DirecTV Loses AT&T Safety Net

DirecTV shareholders listening closely might have heard the sound of a door closing.

AT&T's planned acquisition of T-Mobile effectively kills the chance that the telecom company goes after DirecTV anytime soon. Trying to close the deal and then integrating the companies will consume AT&T's attention for the next few years. Some DirecTV shareholders might shrug that off. The satellite firm's stock is up 30% in the past year, thanks to debt-fueled share buybacks and industry-outperforming subscriber growth. It is now trading at 15.6 times Nomura Securities' estimate of 2011 free cash flow per share, a premium to rivals like Dish Network and Time Warner Cable.

But there are some clouds overhanging the stock. Labor discord could force cancellation of this year's NFL season. About two million of DirecTV's 19 million U.S. subscribers pay more than $300 annually for its Sunday Ticket package of NFL games. Without a season, DirecTV could lose some, possibly permanently. It also would have to pay a roughly $1 billion NFL licensing fee anyway: It gets most but not all of that back in subsequent years. Longer term, the maturing of the U.S. pay-TV market will make subscriber growth hard to maintain.