Dodgers Could Be Last Team To Strike Gold With Local TV Deal

It seems everyone is writing about the sports programming bubble, wondering whether it’s here and when it will burst. Just Google “sports TV bubble” and you’ll find this story from the New York Times in January, and these from FOX and ESPN in March. But it’s not just this year. Forbes warned of a sports TV bubble in late 2011 and followed up in early 2013 declaring that the bubble existed and was about to pop.

What is the sports TV bubble anyway? It’s the hyper-inflated prices sports networks, cable and satellite companies, and consumers pay to produce, show, and watch live sporting events. Live sports means no fast-forwarding through commercials on the DVR. Advertisers pump gobs of money into the system to place their products in front of an engaged 18- to-35-year-old male audience.  Target consumers are valuable. They make sports programming valuable. Networks pay billions to broadcast sports to those consumers but everyone — not just sports fans — foot the bill.

How did we get here? I touched on these issues in this post in May, when Senator John McCain introduced a bill that would eliminate regulatory barriers to a la carte programming by cable and satellite companies:


Here’s the example Senator McCain used: Disney owns ABC, Disney Network and ESPN. If a cable or satellite operator wants to offer ESPN to its customers, it must purchase and pay for all Disney-related programming, and vice versa. The cable or satellite company then has no choice but to offer ESPN and Disney Network as a bundle, even if some customers only want ESPN and others only want Disney. McCain’s proposed legislation would change that.

ESPN charges cable and satellite companies $4.69 each month to carry the network. When some consumers want ESPN and others want Disney, the cable or satellite company has no choice but to pay the $4.69 for ESPN and whatever the carriage fee is for Disney, and pass those costs onto their customers. If a la carte programming takes hold, then cable and satellite companies will purchase ESPN only for those customers who want the World Wide Leader. That means less money to ESPN in the short term. And it may force ESPN to raise its industry-leading carriage fee even higher. That may cause additional consumers to fall away, based on cost. In other words, unbundled programming will test how elastic the demand is for ESPN and other sports networks.

Without a la carte programming, consumers who want any cable or satellite programming are forced to pay for channels they don’t want at ever increasing prices. Patrick Hruby summed it up well several weeks ago at Sports on Earth.

This is the heart of the Sports Cable Bubble: Tens of millions of pay television viewers spending what Thompson estimates is at least $100 a year on sports programming they have no intention of ever watching, pumping billions into games enjoyed by others, enriching networks, leagues, teams and athletes all the while.

Hruby went on to note that surveys attempting to quantify sports-watching consumers are all over the map:

The exact number of non-sports fans is difficult to peg: A recent Harris Interactive poll found that 43 percent of Americans won’t cancel cable and satellite television simply because of live sports, which also suggests that the majority of the country could be perfectly happy not paying for ESPN; industry analyst David Bank told Bloomberg Businessweek that 80 percent of basic-cable customers would decline to pay for sports if given a choice; Forbes writer Alan McGlade figures that no more than 10 million homes are regular ESPN viewers, about 10 percent of the total pay TV market.)

What does any of this have to do with the local TV deals for MLB teams?

Baseball is live sports programming, 162 games a season. Just like with national sports broadcasts, advertisers want to have their products in front of a baseball-watching audience who can’t skip through the commercials. Regional sports networks want that expected ad revenue, so they bid billions for the right to broadcast the local team’s games for a long, long time.

But ad revenue is only a part of the equation. Regional sports networks charge a carriage fee to cable and satellite companies, just like ESPN does. And while RSNs don’t often have non-sports programming to bundle with their sports offerings, they have the leverage of being the only game in town for fans who want to watch the local sports teams.

Or do they?

Comcast launched CSN Houston last year in a joint venture with the Astros and the NBA’s Rockets. The Astros own 45% of the new network and will receive $80 million per year for 20 years. But three of Houston’s cable and satellite companies have refused to pay the $3.40 carriage fees CSN Houston wants to charge per customer. That’s left 60% of the Houston area without access to Astros and Rockets games. In San Diego, 40% of cable and satellite customers don’t have access to Padres games because Time Warner Cable has refused to carry pay the carriage fee Fox Sports San Diego charges.

What’s going on?

Cable and satellite companies have stepped up their efforts to pin point exactly who is watching local sports on TV, when, and for how long, according to a report by The Wall Street Journal (subscriber only).

The data have given them a better sense for how often individual customers tune into home-team games, and for how long. They have created algorithms to gauge this level of “engagement,” and are now using the findings to make decisions about whether to add sports networks and pass on the fees to all subscribers.

According to the Journal, AT&T U-verse used this information in deciding not to offer CSN Houston.

The question now is whether RSNs will start gathering similar kinds of information in deciding how much to bid for teams’ broadcast rights. Hard to imagine they won’t, if they want to avoid finding themselves in the same situation as CSN Houston and Fox Sports San Diego.

This shifting landscape is likely to affect those teams with local TV rights deals expiring in the next few years. The Rockies’ contract with Root Sports expires after the 2014 season, the Phillies’ deal with CSN Philadelphia and the Diamondbacks’ deal with Fox Sports Arizona expire after the 2015 season, and the Reds’ deal with Fox Sports Ohio expires after the 2016 season.

