The deal came together days before the end of DirecTV’s previous pact with Fox. It also was handled with no saber-rattling or public bickering over terms, a notable achievement at a time of heightened competition and business headwinds between large programmers and distributors. DirecTV is facing a number of big renegotiations with major content providers in the coming year, including Viacom. It’s understood that the AT&T-Fox talks were long, arduous and tense at times but were never in danger of boiling over in public.
Fox is awaiting its takeover by Disney early next year. The multi-year deal covers a mix of 21st Century Fox assets that will be sold to Disney — including FX Networks and National Geographic — and those that will stay behind with the Murdochs’ new spin on Fox, including Fox Sports 1 and 2 and the 28 O&O stations reaching 17 major markets. AT&T gets live, on demand and streaming rights for DirecTV, the DirecTV Now OTT service and the dwindling U-verse telco service. AT&T has been de-emphasizing U-verse since it acquired DirecTV in 2015.
Fox News is the not covered in the new deal. AT&T already has a long-term deal with cable news powerhouse which in the past had negotiated most carriage deals separately from its Fox sibling cablers.
“We are pleased to have closed a multi-year deal with Fox for their entire array of content. Our customers will continue to enjoy their programming live and on-demand on all their devices, both at home and on-the-go,” said Daniel York, chief content officer and senior exec VP for AT&T Communications. “Fox has worked with us in this deal to deliver more choice for consumers and better value to AT&T customers.”
AT&T may hope to send a message to other programmers by navigating a no-fireworks negotiation with Fox Networks Group. Fox has not been shy about going into PR battles with other MVPDs, including Comcast and Altice, in recent months.
At the same time, DirecTV’s behavior with rival programmers is under scrutiny as it absorbs Time Warner after the hard-fought merger battle in Washington, and a pending appeal by the government. AT&T is also under pressure from investors to deliver growth to justify its $85.4 billion Time Warner acquisition, which was completed in June. All of this comes at a time when DirecTV’s subscriber base is slowly but steadily shrinking. The satcaster has about 25 million video subscribers in the U.S. and Latin America; it shed 359,000 video subs in the third quarter, the company reported in October.
“We’re pleased to expand our partnership with AT&T through this wide-ranging agreement which ensures that our top-rated entertainment and sports programming will remain broadly available to DirecTV, DirecTV Now and U-verse customers for the foreseeable future,” said Mike Biard, Fox Network Group president of distribution.