Dodgers Send Shock Waves Through Local TV Landscape

Early Sunday morning, Twitter was abuzz with news that the Dodgers and Fox Sports West had agreed to a 25-year broadcast deal valued between $6 billion and $7 billion. By Sunday afternoon, Bill Shaikin of the Los Angeles Times had confirmed the outline of the deal, but cautioned that the Dodgers and Fox were still negotiating, with a November 30 deadline looming.

As I explained last week in this post, the parties’ existing agreement gave Fox an exclusive, 45-day window in which to negotiate a new deal to govern the 2014 season and beyond. Hence, the November 30 deadline. If an agreement isn’t inked by Friday, the Dodgers must submit a final offer to Fox by December 7. Fox then has 30 days to accept or reject the offer. If Fox rejects the offer, the Dodgers are free to negotiate with whomever they want.

However the negotiations play out, it’s clear now that the Dodgers’ local TV revenue is about to enter the stratosphere. A 25-year deal worth between $6 billion and $7 billion would net the Dodgers between $240 million and $280 million per yearPer year. That’s more than any team has ever spent on player salaries in a single season — even the Yankees. And it’s nearly double the amount of local TV revenue pulled in annually by the team with the second-most lucrative deal — the other Los Angeles team (the Angels) — which entered into a 17-year deal with Fox Sports West worth $2.5 billion.

To truly appreciate the magnitude of the Dodgers’ tentative deal with Fox, though, you need to compare it to more than the Angels-Fox agreement. You need to place it side-by-side with the other 28 teams’ local TV broadcast contracts. We gathered that information and present it to you below in several, related charts. We relied solely on publicly available sources, which in some cases do not provide a complete picture of each team’s deal. For example, we know that the Atlanta Braves and Oakland A’s are burdened by long-term contracts at well-below market rates, but we were not able to determine the yearly revenue each team receives from those contracts.

There are a variety of ways to present the information. As you will see from the discussion, we organized the deals in a way that highlights the differences between the super rich teams, the rich teams, and the not-so-rich teams.

Recent Billion Dollar Deals

The tentative Dodgers-Fox contract is just the latest billion-dollar local TV deal. The Texas Rangers kicked off this new frenzy in late 2010 with it’s 20-year/$1.7 billion deal with Fox Sports Southwest. But it’s not just the big-market teams cashing in. The San Diego Padres — who play in one of the smallest media markets in the league — signed a 20-year/$1.2 billion deal with the new Fox Sports San Diego before the beginning of last season.

A note about equity. With the exception of the Dodgers’ deal — the final terms of which are still to be revealed — all of these new local TV contracts grant the teams an equity stake in their broadcast partner. The teams typically receive a percentage of profits commensurate with their equity holdings. But that revenue is not included in the team’s “net local revenue” and therefore not subject to revenue sharing under the Collective Bargaining Agreement. For more on the workings of the league’s revenue-sharing program, read this post I wrote a few weeks ago.

Los Angeles Dodgers 25 years/$6b – $7b$240m – $280m per year 

(tentative)

Fox Sports West Begins in 2014 seasonExpires after 2038 season
Los Angeles Angels 17 years/$2.5b$147m per year 

25% equity stake

Fox Sports West Began before 2012 seasonExpires after 2028 season
Texas Rangers 20 years/$1.7bOne time $100m fee 

$80m per year

10% equity stake

Fox Sports Southwest Begins in 2015 seasonExpires after 2034 season
Houston Astros 20 years/$3.2b$80m per year 

45% equity stake

Comcast SportsNet Houston Begins before 2013 seasonExpires after 2022 season
San Diego Padres 20 years/$1.2b$60m per year 

20% equity stake

Fox Sports San Diego Began before 2012 seasonExpires after 2031 season

Team-Owned Regional Sports Networks

There was a time when the Yankees and Red Sox stood above the other 28 teams in local TV revenue with their team-owned regional sports networks. When it comes to yearly rights fees, that’s not the case anymore. But the owners of the Yankees and Red Sox — and now Mets, Orioles, and Nationals — continue to rake in millions of dollars in profits from the operation of their RSNs. And again, as noted, these profits are not subject to revenue-sharing.

The Orioles-Nationals’ joint ownership of MASN is complicated — an outgrowth of MLB’s decision to move the Montreal Expos to Washington, D.C., and into the Orioles’ broadcast area. I explained the details of the Orioles-Nationals-MASN relationship — and the current dispute over annual broadcast revenue —  in this post.