Should the Phillies be worried? Perhaps. Sports Business Journal (subscriber only) reported last week that ratings for Phillies games on CSN Philadelphia through the first half of the season have dropped 36% from 2012. And while Philadelphia is the fourth-largest TV market in the country (after New York Los Angeles, and Chicago), the Phillies sit outside the Top 5 MLB teams in average TV ratings and average audience size. (Top 5 in ratings are the Tigers, Cardinals, Reds, Red Sox, and Pirates. Top 5 in audience size are the Yankees, Tigers, Red Sox, Mets, and Dodgers).

For now, it’s wait and see.

* * * * * * * * * * * * * * *

In November, we published information on each MLB team’s local TV contract. Since then, several teams have negotiated new deals, so it seems like a good time to update that information. The information on the below chart was collected from publicly-available sources.

 

Team RSN Avg. Annual Rights Fee Equity Stake Expiration Year
Arizona Diamonbacks FS Arizona $31 million 2015
Atlanta Braves FS Sports South/Sports South $20-$30 million 2031
Baltimore Orioles MASN $29 million 87% N/A
Boston Red Sox NESN $60 million 80% N/A
Chicago Cubs CSN Chicago/WGN $50 million (combined) 20% CSN Chicago WGN: 2014/CSN: 2019
Chicago White Sox CSN Chicago $45.5 million 40% N/A
Cincinnati Reds FS Ohio $30 million 2016
Cleveland Indians FS Ohio $40 million 2022
Colorado Rockies Root Rocky Mountain $20 million 2014
Detroit Tigers FS Detroit $40 million 2017
Houston Astros CSN Houston $80 million 45% 2032
Kansas City Royals FS Kansas City $20 million 2019
Los Angeles Angels FS West $150 million 25% 2032
Los Angeles Dodgers SportsNet LA $340 million 2038
Miami Marlins FS Florida $18 million N/A
Milwaukee Brewers FS Wisconsin $20 million 2019
Minnesota Twins FS North $29 million N/A
New York Mets SNY $65 million (inc. over time) 65% 2030
New York Yankees YES $90 million (inc. over time) 34% 2042
Oakland A’s CSN California $43-$48 million 2029 (opt-out after 2023)
Philadelphia Phillies CSN Philadelphia $35 million 2015
Pittsburgh Pirates Root Pittsburgh $18 million 2019
San Diego Padres FS San Diego $60 million 20% 2031
San Francisco Giants CSN Bay Area $30 million 35% 2032
Seattle Mariners Root Northwest $115 million more than 50% 2030
St. Louis Cardinals FS Midwest $25-28 million 2019
Tampa Bay Rays SunSports $20 million 2016
Texas Rangers FS Southwest $150 million 10% 2034
Toronto Blue Jays Rogers Sportsnet $36 million N/A
Washington Nationals MASN $29 million 13% N/A

 




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Wendy writes about sports and the business of sports. She's been published most recently by Vice Sports, Deadspin and NewYorker.com. You can find her work at wendythurm.pressfolios.com and follow her on Twitter @hangingsliders.


107 Responses to “Dodgers Could Be Last Team To Strike Gold With Local TV Deal”

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  1. Iron says:

    It would be interesting to see ‘current year’ fee or maybe a ‘guaranteed money’ column in addition to the estimated over the life of the contract fee. The Dodgers, for instance, have a contract which is estimated to be worth $8B through 2038 so $8B/25 ~ $340M. But they are getting something like $130M this year. In their case only some of the future money is guaranteed; if a sports tv bubble pops their SportsNetLA network would probably not take in anything like $8 billion.

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    • CH says:

      TWC’s contract with the Dodgers guarantees revenue of $5 for every pay TV household in the Dodgers’ TV market. So the $8 billion over 25 years is actually the floor of the deal. If revenue is higher than expected the deal could be worth substantially more than $8 billion.

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      • Jason says:

        And when cable is replaced by streaming on demand what does that do to the deal? Or technology X. The ‘floor’ of real estate deals 5 years ago or dotcom investments ten years ago was also thought to be quite high. That’s what a bubble is.

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        • CH says:

          Bubbles have winners and losers. Those problems that you mention are Time Warner’s problems.

          If this is a bubble and we are at the peak then the Dodgers are a winner and Time Warner is a loser. It isn’t the Dodgers’ problem if this deal loses money for Time Warner– unless you think this deal is going to bankrupt Time Warner.

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        • Iron says:

          “TWC’s contract with the Dodgers guarantees revenue of $5 for every pay TV household in the Dodgers’ TV market”.

          I think you are continuing to fail to see that in 2038 ‘television’ itself may very likely not resemble 2013. What does that contract mean if Time Warner has largely become an ISP and no longer broadcasts content via ‘channels’ as in the current model? This is just one of many scenarios that would render the aforestated guarantee meaningless without even bringing in the possibility of a Time Warner bankruptcy. A lot can happen in the technology industry in 25 years. 25 years ago the internet did not even exist.

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        • Iron says:

          I also point out $5/ viewer in Dodgers TV market is much less than $340M/year (total $8B over 25 years). That would assume 68 million subscribers in the Dodgers viewing area. There are currently only 84 million pay TV subscribers in the entire USA. A very generous footprint for the Dodger’s TV market puts the floor more like $34M/year.

