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Could an AT&T Deal with DIRECTV Finally Deliver the Pac-12 Network?

by Jack Berkins on April 2, 2015

Is an agreement amongst all three coming soon?Is an agreement amongst all three coming soon?[/caption]Ever since the Pac-12 Network officially launched in 2012, DIRECTV subscribers and college fans (especially those on the west coast) have been left out in the cold. The root of the problem stems from the per-subscriber fees. License disagreements are all-to-common these days, and, for the most post, difficult to gauge if/when they’ll be resolved. Well, at least for Pac-12 fans, things might be looking up. Last year, AT&T put in a bid to acquire DIRECTV and, if it goes through, it’s almost a certainty they’ll add the Pac-12 Network to DIRECTV’s lineup (AT&T has a long-standing relationship with the PAC-12). The only road block? The acquisition is being reviewed by regulators to make certain antitrust issues aren’t in play. Let’s cover the potential outcomes in a bit more detail…

Regulatory Approval

Anytime regulators are involved in an anti-trust review, you can bet it won’t be a quick and easy process. At contention is whether the new, larger company could unfairly control the market. Considering AT&T isn’t a satellite provider (and their U-verse has a small, but growing share of the TV consumer market), there’s really very little overlap between the two companies. Only time well tell if regulators agree, but chances are it goes through by mid/late 2015.

Impact on Pac-12 Network and DIRECTV

For college fans and DIRECTV subscribers on the west coast, it’s been tough watching other major collegiate networks (SEC Network, etc) successfully license their programming with all the major providers, including DIRECTV. If/when the takeover happens, AT&T’s next step would be to negotiate carriage fees for the ~4M DIRECTV households inside Pac-12 territory. U-verse currently pays $0.80 per-subscriber, as does Comcast cable and Time Warner, so worse case, that’s likely the price DIRECTV will pay. Of course, a combined DIRECTV/AT&T enterprise would have a bit more negotiating power so that rate might end up dipping into the $0.70s.

Which plans are in play and for how much?

Plan-wise, if the Big Ten and SEC Network are any indication, the Pac-12 Network will probably get added to DIRECTV’s Choice package ($29.99/mo) and up. More importantly, will your bill be going up? Since the per-subscriber fees for the Pac-12 are relatively low (compared to SEC/Big 10), we don’t expect those fees to work their way down to the monthly rates. Of course, that decision might ultimately be made by AT&T, so keep an eye out.
What if you’re not a DIRECTV subscriber? As you’ve probably noticed, on demand (streaming when/where you want), is making huge strides these days, and all these new sports networks could eventually make their way to those outlets. For example, if you JUST want the Pac-12 Network (even without a DIRECTV subscription), you could eventually get it for a small monthly fee or even per-event charge (think Netflix for special events). That sort of strategy/infrastructure is still in the testing phase for most cable and satellite providers, but we expect a significant launch in that space sometime in early 2016.

Bottom line

If you’re a USC, Cal, Oregon, etc. fan and have DIRECTV, hold tight, things are likely to get better. And soon. Even if the AT&T deal falls through, negotiations are at a tipping for all parties involved and there’s a high probability a deal (even on a trial/annual basis) get consummated soon. Go Bears! 🙂

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