New York Yankees Team-controlled holding company owns 34% of YES Network (Yankees Entertainment & Sports Network) $90m per year in revenue, increasing to $300m by 2042
New York Mets Mets owners (Wilpons) own 65% of SNY (SportsNetNew York) $65m per year in revenue, increasing to $83m by 2015 25-year contract
Boston Red Sox New England Sports Ventures owns Red Sox and 80% of NESN (New England Sports Network) $60m per year in revenue
Baltimore Orioles Orioles own 87% of MASN (Mid-Atlantic Sports Network) $29m per year in revenue
WashingtonNationals Nationals own 13% of MASN $29m per year in revenueNationals seeking increase to $100m per yearDispute in mediation Agreement creating MASN includes provision allowing Nationals to re-set annual rights fee every five years

 

The Hybrid Comcast SportsNet Deals

I wasn’t sure how to characterize the broadcast deals for the White Sox, Cubs and Giants. All are big media-market teams, yet none controls its own regional sports network or has cashed in (yet) in the new market paradigm. What they share in common is a significant equity stake in the local Comcast SportsNet. The White Sox and Cubs have more traditional rights-fee agreements (fee per game broadcast) while the Giants receive a percentage of revenue generated by advertising during the broadcasts. The White Sox and Cubs also broadcast some games on local Chicago station WGN. I was not able to track down information on those broadcast agreements.

Chicago White Sox Owner Jerry Reinsdorf owns 40% of Comcast SportsNet Chicago $450,000 per game broadcast on Comcast SportsNet Chicago.Fee for games broadcast on WGN: N/A N/A
Chicago Cubs Owner (Ricketts Family) owns 20% of Comcast SportsNet Chicago $450,000 per game broadcast on Comcast.Fee for games broadcast on WGN:N/ATotal local TV revenue approximately $50m per year Contract with Comcast expires after 2019 season.Contract with WGN expires after 2014 season.
San Francisco Giants Team owns 30-33% equity in Comcast SportsNet Bay Area Giants receive percentage of CSNBA revenues; contract believed to have escalators. Actual revenue received: N/A Began before 2008 seasonExpires after 2032 season

 

The Soon-to-Expire Deals

The teams on this chart have broadcast agreements set to expire over the next five years. All will be looking to cash in on the new market dynamics. Market size and ratings will drive the terms of their next deals.

Philadelphia Phillies $35m per year Comcast SportsNet Philadelphia Expires after 2014 season
Colorado Rockies $20m per year ROOT Sports Expires after 2014 season
Arizona Diamondbacks $31m per year Fox Sports Arizona Expires after 2015 season
Seattle Mariners $45m per year ROOT Sports Opt out after 2015 season; contract expires after 2021 season
Tampa Bay Rays $20m per year SunSports & Fox Sports Florida Expires after 2016 season
Cincinnati Reds $30m per year Fox Sports Ohio Expires after 2016 season

 

The Mid-Markets

Four teams with decent deals under old market conditions. Now all are outpaced significantly by the deals struck in the last two years. But all these teams reside in small to medium-sized media markets and are unlikely to command the kind of dollars thrown at the Dodgers, Angels, Rangers and Astros when their deals eventually expire. That’s particularly true for the Blue Jays, which are owned by the same company (Rogers Communications) that owns the broadcaster (Rogers SportsNet).

Detroit Tigers $40m per year Fox Sports Detroit Expires after 2017 season
Toronto Blue Jays $36m in 2012; adjusted year to year Rogers SportsNetRogers Communications owns the Blue Jays and Rogers SportsNet Year to year; no expiration
Minnesota Twins $29m per year Fox Sports North Began before 2011 season; expiration date unknown
Cleveland Indians $30m per year SportsTimeOhioThe Dolan family owns both the Indians and SportsTimeOhio Year to year; no expiration

 

The Have-Nots

Last and very much least, the local TV have-nots.  The Royals, Pirates, Brewers and Cardinals are located in small media markets. Even the Cardinals’ traditionally strong ratings just cannot command the kind of local TV revenue that bigger market teams enjoy. The A’s, of course, play in the San Francisco Bay Area, a big media market, but their consistently low TV ratings have kept the A’s from the kind of money the rival Giants enjoy.