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  2. Mr Punch says:

    Part of the problem is that cable itself is dying. Many of the younger people I know are not cable subscribers, relying instead on the Internet. In fact, local baseball is pretty much the only programming that is not readily available except on cable – which kind of turns the whole issue around.

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    • Kenny says:

      I am in this position. From my point of view others are not paying for my baseball, but I am paying for their everything else – a huge amount of money. Although I occasionally watch other things on TV, there is not a single thing I’m interested in other than live baseball I couldn’t get just as easily and for a lot less money through a streaming service. From this point of view, it’s the cable system itself – Comcast – that most needs to preserve bundling, because baseball will find it’s target audience and ideal media after cable.

      +17 Vote -1 Vote +1

      • Iron says:

        The majority of the people on this website are in this position, but are not a good representation of the population as a whole.

        +23 Vote -1 Vote +1

        • bjoak says:

          That’s true, but it still stands to reason that local sports are the *only* programming that is unavailable to people without cable. You can get everything else off the Internet–and, of course, you can get local games too if you’re crafty, but cable companies know that cable is dying and this is one avenue they can use to hold a segment of their customers hostage.

          That is why so many of the regional sports networks are actually owned by cable companies.

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      • michilllie says:

        Try this site. I turned off cable 2 years ago and have’t looked back. my only regret was sports…this site took care of that for me. It’s a life saver. It’s totally free and there is no downside. I’m not spamming, I promise. My advice on this site. If you do look into it and see a game you want to watch, make sure you click on the “LINKS” not the download button. You don’t need to download anything to watch games here. Trying to download is a waste of time. You’re welcome. http://www.vipboxonline.eu/

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        • Fireboss says:

          ON VIPBOX, I’ve used it as well but there are caveats to recommending it.
          First you MUST run an ad blocker. In order to give you something for free you get lots of stuff you do not want. Ad blocking insures you miss 99.99% of that.
          Secondly as michillie said NEVER download anything from this site. The “watch in HD” option link in tempting however clicking it begins a series of popups and opens a browser windows telling you that your plugin is out of date – it usually isn’t – trying to update the plugin installs multiple instances trojans and malware requiring someone who knows what he/she is doing to remove them. I watched a friend do it over my objections then spent the next couple of hours running multiple cleaning solutions to remove them. I do this as a part time business and had my emergency fix it kit with me.
          The standard def version is frustrating because the quality can be pretty good or awful even on a high speed data link and internal gigabit wired network making the HD link tempting. Resist it, it’s far more trouble than it’s worth.

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  3. I don’t understand why MLB.TV doesn’t have commercials. Seems like a nice place to grab revenue. I spend a lot of time staring at that blue screen. NHL Gamecenter plays the local commercials. Also, I already pay $170 for cable and $125 per year for MLB. I’m 18-35 with disposable income. I’m the exact target audience MLB is after, but I live in NC, some I’m not allowed to watch two of their teams by subscribing to MASN or MLB.TV..

    Anyone know how the Orioles and Nats are doing this season?

    +7 Vote -1 Vote +1

    • Anon21 says:

      MLB.tv does have commercials, but the rotation is pretty limited. My sense is that advertisers are not super-interested in buying time there, but I could be wrong.

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      • I watch on Roku. No commercials ever. Couldn’t MLB just show local commercials so the RSN’s could charge more for the ad time?

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        • TangoAlphaLima says:

          How much extra do you think Dallas Metro Ford is willing to pay FS Southwest because a viewer in North Carolina watches their commercial?

          MLB.tv really needs to be taking advertising into their own hands, selling nationwide spots. It’ll happen eventually. Until then, they don’t care about the RSNs.

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        • @3_2count says:

          MLB.Tv on non-computers doesn’t have commercials. On computers, it has commercials that will be stuck in your head for years.

          +12 Vote -1 Vote +1

        • Jimmy says:

          MLB.tv has commercials on mobile devices and computers but not on set-top boxes. There are probably more rights issues involved with streaming the commercials online that MLB and the RSNs don’t want to deal with. It’s not as simple as the RSN’s advertisers wanting to get more eyeballs on their commercials. There are different levels of rights clearance for using video clips, songs, and likenesses on streaming video as opposed to television. If MLB.tv added local commercials, the RSN’s advertisers would have to make sure that all of its licensed content was cleared for online/digital. That’s a headache nobody wants/needs.

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        • cs3 says:

          “On computers, it has commercials that will be stuck in your head for years.”

          …and

          “MLB.tv has commercials on mobile devices and computers”

          ===========================================
          Are you guys sure about that? I watch MLB.tv on my PC every single day and I have never seen a commercial. Ever. Does location matter? Or internet provider?

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        • BMarkham says:

          Maybe I could clear up the fact that some get commercials and some don’t on the laptop. I get commercials during live games, but not when watching a game that was already played.

          I don’t know why people think they SHOULD have commercials, people pay $25/month for it. On a per person basis commercials probably only make a total of a few bucks a month per person. Probably not worth annoying people that much for only a little more revenue. What they could do instead is automatically show you highlights from around the league. I know they have the highlights tab where you can manually look through them but it would be cool to just have them pop up during breaks if the user prefers it. Plus when commercial are on you don’t have the option to look at highlights.

