- The Washington Times - Friday, December 22, 2006

Media baron Rupert Murdoch today agreed to sell his control of DirecTV to LIberty Media in exchange for the $11 billion stake that Liberty Media had in Murdoch’s News Corp. On the surface, it just seems like some corporate shuffling, but the reality is the maneuver could have some implications on the world of sports.

In the deal, Liberty Media gets control of three regional sports networks, including Fox SportsNet Pittsburgh, Fox SportsNet Northwest and Fox SportsNet Rocky Mountain. Now remember: Liberty Media is also in talks to buy the Atlanta Braves. So when all is said and done, the company could have have three sports networks, a Major League Baseball team and the leading satellite provider, which has the exclusive rights to the NFL Sunday Ticket. That makes Liberty Media a pretty prominent player in the sports world, with leverage to do even more if it wants to.

I’m most curious, however, as to how this affects the future of the Big Ten Network. Fox owns about 49 percent of the network, and agreed to put the network on the most broadly distributed tier of its DirecTV systems beginning next year. It is widely believed the Big Ten partnered with Fox at least in part to land that distribution deal.

It will be interesting to see whether Liberty Media keeps the Big Ten Network on DirecTV’s basic tier, or whether it eventually fights to shift the network to a sports tier.

It’s also worth exploring what Liberty Media does with the NFL Sunday Ticket, a popular premium satellite package that allows fans to see every out-of-market NFL game. DirectTV recently agreed to pay $700 million per year through 2010 for the exclusive rights to the package.

But the package is viewed by most people in the industry as a “loss leader,” meaning that the company makes no money off the package specifically, but believes it gains the money back in the form of increased subscribers.

With the cost of the NFL Sunday Ticket likely topping $1 billion per year next time around, Liberty Media may take a more conservative approach and back out of bidding for the package again.

It may be years before this all shakes out, but don’t expect the status quo.



Click to Read More

Click to Hide