The Braves — well, the Braves are a victim of bad deals and bad timing. Liberty Media bought the Braves from Turner Broadcasting in 2007 and inherited 25-year local TV contracts negotiated by Turner at below-market rates. We weren’t able to track down the Braves yearly rights fees but we do know that the contracts significantly hamper the Braves’ payroll decisions.

Kansas City Royals Less than $20m per year (exact figure not known) Fox Sports Kansas City Expires after 2019 season
Pittsburgh Pirates $18m per year ROOT Sports Expires after 2019 season
Miami Marlins $18m per year Fox Sports Florida Began before 2006; expiration date unknown
St. Louis Cardinals $14m per year Fox Sports Midwest Expires after 2017 season
MilwaukeeBrewers $12m per year (Some information suggests thus figure will rise to $30m before 2013 season). Fox Sports Wisconsin Expires after 2019 season
Oakland A’s N/A Comcast SportsNet BayArea Began before 2009 seasonOpt-out after 15 years
Atlanta Braves N/A Fox Sports South/Sports South/Peachtree TV Began before 2007 seasonExpire after 2031

There you have it. Thirty teams. Thirty different local TV agreements. From the Dodgers at the very high end to the Brewers, A’s and Braves on the very low end. For some teams, the dynamics are fluid and will change in their favor soon. Others are looking at years of climbing up a steep hill in an effort to compete. The new local broadcast reality. The new revenue inequity.

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

Update: December 3, 2012

Since this post published on November 27, I’ve received information suggesting some of the local TV contracts differ from the information I obtained from publicly available sources. For example, as noted in the comments, the New York Times reported in September, 2011, in an article about Brewers’ owner Mark Attanasio, that Milwaukee’s $10 million per year local TV rights fee “would triple” starting in 2013. I have not been able to independently verify that number. Similarly, I reported that the Reds receive $30 million through their local TV contract, but an article cited in the comments suggests that fee is closer to $10 million.

I’ve also received information from a source suggesting that the Rays’ make less than $20 million per year in local TV money and that their contract will expire later than 2016.

I will continue to update the post as new information becomes available.

Update: December 6, 2012

The Milwaukee Journal-Sentinel has reported that the Brewers’ local TV rights fees will go up to “around $21 million” in 2013, according to GM Doug Melvin.




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Wendy is also a contributing writer for Sports on Earth. Her writing has appeared on ESPN.com, Baseball Nation, Bay Area Sports Guy, The Score, The Classical and San Francisco Magazine. Wendy practiced law for 18 years before beginning her writing career. You can find her work at wendythurm.pressfolios.com and follow her on Twitter @hangingsliders.

83 Responses to “Dodgers Send Shock Waves Through Local TV Landscape”

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  1. Braves Fan says:

    The Braves really need to figure out a way to fix this, or they’re going to turn into the Pirates.

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    • Petruchio says:

      In how Pittsburgh traded away their stars and leeched off of revenue sharing for a decade?

      For all the cash flaunting, that doesn’t necessarily mean that teams are going to buy more wins. It, along with the new collective bargaining agreement, means we’re more likely to see extensions for franchise players and overpaying for free agents, on top of a declining mean quality of free agents in any given class. Elite free agents will become very rare.

      Atlanta is exceptionally good at talent evaluation and player development, so while the Braves might lack star power, so long as the organization continues what it’s been doing for twenty years, it’ll be able to field a consistently competitive team.

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      • Antonio Bananas says:

        For the last 20 years? Up until about 2004, they had a high payroll. Since then, they haven’t been as successful. It’s going to suck to see Heyward walk at some point (in all likelihood). Also, no, you can’t buy a championship, but it definately makes it easier. You can cover up your mistakes easier.

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      • Joel says:

        Off topic. Is that you, Sutkin?

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  2. Nik says:

    The Braves are going to be left in the dust with their deal. I wonder if they will be able to renegotiate before 2031 when the on-field product and thus the ratings start to suffer because of it.

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  3. Chad says:

    As a Braves’ fan… ugh.

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  4. Infield Fly says:

    Toronto – “Mid Market” ?

    Last I checked this was one of the larger markets, in addition they have thier entire country watching them. The TV deal is also a little suspect as Rogers own’s the Team and the network so frankly the number doesn’t really matter….