          If I was in charge of MLB.tv, I would change a lot of things. MLB.tv is a product that (some) people need, and nobody loves. Most people I assume get it because they don’t live in their favorite team’s hometown, not because they prefer the experience to watching it on cable.

          No more black-out games: I realize that would take some time (years) as it involves a lot of rights and contracts but I would begin the process.

          Links to innings: A way to navigate directly to start of each inning (and half inning). This is possible to program automatically since the games are linked to box scores, pitch fx data and so on. No more guessing where in the time of the game a certain inning is

          Pull video of players: MLB.tv hypothetically could organize it’s video better. It could automatically generate lists of each hitter’s PA, each IP from pitchers, and each play for defenders. You would be able to watch a running stream of a hitter’s plate appearances, or filter them in a myriad of ways. See a stream of Chris Davis HRs for example. Same for pitchers. It would be a great way to get more use out of all the video they host instead of just a static recording.

          Also, it’s ridiculous they don’t have a way to overlay audio of the radio broadcast over the video of the video broadcast. These are things that can be achieved, they just don’t think they have to do them because there’s no competition. Some other company can’t decide they want to start broadcasting MLB games. But the way they should be thinking of it is that when someone is paying $25/month for MLB.tv they are making way more than when a fan watches the game on local TV.

          As I said, getting rid of blackout games would be difficult to do with all the contracts and IP involved, but the internet is the future of all types of broadcasting, baseball games included. MLB should take a internet-first strategy, making MLB.tv a product baseball fans can’t live without. This would really increase the subscriber base, which great because by nature MLB.tv, and the MLB as a whole, has low variable costs compared to fixed costs.

          But I imagine these ideas will remain just a dream, and I will continue to use an average, uninspiring product because I live in Colorado and root for the Cardinals and have no other choice.

          +5 Vote -1 Vote +1

      • Deelron says:

        It depends what you watch it on, which makes it even weirder that some devices have commercials and some don’t.

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        • bjoak says:

          If I see the “I slide” commercial one more time I will throw my laptop off the balcony. And why is that one guy shouting? And what is he shouting? Don’t get me started on the jackass who slides chaos.

          If you don’t get commercials, just keep quiet and be grateful.

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        • Roger Maris says:

          He is shouting “Ampshakers” and I assume he is shouting because his first name purports to be MadDog and I imagine one would be rather cross about having such a name.

          Fuck that commercial.

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    • cass says:

      Orioles are doing well but are in a tough divsion. The Nationals are doing terribly but are in a very weak division. Neither is a good bet to make the playoffs

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      • Bill says:

        The Orioles currently lead the race for the final wild card spot. I think they are a pretty good bet to make the playoffs. The gnats, not so much.

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    • Guest says:

      Please don’t let mlb.tv add comercials!!!!

      The blue screen is so refreshing between innings!!!

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      • Andrew says:

        I get commercials all the time. You must be a lucky one. I wonder if MLB.tv commercials are decided by market?

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      • As someone has pointed out, watching MLB.tv on computers has commercials and on mobile devices it has none.

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        • cs3 says:

          No, as I pointed out above, this is not true.

          I have MLB.tv on a computer.
          No commercials whatsoever.

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        • Adrastus Perkins says:

          I watch MLB.tv on my laptop and never have commercials, so it may not be that simple.

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        • cpins says:

          For computer users it might be related to what type of cookies you have floating around. I get a ton of Geico commercials and I know I visited their website a couple of months ago. Perhaps advertisers are only willing to have their ads served to highly targeted viewers.

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      • trbloomer says:

        The blue screen leaves my breath minty fresh

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        • Tony says:

          I watch mlb.tv on my laptop and my PS3 and I’ve never seen a commercial (hooray), but what’s interesting to me is how much the features vary between watching on PC, Roku, PS3 and xbox 360.

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  4. t ball says:

    As fast as technology is changing it is mind-boggling to me that some teams have deals reaching into the 2030s. Who knows what tv/computer/mobile viewing will even look like at that point? I can only assume that these deals include some clauses to adjust for those eventualities.

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    • Iron says:

      That was kinda my point too. The ‘avg annual rights fee’ for some of these deals are extremely speculative.

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  5. Mitch says:

    Non-sports fans “subsidize” sports fans, but sports fans also “subsidize” non-sports fans. Look back at that Disney bundle because the argument goes both ways. If I want ESPN, I also have to get Disney. Many more people want to watch ESPN than Disney, so ESPN charges more. But think about what happens in al a carte pricing: both networks still need the same amount of revenue to cover costs and turn a profit, so Disney will have to raise costs A LOT to account for a sharply lower subscriber base. Less popular channels will now actually cost more (on a per channel basis) than sports channels! In the end, a consumer makes a programming purchase decision based on value. If you value the suite of channels offered at $100, you will purchase. If you can purchase only the individual channels you want, the cable company is going to find a way to still wring $100 from you; you’ll just get fewer channels.

