DIRECTV once again paying big money for the premium sports product in America today- the NFL Sunday Ticket.

In an announcement today, the NFL and DIRECTV confirmed they have reached a deal to extend the current NFL Sunday Ticket contract through the year 2014.  The massive price tag on the deal?  A reported $1 billion dollars annually, up from the current $700 million per year that DIRECTV pays the NFL.

While the contract will provide a few alternative channels for subscribers to other pay television channels, the main Sunday Ticket package will remain a DIRECTV exclusive.That no doubt will enrage customers of Comcast, Time Warner, DISH Network and other cable TV companies who will continue to be locked out of the package unless they switch to DIRECTV.

The one piece of the NFL Sunday Ticket that will be available to cable TV and DISH Network customers is the “Red Zone” channel.The Red Zone channel jumps from game to game, generally when one team is in the red zone and about to score.No word yet on what the Red Zone channel will cost for new subscribers.

Another piece that the NFL offered up to DIRECTV is the online rights to all NFL games.While the NFL streamed some games for free to fans via its website last year, one complaint from fans is that not all games were made available.DIRECTV promised fans will have online access to streaming, even if they don’t have the NFL Sunday Ticket package on satellite TV, by the year 2012.Hopefully it won’t actually take three years to put NFL Sunday Ticket online into action.

DIRECTV customers who subscribe to NFL Sunday Ticket and the Superfan package will again receive all Sunday games in HD.Included in the package are the Game Mix channel, the Red Zone channel, and the SUPERCAST service which will deliver all of the games to a computer via broadband connection.Unfortunately, nothing has been released to indicate that DIRECTV will roll the Superfan package into the main NFL Sunday Ticket, meaning customers will still be paying extra for games in HD.That will continue to be a sticking point with many DIRECTV HD customers, who already pay and additional $10 per month for HD service.

DIRECTV and the NFL also announced an extension of the carriage agreement for the NFL Network. The all football all the time station will continue to be available to DIRECTV subscribers of the Choice package or higher.

The move by DIRECTV indicates they are confident that the NFL will continue to bring in subscribers.While DIRECTV may not make back what they pay the NFL on Sunday Ticket package sales, they certainly are making money in the long run by growing their subscriber base which continues to generate huge amounts of cash year in and year out.

Other pay television providers have to be fuming that they will once again be locked out from the NFL cash cow.Comcast in particular has battled the NFL in recent years, mainly over carriage of the NFL Network, and DISH Network too has been battling in court with the NFL.Newcomers like Verizion FIOS and AT&T U-Verse will also be locked out of the full NFL Sunday Ticket package, being restricted to the Red Zone channel offering.  While the NFL may have made more money by distributing the Sunday Ticket package to a wider network, they obviously feel happy with what they make with DIRECTV.

Commenting on the deal, NFL commissioner Roger Goodell said:

“We are pleased to extend a partnership with DIRECTV that has complemented and supported our broadcast television packages for 15 years.We are looking forward to having the Red Zone channel on cable and other media platforms as well as showing NFL Sunday Ticket via broadband to the homes that cannot get satellite. This new content enhances our tradition of being the most pro-consumer, widely available sport on television.”

DIRECTV CEO Chase Carey seemed happy as well:

“The NFL SUNDAY TICKET service has been a part of DIRECTV since our first year of operation and is one of the defining characteristics of our best-in-class positioning. This latest extension allows us to retain and broaden our most popular sports subscription service. Through our wireless offering to NFL SUNDAY TICKET™ customers and the new broadband service to non-customers, we’re now able to expand the reach to even more NFL fans everywhere.”

DIRECTV or Dish? American consumers are still picking DIRECTV in greater numbers.  DIRECTV and Dish recently reported their earnings for the third quarter, and once again DIRECTV execs are smiling, while the higher ups at Dish have to be worried.

For the three months ending on September 30^th, 2008 DIRECTV added 156,000 net subscribers for the quarter. Overall, DIRECTV now has about 17.3 million subscribers in the United States. For the third quarter, Dish Network lost 10,000 subscribers. Overall, they now claim 13.8 million subscribers.

DIRECTV’s numbers were disappointing from the 2007 perspective. During the third quarter of ’07, DIRECTV added about 240,000 new customers, so this year’s number represented about a 35% drop. DIRECTV CEO Chase Carey remained upbeat, saying this was not due to the economy, but rather the loss of AT&T as a resale partner in the former Bell South territory.

DIRECTV will once again enjoy a partnership with AT&T starting in February 2009, offering the latest DIRECTV deals. AT&T currently sells Dish Network service as the third piece of a triple play offering, but only in neighborhoods where its own AT&T U-verse service is not available. While a potential AT&T-Dish Network marriage was a hot topic this time last year, it now looks to be completely dead.

