such renewal,” the SEC document states.
That means that while AT&T has the option to get out of the merger if the NFL content deal isn’t renewed, it won’t be able to collect damages for the time and resources spent trying to make the merger happen.
I’m not entirely sure AT&T would want to exercise its right to end the DirecTV merger should the NFL decide not to renew. The deal offers AT&T plenty of advantages — namely the ability to bundle a nationwide TV service along with its wireless services. (Such a move could finally make DirecTV a real competitor with cable TV services, too.)
This wouldn’t be the first time AT&T has agreed to a unique set of terms when negotiating a gigantic merger. Years ago the company agreed to pay a hefty sum and release a portion of its wireless spectrum if its deal to merge with T-Mobile didn’t go through.
AT&T is bringing it all together, from revolutionary smartphones to next-generation TV services and sophisticated solutions for multi-national businesses. For more than a century, they have provided innovative, reliable, high-quality p... read more »
DIRECTV (DTV) is the world's leading provider of digital television entertainment services. Through its subsidiaries & affiliated companies in the United States, Brazil, Mexico & other countries in Latin America, DIRECTV provides digit... read more »
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