    +16 Vote -1 Vote +1

    • TKDC says:

      Of course, if you literally don’t want the channel, that doesn’t matter. But people who “don’t watch ESPN” probably still watch it sometimes, whether they dig the little league world series, ice skating, world poker tournament or whatnot. I mean, I generally don’t watch the Hallmark Channel, but when I flip though and see a rerun of Dr. Quinn Medicine Woman, I definitely watch it at least until it goes to commercial.

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      • cass says:

        I’m guessing that most sports fans aren’t ever going to watch Dr. Quinn Medicine Woman or anything else on the Hallmark Channel, though it’s quite possible someone else in their household will. I’m also guessing most people who watch mostly HGTV aren’t going to turn on ESPN.

        But more to the point, there are a lot of households that don’t wish to pay for the Hallmark Channel. You’d probably be better off streaming Dr Quinn from Netflix than watching it on Hallmark. So Netflix + your local sports teams might be a better fit for you and could be cheaper.

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      • supershredder says:

        Dr. Quinn is such a bad ass show

        +6 Vote -1 Vote +1

        • cass says:

          I watched it growing up, but I’d never watch it now. Also, it was terrible after they changed actresses for Colleen. Jessica Bowman basically ruined the show single-handedly.

          (Let’s start a Dr. Quinn discussion in the FanGraphs comments. That’s be pretty awesome.)

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    • John Thacker says:

      Right, if 43% of people really are subscribing to cable– and paying $100/month or whatever for the privilege– only because of sports, that suggests that ESPN etc. really could jack up the prices and those people would still subscribe, just only to sports channels.

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    • t ball says:

      Many more people want to watch ESPN than Disney? You sure about that? It may be true some weeks depending on the season, but check the ratings and you’ll see a broad spectrum of networks represented in the leaders, and ESPN doesn’t show up some nights at all.

      Friday’s ratings had Disney in the #1 spot and with 18 shows in the top 100. ESPN had 1, in 97th place, just ahead of “Cool Pools” on HGTV. Monday’s ratings had shows from Adult Swim, TBS, Food, HGTV, TBS, A & E, Bravo, Discovery, History, TLC, Nick, all listed, but no ESPN.

      It’s a complex market with lots of niches to fill, sports is just one of them.

      +13 Vote -1 Vote +1

      • cpins says:

        But I believe ad dollars are where the real value lies. Disney viewers are much more likely to DVR & ffwd through commericals than live sports fans. And I really think this is less about ESPN/Disney than regional nets.

        The key for the latter would be to get rights to market their programming on digital platforms within market. I live in DC and use mlb.tv to watch the Mets on SNY. But I can’t when I visit mom in NJ because I’m then within the market. So let RSN’s serve “in-market” consumers digitally as well as over the air. They wouldn’t be cannibalizing mlb.tv and they’d be creating an alternate revenue stream to cable providers that have effectively blacked out parts of Houston and other markets.

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  6. mojito says:

    In case of the Phillies the diminished audience may as well have something to do with the team not playing to the expectations of a perennial division winner. The time of regular sellouts at Citizens Bank Park is over for the time being too. There is only so much a fan base accustomed to success will tolerate.

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  7. TKDC says:

    Fun Fact: a la carte TV was originally pushed because certain folks didn’t want to pay for MTV (religious beliefs were involved). If put into place, many of these non-sports fans would not pay for sports, but niche channels that I’m guessing these hipster doofuses are watching would simply go away. As long as cable prices don’t get too out of hand, the blatant tying arrangement is actually a win for consumers. Of course, some of these deals suggest that maybe it is getting out of hand.

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    • David says:

      Cable prices are too out of hand. I can literally watch everything except live sports for only the cost of my Internet. It’s not be what Telecomm companies want to deal with, but its the reality of the marketplace, and enforcement isnt feasible. Its kinda like what happened to the Music industry over the last 15 years, it may not be legal, but its happening, and attempts at legislating it away completely fail, at a certain point the industry has to respond to its new marketplace. I currently have both cable and a landline, but only because Time Warner charged me less for this package than Internet only. When it all boils down, data transmission is data transmission, and we should be doing it all over the most efficient transmission lines we can make, not subsidising decades old fixed costs of the Telecomm industry. How long until “watchESPN” is the industry standard? get a website and charge a subscription fee… truly a la carte programming. For reference, this POV is coming from a 26 YO, Male, professional in the legal industry, who lives in NYC.

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      • Jimmy says:

        It’s not that simple. A lot of content providers/networks are providing free/low-cost streaming options for their shows because they’re getting paid by the cable companies. If that revenue stream decreases, those non-sports shows you like may not be free/cheap on Netflix/Hulu/etc. anymore and may require subscription to multiple services.

        Also, a la carte cable will pretty much kill any chances of any new or interesting cable networks becoming successful. People already complain about the homogeny of cable TV/reality programming. If cable went a la carte, the only channels anyone would buy would be what they already know. Any niche or limited-interest channels that couldn’t survive on their own would be shut down pretty quickly by their parent companies. The viewership stakes being a lot higher would also reduce the risk-taking of programmers who couldn’t afford to risk losing subscriptions so you can expect a lot more Honey Boo Boo channels at that point.

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        • Iron says:

          Name two new or interesting cable channels that have come out with quality innovative programming in the current system. AMC, I guess, but after that its a wasteland. I literally cannot think of another single non-sports cable channel I have watched anything on in like a half a decade.