    +31 Vote -1 Vote +1

    • Antonio Bananas says:

      “entire country watching them” is kind of manipulative isn’t it? Canada doesn’t have an enormous population and the population they do have isn’t known for being huge baseball fans.

      -7 Vote -1 Vote +1

      • Allan G says:

        TV ratings are calculated differently between Canada and the US, but the numbers the jays were getting were VERY high compared to other teams. Like, outpacing the Yankees high.

        They are not a small to mid size media market at all. Torontos one of the biggest cities in NA, and that doesn’t include having the rest of the country for territorial rights as well.

        +19 Vote -1 Vote +1

      • ABsteve says:

        Jays averaged 540,000 a game last year, and they haven’t even begun to approach the popularity they used to have, they’re getting shafted.

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      • rj says:

        IIRC, the Greater Toronto Area is the 4th or 5th biggest media market in north america. Lots of corporate offices, lots of money, and the other teams in the market (Leafs, Raptors) are terrible. When the Jays won back to back world series, they had the highest payroll in baseball and sold 4 million seats for something like 5 straight seasons. The secondary market of Canada is about 35 million people – roughly the same as California, which is divided among 5 teams.

        +7 Vote -1 Vote +1

  5. Mike says:

    regarding Toronto, I think you have them mis classified. Their TV numbers are the highest in baseball. Considering the market is all of Canada through the Rogers Sportsnet they have extremely high TV numbers relative to NYY or LAD

    +11 Vote -1 Vote +1

  6. Sparkles Peterson says:

    So maybe MLB was right to scuttle the $3 billion TV deal McCourt tried to make to hold onto the team.

    When asked about the paltry amount the Cardinals are getting from their TV deal, someone with the organization expressed concern that teams are shooting themselves in the foot committing to deals that last two decades into the future. Short of the kind of massive hyperinflation a world superpower should be immune to I don’t see how these big deals wind up hurting teams, so I suspect it was just ass-covering after getting bent over at the bargaining table.

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  7. Cardsfan says:

    This money isn’t shared at all?

    [grumbles]

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  8. Bert says:

    How can the Cardinals (with double the ratings) not expect to be even close to Seattle, Baltimore, DC, Houston (with double the populations)? Same # of eyes watching commercials, right?

    Also, San Diego, Denver, Minneapolis, St. Louis, and Kansas City are all pretty close in populations, for their Metros, how can they not expect similiar revenues?

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    • Aaron says:

      I would assume the valuation placed on a given viewership is based more on spending potential than on sheer numbers. The same number of people in Missouri might watch Cardinals games as Mariners fans in the Northwest, but the median income of those viewers is less (significantly in this particular comparison). The census bureau confirms here: http://www.census.gov/hhes/www/income/data/statemedian/

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    • Antonio Bananas says:

      You can’t just look at the metros. Look at TV coverage and competition. San Diego and STL might be close, but San Diego has a smaller reach (Cards TV coverage is something like 7 states), plus the Padres have the more popular Dodgers and Angels close by, STL has nobody close that’s been successful in the last 10 years. Not until you get to Chicago to their northeast, but that’s it. Nobody west, nobody south, nobody north, nobody directly east. Huuuuuge TV market for a historic fanchise that’s always good. The Cards could draw mega money once they renew their TV deal.

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    • Evan says:

      As I understand things, it’s less about the ratings and commercial rates than it is about the subscription fees. It doesn’t matter how many people are watching the team, as long as it is enough to force the cable providers to make all their subscribers pay the monthly fee.

      St. Louis isn’t a huge market and, from what I remember, has below average below average cable/satellite subscribers as a percentage of the population.

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      • randplaty says:

        That’s really interesting. Do you have a source where I can read more about that? That’d make a lot of sense regarding San Diego, which has traditionally been a low ratings TV market.

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      • cody k says:

        this is very likely right. This is the same thing that is driving the Big 10 expansion into Maryland and Rutgers. While Maryland is very likely to have the smallest following of devoted fans in the B10, adding them along with the already strong alumni ties of the other B10 schools will likely allow the B10 network to be able to force subscription fees on both the Baltimore and Washington DC markets…

        Ditto for Rutgers and the NYC market although given the overwhelming size of the market and low % of college football fans, it is less of a sure bet. Again, the B10 is banking on the already existing alumni of the other schools already creating a need and the Rutger addition is enough to take it over the top…

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      • Dave says:

        I agree that the per subscriber fees are a big part of it, but I’m still surprised that the Cardinals don’t do have a better contract.

