NFL controversy creates dilemma for DirecTV, other companies that depend on pro football

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DirecTV is reportedly allowing customers to get refunds when they cancel their Sunday Ticket package if they cite players protesting during the national anthem as the reason for ending the service. Time_Sports

DirecTV’s practice of giving refunds to some NFL Sunday Ticket subscribers upset about players kneeling during the national anthem puts the company at risk of looking as if it’s taking President Trump’s side in the controversy. 

The satellite TV service, owned by AT&T, has been the exclusive provider for the NFL Sunday Ticket since 1994. But some NFL fans who subscribed to the $280 per season programming package, which lets viewers watch any game around the league, have contacted DirecTV seeking a refund in response to the NFL players’ protests. DirecTV does not disclose its Sunday Ticket subscriber numbers, but Bloomberg has estimated as many as 10% of the satellite TV provider’s 20.8 million customers subscribe to it. 

Last week, Trump criticized the growing protests, saying NFL owners should fire players who do not stand during the national anthem played before kickoff. The protest began last season by then-San Francisco 49ers quarterback Colin Kaepernick to bring attention to the oppression of black people by the criminal justice system. His supporters say teams have refused to sign Kaepernick because of his protest. 

The stakes are high. Keeping long-term customers happy is important because subscribers to Sunday Ticket and premium sports programming are highly valued in a marketplace where many consumers are leaving traditional pay-TV services and moving to streaming options such as Netflix and Hulu. 

DirecTV must “get a grip on this now in order to avoid significant long-term losses,” said Michael Greeson, president and principal analyst for The Diffusion Group, a research firm in Plano, Texas. “Politically this could be interpreted as DirecTV agreeing with Trump that the issue will ultimately be determined by the fans and their wallets.”

This season, Kaepernick remains unsigned and more players began kneeling during the anthem in support. In the preseason, a protest initiated by people in the black community included a boycott of NFL games in support of Kaepernick, too. Celebrities such as artist and producer Sean Combs, actor Ed Asner and comedian and talk show host Ellen DeGeneres have expressed their support of the protesting players on social media.

Essentially the pay-TV giant is caught between two groups of football fans — those who support Kaepernick and the reasons for his protest and those who don’t.

And the issue can continue to escalate for the league and its advertisers, too. “It is a very volatile and tricky place for the NFL … no matter what they do they are going to offend a group of users,” said Allen Adamson, a branding expert and founder of Brand Simple Consulting, a New York-based consulting firm.

And consumers on either side could opt to not attend or watch games, cut premium NFL channels from their pay-TV services and not buy NFL gear, he said. Some have documented their burning of team jerseys, hats and even season tickets on social media. “This is an incredibly raw and emotional issue on both sides,” Adamson said.

During this past week’s NFL games more than 250 players knelt during the national anthem at their respective games. Afterward, some DirecTV customers who subscribe to the Sunday Ticket package began contacting the company seeking to cancel and get a refund.

“I am tired of all of the protesting,” said Renee Iaia, a longtime Los Angeles Rams fan and DirecTV customer for 25 years who said she called and was able to get a refund on her Sunday Ticket subscription. “I watch sports and especially football to relax and get away from all of the world strife.”

DirecTV has historically shunned refunds for NFL Sunday Ticket once the season gets underway. But the TV service is giving at least some customers a refund if they mention the ongoing protests, according to a person familiar with the refund process who is not authorized to speak publicly. The Wall Street Journal first reported the issue.

AT&T, which acquired DirecTV three years ago for $48.5 billion, declined comment for this story. At the time, the telecom giant made the merger contingent on DirecTV’s exclusive rights to the NFL package; its deal, which runs through the 2022 season, is worth $1.5 billion annually. If many customers cancel, it could hurt AT&T’s revenue and the NFL, which has suffered a decline in ratings over the past few seasons.

Most likely, DirecTV is honoring the request for only its highest-paying and long-time customers, said Phil Swann, who covers the TV industry on his TVAnswerman.com website. 

“I don’t think (the refunds) will be overwhelming, but subsequent events might increase that number,” he said. “It depends on what the NFL does and what the players do. If this escalates and becomes a more contentious issue then maybe more people will do this.”

If the anti-NFL movement gains momentum, other pay-TV subscribers could ask their provider for refunds to downgrade their programming packages to punt premium channels such as the NFL RedZone channel, which provides real-time updates of NFL games, and the NFL Network, which carries broadcasts of NFL games.

“All NFL conduits … are susceptible,” Greeson said.

Most pay-TV providers, when contacted about that potential, declined or did not return requests for comment. However, Cox Communications said it had not received “very many calls” as of Wednesday afternoon.

Follow USA TODAY reporters A.J. Perez and Mike Snider on Twitter: @byajperez & @MikeSnider.

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