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        • Many would say FX, which has produced Louie and The Shield, for example. Comedy Central hasn’t done anything to match South Park and the Daily Show, their two greatest achievements of the ’90s, but they still deserve a lot of credit for those two.

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        • AnthonySoprano says:

          I’d put Tosh & Jeselnik right up there with those two shows …

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        • cpins says:

          I think part of what David is suggesting is that many programs are available via “pirating” which as he acknowledges is not legal.

          But your point is still valid. The only reason there is content available to be pirated is because the cable companies are still making enough money from legacy subscribers to pay the content provider. Once that scale tips to the point that they won’t pay AMC, fX, Comedy etc. enough to make a profit those content producers will be gone.

          The entire world could become super low production YouTube stuff or a pay per episode iTunes model. And the latter will only work if content creators can monetize enough margin from those willing to pay for episodes to subsidize the pirates.

          Music is a very different production platform. My next door neighbor had a label deal a decade ago and his band is now unsigned/independent. But they can create just as high-quality recordings in their basement as they did in the “old days” when they had to pay hundreds an hour for studio time.

          You can do TV on the cheap but not all genres.

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      • AnthonySoprano says:

        You forgot about the 40+ crowd who grew up with cable and probably will be the last to switch over to you youngsters’ way …

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    • Joe says:

      There are no hipster doofus channels. Hipsters don’t own televisions.

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  8. Triple R says:

    “The data have given them…”
    I’d think the WSJ would have better grammar.

    -19 Vote -1 Vote +1

    • John Thacker says:

      WSJ house style, as explained in this article there, is generally to use “data” as a plural. They used to exclusively favor only the plural, but now accept the singular as well.

      The person to whom you may email complaints is given in the linked article.

      +12 Vote -1 Vote +1

    • Pirates Hurdles says:

      Umm, data are plural.

      +9 Vote -1 Vote +1

      • cass says:

        Not necessarily. Some people use it as a plural noun, some as singular. The preferred usage tends to vary my academic discipline.

        Note that this is a grammatical distinction, not a semantic one. When you say that “gold is selling for $2000 per ounce”, you are not referring to one nugget of gold. Similarly, when you say that “the data indicates that strikeouts are increasing in baseball”, you are not referring to a single piece of data.

        For more: http://en.wikipedia.org/wiki/Mass_noun

        Vote -1 Vote +1

      • Doug Lampert says:

        More to the point, there is no separate plural form so even if you insist that data can be singluar you have to accept that it is also a valid plural.

        The converse is not the case, there’s no compelling reason to consider the singluar to be “data” as opposed to alternatives such as “datum” or “anecdote”.

        So data is able to be a plural, but use as a singular is debatable.

        Vote -1 Vote +1

        • cass says:

          Doug, please read about mass nouns in my link above. The question is whether data is used as a count noun or a mass noun, not whether it is used as a singular or plural.

          When used as a count noun, the sinular is datum and plural is data. When used as a mass noun, there is only one form, data. In this case, data is essentially a substance and to form a singular, you have a “piece of data” much like you have “a nugget of gold”. Mass nouns have no plural grammatical form. There is only “gold”, not “golds”. Even if you are referring to all the gold in the world, including many gold bars, it is still just gold.

          I personally believe that data sounds far more natural as a mass noun, but in some fields, it tends to be used as a count noun.

          Vote -1 Vote +1

        • I, personally, object to the barbarous word “stadiums.”

          The correct plural is stadia.

          Vote -1 Vote +1

        • cass says:

          Alex,

          That is quite correct if you are speaking in Latin.

          Vote -1 Vote +1

        • michilllie says:

          Personally, when speaking I used data as both singular and plural. I just change my pronunciation to mark the difference in definition. I will pronounce the first ‘a’ in ‘data’ as either a long sounding or short sounding ‘a’. I’ll let you figure would which pronunciation fits which definition. ;P

          Vote -1 Vote +1

  9. cass says:

    Baseball is more popular with older men than with younger men, isn’t it? Google assumed I was much older than I actually am because I view a lot of baseball websites and there are tons of Viagra and Cialas ads on baseball broadcasts.

    Vote -1 Vote +1

    • Jason B says:

      To be fair, I would assume there are plenty of young men using those also.

      Vote -1 Vote +1

      • cass says:

        The ads aren’t targetting young men, though. They usually show men that look to be in their 50’s and talk about a viewers who have reached an age where they know how to make things happen or whatever. That wouldn’t be too appealing to a younger man.

        Vote -1 Vote +1

        • Antonio Bananas says:

          What’s the age/production curve peak for “knowing how to get things done”.

          +18 Vote -1 Vote +1

        • cass says:

          Viagra wants you to think it peaks about the same time that you begin to need their product. They are putting out an attractive image of an older man and trying to make him look rugged, tough, and competant. They are associating this with their pill, so that men who have ED think that they can be attractive and appealing to women and that this pill is part of that. Like most advertising, it is terribly manipulative. I imagine it also works.

          Vote -1 Vote +1

        • Antonio Bananas says:

          Viagra doesn’t make your 50 year old wife more attractive though. I’d think that’s part of it.