        St. Louis metro is 2.8 million, which is mid-sized for an MLB market (19th largest U.S. MSA). The thing is thought, that the Cardinals have historically had a large regional following in all directions, as someone else said – north into central Illinois, Missouri outside of Kansas City, southern Indiana, parts of Tennessee, and Missouri, even into Oklahoma, east Texas, and Louisiana to some extent. The question I’d therefore have is if the Cardinals have enough demand to get the regional sports network with their games picked up in markets like Memphis (1.3 million metro area), Louisville (also 1.3 million), or Oklahoma City / Tulsa (1.3 million / 1.0 million metro areas). If you start adding in any of those cities, plus many smaller cities within 100 or 200 miles of St. Louis, that 2.8 million looks much bigger pretty quickly.

        I’d use Boston as an example where this sort of regional aggregation has worked. Boston metro itself is only 4.6 million. Sure, that’s bigger than St. Louis, but it’s only the 10th largest metro in the U.S. Because they also have a huge following across New England outside of Boston, they generate huge TV revenue.

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  9. Joewho112 says:

    One small not terribly important thing to note, is that Reinsdorf’s 40% stake in CSN is a result of him owning both the Bulls and White Sox. The White Sox’s stake is more like 20%

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  10. Doug Gray says:

    John Fay of the Cincinnati Enquirer reported that the Reds TV Deal was worth an estimated $10M per year as recently as March of this season. Not sure where you got the $30M number, but here is the article I referenced: http://news.cincinnati.com/article/20120324/SPT04/303240088/Can-Reds-keep-Votto-Phillips-

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  11. Chickensoup says:

    It’s going to beg the question, how do small market teams ever sign fairly priced free agents? Teams like the Brewers, Pirates, Royals etc have traditionally had to sign mid to low market, overpriced Free agents already, and while I personally think pretty much ALL free agents are overpriced per their production, television deals like this one distort this fact more than almost anything else.

    Deals like this are not good for true competitive balance for baseball. The more bloated team salaries there are, the higher the cost to keep a player is going to be, far less how impossible it will be for teams to sign free agents.

    Before anyone jumps down my throat about “competitive balance” I should probably define what I believe it is in my eyes by telling you what it is not. True competition should not be defined by a two or three year window where a bunch of good players enter the majors at the same time all signed to team friendly rookie contracts, while the team sells the farm to trade for some pitching or another bat in the middle of the lineup. This kind of up and down (and for some teams constant down)is bad for the game in the long run, and pretty much all small to mid market teams fall under this category (probably about half the league).

    Eventually the small market teams get their comeuppance when they operate in pretty much the only way they can compete when their big stars sign elsewhere to bloated contracts and their farm system is in shambles. It takes a long time (or luck, or drafting skill which is a crapshoot anyways) to get out of the hole on this.

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    • Jeff says:

      Just cause the Dodgers are making more TV money now doesnt mean thats the sole reason why your Pittsburg Pirates cant sign free agents. The reason the Royals and Brewers cant sign free agents is cause no one wants to live in Milwaukee or Missouri! Get used to it. Its always going to be like that unless the Atlantic ocean runs up against your borders.

      -20 Vote -1 Vote +1

      • Chickensoup says:

        You’re right, it has nothing to do with extra years and extra millions tacked onto salaries :)

        Wonder how the Packers, Chiefs and Steelers are able to do it….

        +13 Vote -1 Vote +1

      • Antonio Bananas says:

        Jeff, why would players even live where they play? Missouri isn’t THAT bad. In fact, a lot of players are hunters and really enjoy Missouri. A large portion of white players are southern boys who love their huntin’.

        I agree that some players wouldn’t want to. Like Pujols.

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  12. Jeff says:

    Heck ya! California dreaming baby! Get used to the West Coast dominating sports for the next half century. Dodgers/Angels/Lakers/Clippers/USC/UCLA/LA Kings/LA Galaxy/LA Sparks…holla!

    -34 Vote -1 Vote +1

  13. Justin says:

    I don’t know If I trust these numbers. I just read recently on MLB.com that the Brewers number is going up to $30 million starting in 2013 Thru 2019 Not the $12 Million being reported here.