Overall, the results show an uphill battle for Dish Network vs DIRECTV. While Dish has finally leveled the playing field with DIRECTV when it comes to HD, they have fallen far behind in subscribers. When potential subscribers now consider whether to go with DIRECTV or Dish TV, they often think about which company has more of a presence. DIRECTV advertisements are constantly playing, while Dish Network’s seem to be few and far between. I recently noticed Dish Network running ads for several weeks for their Turbo HD service, but those have too disappeared.

DIRECTV will have bundling agreements with all three major local telcos in 2009, the aforementioned AT&T, as well as Verizon and Qwest. Verizon has a similar resale agreement, where their Verizon FiOS service isn’t deployed, they offer DIRECTV as a video alternative. These too give Direct TV a leg up when the local phone company is suggesting DIRECTV with combined billing over Dish.

Overall, things continue to look up for DIRECTV over Dish Network. The year ahead will be an extremely challenging one as both companies look to build their subscriber base in an environment where consumers are cutting costs.

Speculation once began swirling about a possible DISH Network-DIRECTV merger last week, this time due to a report in the Wall Street Journal.

According to the Journal, DISH Network CEO Charlie Ergen stated that he is interested in restarting merger talks with competitor DIRECTV. Coincidentally, or maybe not, DISH Network’s stock had been hammered the day before due to a lackluster earnings report. The stock bounced back after the report, and is now hovering around the $30 mark, nearly the same price as before the report.

DIRECTV for its part, has basically laughed at the proposition. DIRECTV CEO Chase Carey was candid in comments recently, “In terms of the merger with EchoStar, we really have nothing new to say, I don’t know whether The Journal needed to fill a page or what, but I have nothing. There’s really nothing.”

Better than most corporate double speak, and fairly close to a straight up denial. Liberty Media chairman John Malone, the parent of DIRECTV also shrugged off speculation, blaming the regulatory environment. Malone said the deal would certainly be “synergistic” if it were doable, but doesn’t feel much has changed since the last time DISH Network and DIRECTV tried to merge in 2002. Synergistic being the corporate code word for saving lots of money by laying off thousands of employees by combining the companies. That deal fell through when both the FCC and the Justice Department ruled the deal anti-competitive.

While some have speculated that a possible satellite TV merger may be possible now due to the recent marriage of XM Radio and Sirius, its more of an apples and oranges comparison.

Satellite radio is a niche market, with less than 10% penetration as far as subscribers in the United States. Pay television has a much higher penetration rate, between 75 and 85 percent of all households have some sort of cable, satellite or telco TV service. For most in rural America, satellite TV is the only choice. Any combination of DIRECTV and DISH Network would create a monopoly across a huge segment of the population. This would subject the combined company to a huge amount of governmental regulation, as least in the rural areas they serve.

So while DISH Network may be begging for a buyout or merger, they would be better off looking to AT&T in hopes of striking any sort of deal, as nothing will be happening soon with DIRECTV.

DIRECTV reported their quarterly results last week, and it was business as usual for the company, which continued to add subscribers despite the slowdown in the US economy.

For the second quarter 2008, which covers the months of April through June, DIRECTV added 129,000 new subscribers. Analysts predicted the satellite TV Company would add 122,000 subscribers, while the company added 128,000 in the same quarter 2007.

The second quarter is traditionally the slowest quarter for new additions for satellite television providers DISH Network and DIRECTV. DISH Network also reported earnings last week, and actually lost 25,000 subscribers during the last quarter.

DIRECTV continues to impress in the area of customer churn. Their customer losses were reduced to 1.49 percent versus 1.58 a year ago. DISH Network has struggled with their churn number, as it increased to nearly 2 percent during the most recent quarter. A number of factors have contributed to DIRECTV’s low churn rate, high among them their strong penetration in the advanced services area. These services, which include DVR and HD or high definition programming, hook customers as they enjoy the feature rich technology.

DIRECTV’s average revenue per subscriber, or ARPU increased as well to $81.80 a jump of 7% over last year’s number. The third quarter ARPU number should be interesting, as this is when subscribers pay up for the privilege of watching wall to wall NFL coverage with the Sunday Ticket package. Average revenue for those subscribing to advanced services like DVR’s or HD was over $100 a month.

Overall, it is quite remarkable that DIRECTV has been able to continue to add subscribers against strong competition from cable and Telco companies. Verizon FiOS and AT&T U-verse television services continue to expand, and Comcast and Time Warner have finally begun to up their HD offerings, while at the same time offering triple play bundles of voice, video, and high speed internet.