          Vote -1 Vote +1

        • B N says:

          @Antonio:

          Q: “What’s the age/production curve peak for “knowing how to get things done?”

          A: It peaks just around the age where you start taking lots of Viagra before going out sailing alone or wrangling horses all day.

          Vote -1 Vote +1

        • AnthonySoprano says:

          Seriously Cass? Those commercials are about as effective as those beer swilling ads you see plastered everywhere at you naive youngsters …

          Or do you really think all those busty bimbos will burst out of their g-strings after the first sip of MGD?

          Vote -1 Vote +1

    • That Guy says:

      sbnation blogs are being advertised by Depends now.

      Vote -1 Vote +1

      • That Guy says:

        Ack. That was poorly written. Depends has purchased advertising space on sbnation.com. Likely for that 18-35 year old male.

        Vote -1 Vote +1

  10. James says:

    It is ridiculous just how bad the Braves’ TV deal is. Doesn’t expire until 2031, only $20-30 million a year, no equity. Just terrible.

    Vote -1 Vote +1

    • Antonio Bananas says:

      They’ll capitalize on a realistic revenue stream. I’d be surprised if the larger deals are actually fully carried out. Cable isn’t going to exist in 15 years.

      Vote -1 Vote +1

    • When Time Warner bought Turner Sports, they owned both the Braves and the television stations that aired the Braves. So they negotiated a below-market deal as creative internal accounting.

      Vote -1 Vote +1

      • Roger says:

        Actually, this deal has nothing to do with the old creative internal accounting that happened between the Braves and TBS. Time Warner struck this deal with Fox Sports after they knew they were selling the team.

        Vote -1 Vote +1

  11. cass says:

    There’s also the matter that some fans would rather pay just for programming rather than channels. Why can’t someone buy access to Nationals games directly from the team and watch them through online streaming? Why can’t someone just buy access to Disney’s programming straight from Disney, or ESPN straight from ESPN?

    There is literally no need for cable companies to exist anymore. All consumers need is an ISP and content providers. The middleman is redundant and should be eliminated entirely.

    Vote -1 Vote +1

    • Joe says:

      Unfortunately the cable companies are also often our ISPs.

      Once they’re squeezed on the television-side, internet pricing is going to become terrible.

      Vote -1 Vote +1

      • fergie348 says:

        This is my conundrum. I’m only able to get internet and cable TV from Comcast where I live (too far from the telco for DSL, Google fiber where art thou?) I cancelled my cable TV and they tried to jack up my internet service pricing, saying I had a ‘special deal’ that they could no longer honor. I kicked and screamed enough that they let me have my 12 mbps down/3 mbps up connection for ~$50 a month and I watch baseball on MLB.tv but it won’t last.

        Vote -1 Vote +1

      • payroll says:

        Or they’ll just squeeze back by capping your data or blocking access to mlb.tv

        Vote -1 Vote +1

        • cass says:

          I don’t think they’re legally allowed to block access to mlb.tv. They certainly shouldn’t be.

          And yes, there is a big problem with lack of competition among ISP’s. Hopefully this will be solved in the future as well.

          Cable and phone companies provide bandwidth. That’s the only value they add. In this day and age, the rest is just bloat. Consumers should be able to go directly to content providers.

          Vote -1 Vote +1

      • Bill says:

        The money is in targeted ads, not in subscriptions. I expect Google Fiber and future competitors with a similar business model will start dominating the ISP market. Cable internet rates will have to remain similar or they will be completely priced out of the market.

        Vote -1 Vote +1

    • adohaj says:

      The cable companies exist because they own the hardware. Without the cable company there is no network to distribute the media.

      Vote -1 Vote +1

  12. Luke in MN says:

    Why are some expiration years “N/A”?

    Vote -1 Vote +1

  13. Scott Lindholm says:

    Outstanding work. As a Cubs fan, I keep hearing about how they’ll start their own network and create a new revenue stream. It is Chicago and the Cubs, so I don’t rule it out, but that WSJ article on Houston was eye-opening when I read it a couple weeks back. Houston isn’t Chicago and I won’t extrapolate, but outside of the the top 3 markets, it will be a stretch to see big TV deals.

    Vote -1 Vote +1

  14. Frank says:

    I remember when I first heard about Congress doing this… in the 90s. Though the rest of the points about local TV sports networks hold true, I just don’t think we can trust the cable model to change until it literally has changed.

    Vote -1 Vote +1

  15. alen says:

    i hope sports does go online via ESPN or separate league apps like MLB TV. i bet enough people will cancel cable that some other channels will go under because the revenue vanishes. then the a la carte whiners will start going on about how there should be bundles of channels.

    this happens on some of the geek sites. G4TV and syfy and some other geeky channels went off the air or had their programming changed. a lot of the sports hating geeks were mad. yet they rant about paying for sports

    but if sports does go online with no blackouts then i bet HBO Go follows

    Vote -1 Vote +1

    • fergie348 says:

      If I could get HBO Go for ~$10 a month streamed via Roku or equivalent I’d be set. Roku has just enough content now for me to justify cutting the coaxial cable to my house. Done..

      Vote -1 Vote +1

  16. Andrew says:

    I wouldn’t be surprised to see Detroit get a much larger deal, granted not Dodgers large. Their ratings have been tops in the league. Even the ASG pulled in the best ratings in the Detroit (all of Michigan) market.