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  14. Dan says:

    Wendy, what’s your source on the Brewers’ TV deal? This NY Times article says Milwaukee should see their revenue move to about $30 M/year starting in 2013.

    http://www.nytimes.com/2011/10/01/sports/baseball/mark-attanasio-goes-all-in-on-the-brewers.html?pagewanted=all&_r=0

    “The Brewers receive less than $10 million a year in the deal, and although that figure should triple starting in 2013, for now it is the lowest local media payout in the majors.”

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  15. 5w30 says:

    It’s truly Amazin’ what a crap deal the Mets have. Network was built on phony Madoff money, and the Mets majority owners had to go deep into debt to even get the network on. Now [according to the NY Times] they plan to go even deeper. http://www.nytimes.com/2012/10/06/sports/baseball/mets-and-sny-seek-banks-help-with-debt.html

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  16. Marver says:

    It’s a wonder how the Braves, operating on a horrible TV contract, manage to put up a significantly more impressive payroll than the Padres, despite the shiny $1.2 billion deal. For all the talk of the new deal, the Padres still had the lowest payroll in the league last season, have failed to resign their best player, and aren’t rumored to be interested in anyone you would associate with the word “good” unless you prefaced it with “used to be”.

    Moreso than television revenue, the most important thing for an MLB franchise is owner willingness to spend money rather than optimize profit. The Braves, at least, have that going for them.

    Vote -1 Vote +1

    • TKDC says:

      Yeah, I’m going to wait to complain too much until the payroll disparity becomes so large that they can only compete by hitting the jackpot with almost all young players happening to develop into stars at the same time (like the Rays). Right now the payroll is about in the middle. I don’t really care why.

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    • randplaty says:

      If the top revenue stream is $240-$280 million per year, the Padres $60 million per year is nothing. It fits right in with an extremely low payroll team. It’s just that they happened to cut their deal recently while other bigger market teams such as the Braves have not yet cut their deal. The Padres FO probably knows that their $60 million a year today is not going to permenantly give them any leg up in the payroll department.

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  17. Wendy Thurm says:

    I made a change to reflect information suggesting the Brewers deal is closer to $30m per year.

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  18. Jack Weiland says:

    That Astros expiration should say 2032, right?

    Vote -1 Vote +1

  19. Nick says:

    And Ned Colletti gets to decide how to spend those billions!!! What coul possibly go wrong?!?!

    +9 Vote -1 Vote +1

  20. G says:

    well done Wendy.

    +9 Vote -1 Vote +1

  21. Kinanik says:

    What happened to adjust the value of the TV ratings so much higher, the new market vs old market?

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    • cody k says:

      this isn’t the complete answer but a lot has to do with the invention and common use of the DVR. Now that many people use that to watch their television, they fastforward through commercials, making the ad time less valuable.

      Sports are the one entertainment on television that people almost always watch live consistently, which obviously greatly increases the value of ad revenue for live sports

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  22. Felonius_Monk says:

    ho ho

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  23. Daniel says:

    Can someone explain the economics behind TV deals? Why would a channel want to spend so much money on a single team? I understand that a larger audience should guarantee more viewers, but where is the money actually coming from? Is it cable subscription fees? Are those that different market-by-market? Is it advertising money? I’ve always been mystified by that concept–no one I know actually buys anything based on TV commercials. In fact, since I watch baseball every day and have to see the same commercials over and over again, I think I’m less likely to pay attention to companies that play their crappy commercials over and over again. My money into baseball is tickets and merchandise, which seems more stable considering how I think TV and entertainment is going to be changing over the next decade with the increase of internet-based content delivery (see MLB.tv for one)

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  24. channelclemente says:

    Fox is or has closed on a deal that gives them 80% of the YES network in 3 years as well.

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  25. Mr. Rogers says:

    Can you say “TV sports bubble”? I knew you could!

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  26. randplaty says:

    The fact that certain teams are locked into deals through 2017 or 2019 is not the end of the world. 4-6 years is nothing, and teams like the Cardinals and the Braves are going to get huge deals soon enough. I don’t think this list is the new inequality. Traditional TV market sizes are going to matter a lot more in the long run.

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  27. Tom says:

    Wendy – quick question on revenue sharing.

    Does 34% of the licensing money go into the revenue sharing pool? (for all teams)

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  28. Even if the Pirates had a better deal, that wouldn’t mean that Bottom Dollar Bob Nutting would actually invest that money back into his team.