DIRECTV CEO Chase Carey continued to promote DIRECTV as the HD leader, downplaying DISH Network’s recent HD expansion. Carey said they have a position of leadership due to DIRECTV “being their first.”

The satellite TV battle between DISH Network and Direct TV was stepped up another notch today, as DISH Network said they will have 150 HD channels by year-end 2008.

DISH Network seems to be in an all-out attack on the HD front.  While this is certainly good for consumers craving more HD content, it seems DISH has started to really stretch the truth to put it mildly in their attempt to outdo Direct TV.  More on that later.

First the news on DISH Network’s latest expansion.  After previously promising 17 additional HD channels in Mid-July, which will be added August 1^st, DISH Network today announced they would be expanding to 150 national HD channels by year-end.

DISH Network recently enjoyed a successful satellite launch, as the Echostar 11 will soon become operational and will allow DISH Network to expand its HD offerings.

The latest announcement comes on the heels of the Direct TV announcement that they will expand to 130 HD channels in mid-August.  That proclamation, along with their statement that they will soon have capacity for 150 HD channels took the shine of DISH Network’s 100 channel announcement.

DISH Network initially took the lead in HD programming in late 2006 and into 2007, but dropped the ball after that.  Direct TV expanded their HD content through the end of 2007, leaving DISH far behind.  Charlie Ergen, DISH Network CEO admitted as much on conference calls with Wall Street analysts, praising DirecTV for their execution in the HD market.  After about a year of extremely low subscriber growth, DISH Network is fighting back hard.

DirecTV has pushed both cable companies and DISH Network around in the HD marketplace.  But with DISH Network’s recent announcement of their Turbo HD packages, and their expansion of HD service, it looks like they have finally decided to follow the same path as DirecTV.  Rather than position their offerings as a value oriented television provider, DISH Network is moving toward the position as a premium provider.

The strategy has worked well for Direct TV.  Under the leadership of CEO Chase Carey, Direct TV has reduced customer churn and improved revenue per subscriber numbers, all while the US economy has entered a soft spot.  The latest foray by DISH Network shows they intend to start down the same path.

In conjunction with their Turbo HD packages, DISH Network is also extensively promoting its move to deploy HD content in the highest resolution possible.  DISH claims that via a new “proprietary system upgrade” set-top HD DVR devices will now display content in higher resolution.  Customers with MPEG-4 HD DVR receivers will be able to display HD content in 1080p, the highest resolution possible for 1080p compatible HDTV sets.  Sounds like a lot of technical mumbo jumbo, we will have to wait to see how it looks to see if what DISH Network is promising makes any real difference.

Earlier I mentioned how DISH Network is really starting to stretch the truth (fib or lie anyone?) is being promoted in this press release.  Their latest, recapping all of their HD moves, says they now have 114 national HD channels.  Their previous release announced they would have 100 HD channels.  Where did the 14 additional channels come from?

According to tvpredictions.com, DISH Network is now claiming their video-on-demand channels available in HD as channels.  Fairly ridiculous and creeping up on the fibbing scale close to Comcast’s claim earlier this year that they are the leader in HD because they will have “1000 HD Choices.”

DIRECTV certainly showed (and paid) CEO Chase Carey the money in 2007.

Carey’s compensation package topped out at an eye-popping $26.4 million dollars last year, a four-fold increase over his 2006 compensation package. All of the details were released in this SEC filing. The filing was part of DIRECTV’s announcement of their upcoming annual stockholders meeting. This year’s shareholder meeting will be held on June 3^rd in New York City.

Carey’s base salary for 2007 was $2.2 million, and his incentive pay was $4.2 million. Where Carey really hit the jackpot was in the form of stock and option payments based on the satellite TV Company’s performance over the past few years. Carey garnered $19.6 million in this area to bring his total over the $26 million mark.

To be fair, Carey’s stock and option grant was based on several years’ performance as CEO. In 2006, Carey took home $6.5 million total, $2.1 in base salary, and $4 million in incentive/bonus pay. No stock or option compensation was paid in 2006.

Although Carey earned the incentive pay over several years, it was actually paid in 2007. Breaking a CEO’s pay down is always fun, so here goes for Carey.

Chase Carey earned:

$2,200,000 per month in 2007

$507,692 per week

$105,600 per day (based on 250 work days)

$73,328 per day (based on 365 days in the year)

$3,013 per hour (based on all 8,760 hours in the year)

$50.23 per minute (based on all 525,600 minutes in the year)

and finally

$.87 per second (based on all 31,536,000 seconds in the year)

As the old saying goes, “Not bad work if you can find it!”