The New York Times is reporting that Rupert Murdoch and John C. Malone have agreed on a settlement of their corporate feud. Murdoch will buy out Malone's stake in News Corp. in exchange for a package that will include cash and Murdoch's controlling stake of satellite television company DirecTV. The Times values the deal at $11 billion.

Check Dealscape for an M&A slant on the news, I'm going to focus on what this could mean for DirecTV. In a nutshell, it could be a disaster. DirecTV's company line is that it offers high-quality television service to rural areas, but the real value of the service, at least in the U.S., is its exclusive rights to broadcast out-of-market NFL games.

If you take broadcast content out of the equation, digital cable blows satellite out of the water for a number of reasons, namely: on-demand programming and bundling phone and data with television. Personally, I'd be getting my television from Time Warner if not for the NFL package. It's always been an oddity that the NFL package was exclusive to DirecTV while baseball and basketball packages have been offered by cable companies as well. Could it have had something to do with the outlandish price Rupert Murdoch was paying for NFL broadcast rights for his Fox television network? Perhaps, although there's no proof of that. Will Malone be able to renegotiate the exclusivity deal, or will the NFL package be offered on cable television as well in the future? Only time will tell, but if DirecTV loses that exclusivity it could mean a drop in subscriber numbers, probably not a precipitous drop, more of a slow leak as they flee to digital cable. — Brian Ward

Go to story from The New York Times

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