By Ronald Grover and Liana B. Baker
(Reuters) – The National Football League and DirecTV have agreed on a framework for negotiations to renew the satellite TV operator’s contract to offer the popular NFL Sunday Ticket football package the company uses to attract subscribers, according to two sources with knowledge of the talks.
The two sides “are still in material negotiations,” but extended their exclusive negotiating period to work through the remaining issues, according to one of the people. The talks might still not result in an agreement.
A contract that renews DirecTV’s exclusive deal would give the satellite operator a key marketing advantage over cable operators. Cable companies sought a deal in 2009, but DirecTV ended up renewing its agreement with the NFL for four years.
The current DirecTV offer allows subscribers to watch football games outside of their local markets on Sundays. The exclusive package, which costs subscribers up to $300 a year, is an important tool for DirecTV to attract subscribers and the company has said about 2 million people receive the service.
Investors and analysts have been watching closely to see whether DirecTV would renew the Sunday Ticket contract with the NFL, estimated to be worth $1 billion annually. The current agreement is due to expire at the end of the 2014-15 season, meaning there is one year left to go under the previous terms.
“We don’t comment on speculation,” DirecTV spokesman Darris Gringeri said. Alex Riethmiller, the NFL’s vice-president for communications, said “we are still in negotiations.”
Any agreement still needs approval by DirecTV’s board of directors and the NFL team owners, said the people, and will not be announced until the first or second quarter of 2014. In 2009, the owners announced the contract extension at the NFL annual meeting.
DirecTV CEO Mike White said at the company’s investor day on Thursday that, “we’ve had very constructive conversations with the NFL but it’s complex. I’m very optimistic we will get an exclusive deal done on NFL Sunday Ticket.”