) dumped GolTV as the latter lost telecast rights to Spain's most
popular La Liga football league.
GolTV is a specialized American TV sports channel, which
broadcasts mainly soccer matches in both English and Spanish
Over the past seven seasons of La Liga football league, GolTV
has held the network rights, previously held by Fox network. The
company has sublicensed the rights of some games to ESPN Deportes
From the last month onwards, DIRECTV included the Al
Jazeera-owned network called beIN Sport, which acquired the U.S.
rights to La Liga, Italy's Serie A and France's Ligue 1. Hence, the
drop of GolTV from DIRECTV's Sports Pack from yesterday onwards
will allow the company to reduce its mounting programming
Few days back, DIRECTV had a lot of tussle over price hike with
), following which the former renewed its contract terms with the
network company at a 20% higher rate, which we believe will
certainly dampen its bottom-line growth in the upcoming
Another similar situation has evolved as DIRECTV's contract
) is about to expire in the next three days. News Corp. is
demanding a 40% increase in fees. Subsequently, we believe that if
DIRECTV renews its contract with News Corp. at a higher rate then
it will result in further decline in the company's bottom line.
Moreover, DIRECTV's chance of transferring that cost to its
subscribers is limited due to increased competition from other
cable and telecom operators coupled with deteriorating U.S.
So, in order to offset such increased programming cost, the
company should upgrade its customer base by selling premium
services, including the disposition of VOD, HD and DVR services to
its customers will thereby foster ARPU growth in the coming
We maintain our long-term Neutral recommendation on DIRECTV.
Currently, DIRECTV has a Zacks#3 Rank, implying a short-term Hold
rating on the stock.
DIRECTV (DTV): Free Stock Analysis Report
NEWS CORP INC-A (NWSA): Free Stock Analysis
VIACOM INC-B (VIAB): Free Stock Analysis Report
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