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June 9, 2014

AT&T Inc. is floating the possibility of offering DirecTV's National Football League Sunday Ticket programming to all its wireless phone customers, as the phone giant seeks to convince Wall Street of the strategic value of its $49 billion planned acquisition of the satellite TV firm.

In an analyst meeting in New York on Wednesday, AT&T management highlighted Sunday Ticket as a cornerstone of future product-bundle offerings it can market to its customers, according to analysts who attended the meeting. AT&T executives even suggested it could exempt streaming of NFL games from counting toward subscribers' data limits. AT&T "is looking to use the Sunday Ticket content over mobile devices and expects that it can be a differentiator over the long run to gain incremental market share in both mobile and broadband," Barclays said in a research note. Long offered by DirecTV as a premium service, Sunday Ticket allows customers to watch out-of-market NFL games on Sunday afternoons on their TV sets and if they pay extra, by streaming to their mobile devices.

DirecTV and the NFL are currently negotiating a renewal of the agreement, due to expire at the end of the 2014 football season. AT&T can abandon the DirecTV acquisition if the Sunday Ticket offering isn't renewed, highlighting how valuable the programming is for AT&T. But acquiring DirecTV wouldn't automatically give AT&T the right to sell Sunday Ticket separately to all its wireless customers. DirecTV's mobile streaming rights only cover people paying for the satellite service. And under current deal terms being contemplated between DirecTV and the NFL, AT&T wouldn't have separate or expanded rights for Sunday Ticket, according to people familiar with the NFL's thinking.

A person close to AT&T said that AT&T's management was merely articulating "30,000-foot remarks" about "future bundling possibilities" and wasn't addressing current negotiations between DirecTV and the NFL. Indeed, some of the analysts said they came away with the impression that AT&T was laying out a hypothetical, long-term strategy. Analysts said AT&T was vague about whether it was merely interested in marketing a bundle of DirecTV video offerings and broadband or if it would like to secure the ability to offer Sunday Ticket programming as a stand-alone video offering bundled with wireless data. AT&T management didn't address one way or another whether it was contemplating seeking the rights to offer Sunday Ticket stand-alone to AT&T Wireless customers, according to the person close to AT&T.

Any move by AT&T to extend the NFL offering to its customers would put it on a collision course with its biggest rival, Verizon Communications Inc., which already has the exclusive smartphone streaming rights to football games for Sunday, Monday and Thursday nights. Verizon also can show Sunday afternoon games from customers' home markets on Verizon Wireless phones. - Wall Street Journal

Netflix has had its share of battles of late, including opposing Comcast's proposed takeover of Time Warner Cable and pointing fingers at Verizon for some instances of its streaming video service's being slowed. But the online video titan has also quietly faced restiveness among some of its shareholders.

One matter that Netflix shareholders will vote on at the company's annual meeting on Monday is a proposal by two public pension funds to separate the roles of chairman and chief executive. Both are held by Reed Hastings, Netflix's co-founder. It is one of several corporate governance items on the agenda, with others including a proposal to put all board members up for re-election every year, rather than every three years.

But the request for an independent board chairman is perhaps the most notable. Its backers are Calpers, the giant California public pension fund, and Scott M. Stringer, New York City's comptroller and the overseer of the city's pension funds. And it has received the backing of the two big proxy advisory firms, Institutional Shareholder Services and Glass, Lewis & Company. The idea, first proposed by Mr. Stringer, has proved popular among shareholders. More than 73 percent of Netflix shares were voted in favor of last year's iteration, the highest-ever approval level for an independent chairman proposal, according to I.S.S. Yet that prompted no policy change from the company.

To press their case this year, Mr. Stringer and Calpers are expected to vote their shares - just over 350,000, though out of an estimated 60 million shares outstanding - against the three directors up for election this year. That group happens to include Mr. Hastings. Both I.S.S. and Glass, Lewis have recommended that investors withhold their votes for the directors as well. "A board that ignores its shareholders is a house of cards," Mr. Stringer said in a telephone interview, coyly alluding to the popular original series that has been a big part of Netflix's recent success.

Separating the two roles has become a popular corporate governance issue, with companies including JPMorgan Chase and the retailer Abercrombie & Fitch facing pressure to do so in recent years. Dividing the two, proponents say, increases the independence of the board and reduces the influence of management. Netflix currently has an independent lead director, though that position is not elected only by the company's other independent board members. In its report, I.S.S. notes Netflix's argument for its current governance model: that a "one size fits all" strategy is inappropriate.

The board has also argued that Mr. Hastings has been both chairman and chief executive since the company went public, a situation that has served it well. The company has one important indicator in its favor. Shares in Netflix have risen 95 percent over the last 12 months, closing on Friday at $430.13. But Mr. Stringer said that in some ways, his fight is about principle. "We want to make sure the company is operating at the highest possible level," he said. "An ounce of prevention is worth a pound of cure." New York Times

Philadelphia and five other cities submitted proposals to host the party's 2016 national convention, the Democratic National Committee chair said Saturday. Rep. Debbie Wasserman Schultz (D., Fla.) said that Birmingham, Ala.; Cleveland; Columbus, Ohio; New York; Philadelphia, and Phoenix had put in bids by Friday's deadline. "We're thrilled with all the fantastic options that we have going into the next cycle," she said. The contenders include cities familiar with holding large conventions and unconventional picks. Fifteen cities had been invited to submit proposals. Cleveland also is bidding for the Republican convention.

Mark McDonald, press secretary for Mayor Nutter, said Saturday that "while we were not certain of the entire field, we were aware of most of them." McDonald cited comments Nutter made Friday describing Philadelphia's assets and its record of holding large events. In 2000, Philadelphia hosted the Republican convention. Next year, the Catholic Church's World Meeting of Families could bring two people million here. The national Democratic organization said that in the coming months, an advisory committee will visit the competing cities. The winner will be announced late this year or early 2015. Philadelphia Inquirer; Pittsburgh withdraws bid for Dem convention in Tribune-Review

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