    Baseball hungry, it seems.

    Vote -1 Vote +1

  17. Bill says:

    I, for one, look forward to not subsizing the kardashians, real housewives, duck dynasty, etc. etc. Those shows may have a bigger ‘audience’ than sports fans, but I bet you they don’t have more $$ to cough up to pay to watch it than sports fans. Just watch how many people that enjoy the kardashians for free would drop it in a minute if it costs 2.99 a month.

    Vote -1 Vote +1

  18. fergie348 says:

    I think the key to a la carte is getting the pricing right. The time is ripe for it, but you need the content providers to play along. HBO, are you listening??

    Vote -1 Vote +1

    • Peter Litman says:

      HBO is one of the few channels you can get a la carte (although the broadcast basic level of service — with the local stations is a buy-through). But almost no one buys broadcast basic+HBO. People who buy HBO also almost always buy expanded basic (ESPN, CNN, USA, Lifetime, Discovery) and usually buy digital (ESPNews, Boomerang, Style, Bio, Investigation Discovery), too.

      Vote -1 Vote +1

  19. psualum says:

    One other super awesome thing that would result of this: Since alot of useless channels would die off, only the strong channels (and their shows) would survive. Combine that with the best shows of stupid channels getting picked up elsewhere, and television programming would have a collective quality spike. You cant fill your coffers with crappy reality shows that cost a jar of quarters to produce because noone will by that shitty channel if you don’t have anything good to go with it. Looking at you, VH1/Learning Channel

    Vote -1 Vote +1

  20. I’m surprised to see that the A’s get 43% more annual local TV revenue than the Giants!

    Vote -1 Vote +1

    • bjoak says:

      I believe the explanation for this is that the Giants have an equity stake of 35%, which I assume means they get back 35% of the profit the channel makes, whereas the A’s only get their 40-some million. Still, as an A’s fan I am happy to see they are in the middle. It supports that they have the interest needed for a new local ballpark.

      Vote -1 Vote +1

  21. Jim says:

    Wendy is confusing a pissing contest between competing cable companies with some kind of industry trend. The same thing happened in Philly when FIOS was introduced to the area and Comcast practically blocked them from getting CSN.

    The data given actually provides a very, very convincing argument as to why teams likely will receive big TV contracts, which is simply that they are HUGE ratings and advertising juggernauts that provide cable companies with tons of revenue. The current cable TV industry structure is not going to change any time soon, which would be the only feasible reason for not giving out these huge contracts.

    Vote -1 Vote +1

  22. Peter Litman says:

    I have worked in cable TV for a long time. I would not hold my breath waiting for sports or other popular programming that is included in the basic package to be sold a la carte. Both the cable networks and the cable operators like the current system — a big bundle of programming has something for everyone in the household and is a simple thing to sell. 85% of households buy basic cable — it is very popular, despite the fact that it a lot more expensive than it used to be. Some people have dropped cable (or never subscribed) and that’s largely because the cost has gone up pretty dramatically in the past decade. However, during that time, the original programming on cable is a lot more expensive and a lot better, although beauty is in the eye of the beholder.

    The problem with shifting to a la carte is that the regulatory scheme would also have to eliminate the sale of the current packages to make it “work”. Otherwise, here’s the a la carte system you could get — you can keep your existing package or you can buy individual channels for $20 each. That’s not that attractive, by design, since the industry wants to keep the existing structure. So the law would have to require all of the existing packages to be eliminated — that’s very messy, everyone would have to make new decisions about what they want to buy and not buy. There is a regulatory alternative, but that would involve regulating the a la carte prices — equally messy.

    The sports bubble will burst the way all bubbles burst — someone will pay too much for something and find that they can’t get anyone to pay what they need to make a profit. It can happen. The Twins tried and failed to start their own regional sports network several years back.

    Regarding the questions about advertising in MLB.TV and MLB Extra Innings, part of the issue is the payment of residuals to union actors and directors who work in and on the commercials. If the commercial only runs on regional television, that’s one kind of payment. If it runs on the Internet that’s another and if it runs on national TV that’s a third. It is a legacy of how TV developed. It will get sorted out eventually, but it hasn’t yet. If the spots are blacked out on the “secondary” platforms, no residuals need be paid.

    Vote -1 Vote +1

  23. canal_queen says:

    If you’re right, and this bubble is about to burst, then the Dodgers are going to have a serious competitive advantage for a long time.

    Vote -1 Vote +1

  24. dt says:

    One thing people are missing when talking about going pure internet streaming and death to cable, is the casual audience. The person who doesn’t come to sites like this and only watches one or two games per week, when the team ace is pitching. The current system works great for them and you will lose them if you force them to buy the full mlb tv package currently designed for dedicated seam heads. My experience, I don’t really care for the NBA, but if I’m bored or there is an especially compelling game I will sometimes watch, but I’ll be damned if I will ever pay for the NBA’s equivalent of mlb tv.

    Vote -1 Vote +1

  25. Tim says:

    I think this issue is unique to the individual markets. If the Dodgers deal was the peak of this market, what a glorious peak that would be.

    Vote -1 Vote +1

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