DirecTV Signs Lucrative NFL Extension

EchoStar Communications (DISH Quote - Cramer on DISH - Stock Picks) and Hughes Electronics (GMH Quote - Cramer on GMH - Stock Picks) may have junked their merger, but their separate dealmaking continues apace.

On Wednesday, Hughes reached a five-year extension of a key National Football League programming deal, an exclusive package of games that has been a major draw for Hughes' DirecTV direct broadcast satellite service. The company said the agreement includes the launch of a yearround, 24-hour-a-day NFL Channel that will be "fully dedicated to the NFL and the sport of football."

Meanwhile, speculation is growing that EchoStar will reach a deal to buy back a stake that it sold to Vivendi Universal (V Quote - Cramer on V - Stock Picks) only 11 months ago. On Wednesday, Hughes shares slipped 15 cents to $10.90, while EchoStar's rose 4 cents to $21.23.

Harry Kalas

In a move that cements Hughes' bond with obsessive football fans, DirecTV will be offering its exhaustive Sunday Ticket broadcasts of NFL games through the 2007 season. The agreement, extending one that expires at the end of the current season, locks out EchoStar for the full five-year term of the deal, and prevents the NFL from offering a similar programming package through cable operators until 2006 at the earliest. Terms weren't disclosed.

The new deal, which Satellite Business News said could be worth more than $2 billion in guaranteed rights payments, continues DirecTV's near-decadelong role as the only place for NFL fans to go to get complete access of all televised pro football games each weekend. About 1.5 million homes, amounting to more than 13% of DirecTV's roughly 11 million subscribers, subscribe to the Sunday Ticket service.

EchoStar and cable operators had been seen as challenging Hughes' exclusivity, but EchoStar chief Charlie Ergen, for one, has recently complained about the money the NFL has been asking for the rights.

Harry Potter

Meanwhile, EchoStar is seen by some as the likeliest buyer for the 10% stake in EchoStar that Vivendi, under acquisition-hungry former CEO Jean-Marie Messier, bought for $1.5 billion in January.

« Previous Page

1 2

Next Page »