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  29. Mike C. says:

    hell, just make it like European soccer. One varsity league and one JV league, with regulations dropping bad teams down and good teams up etc.

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  30. Pumpkin says:

    Good luck getting that $250 million dollars in 2037, I doubt cable TV will even exist by then. Nor should it when on demand, al a carte distribution via the Internet is already practical. MLB and the cable companies may get away with the racket for a decade, maybe two decades, longer but the end is coming. If it doesn’t it won’t be long until piracy makes its inroads into sports too. It’s already happening on the small scale and once the audience knows where to look it’ll be as popular as torrenting movies…

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  31. Will H. says:

    Why did the Astros get such a better deal than the Rangers? That seems absurd. As for this insane new landscape, it will just make it that much more expensive to buy cable whether you watch or not. It’s like when people say insane athlete salaries don’t bother them because, “hey, if the owners want to spend their money that way, good on them” when the reality is now that to pay for that largesse they have ticket prices much higher, hot dogs for six bucks and a Coors Light for eight. Once priced out of going to games I started to watch more on TV, but I guess now that will get more expensive for all of us as well.

    But does anyone have any clue why Fox Sports and the others are so gung ho to spend way more than in the past? Is baseball suddenly reversing decades long trends and bring in viewers?

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  32. Andy Mc says:

    Toronto being lumped together with mid and small market teams, and cities, is so ridiculous. Toronto alone is the fourth largest city in North America, with over 6 million population in the CMA. Toronto, in today’s economy, can and does CRUSH almost every single American City, outside NY, Chicago and LA, in any meaningful measure.

    Considering the state of the US economy, and the absolute power of Canadian commerce, y’all best to recognize.

    Y’all. LOL.

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  33. Jeff says:

    Toronto in a group with Detroit, Cleveland and Minnesota? Huh? Have you ever been to Minnesota? I saw a horse and carriage pass my hotel the last time i was there. Detroit?

    The Toronto market is a sleeping Giant for baseball, and its a travesty that Rogers has convinced people it is a small market. The TV rights alone, if put to auction between Rogers/Bell/Shaw/Other, would return at least $100m per year.

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  34. Jeff says:

    But Rogers can depress the perceived value of the Blue Jays media rights (and the team), by outright owning the team, the building and the television network, and operating them as separate business units. And as a public company, they can hide behind “fiscal responsibility” and shape the conversation anyway they wish.

    Now they will be hero’s, because they spent money in the Marlins trade. But the truth is, they’ve been banking money for a decade, and could have been competitive at any time.

    +5 Vote -1 Vote +1

  35. maqman says:

    34 percent of each teams local revenue goes into the MLB sharing pool, this includes revenue from local media rights sales. So each team will receive over $2.5 million from the Dodgers Fox deal every year. However, income from an equity interest in a RSN is not shared as it is a separate entity not subject to MLB control. Additionally each teams share of the national and international MLB rights is about to double, adding another $25MM in new income to every team. This has already inflated free agent costs and it’s going to get worse, probably by a bunch. Most teams could structure a back loaded deal and sign Hamilton or Grienke this off-season should they wish to.

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  36. Owens says:

    Just wondering where you got the numbers for the Rogers and the Blue Jays. A lot of us have been looking for that number for a while and it doesn’t seem to be out there. Rogers is a private company and doesn’t have to release any financial numbers at all. For Baseball revenue sharing and CBA reasons, I believe the league assigns a value on Toronto baseball rights rather than the actual number the team receives, as being fully owning both the team and network, they are just moving numbers on a page in the long run.

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  37. Kevin says:

    Wendy – How do you anticipate the O’s/Nats MASN dispute working out? Do you think it will be resolved this offseason?

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  38. Media Observer says:

    I think you can extrapolate the value of the Blue Jays RSN by comparing it to what the Bell / Rogers consortium is paying itself for Toronto Maple Leafs regional broadcasting rights in Ontario.

    Before this consortium bought MLSE ( Leafs/Raptors/ the local MLS soccer franchise owners) , much like the Dodgers, MLSE threatened to start it’s own RSN.

    MLSE then demanded a price of 1.5 million per game for the regional rights.
    The two main Canadian sports broadcasters then agreed to purchase MLSE
    jointly and share the broadcast properties, as neither party could envision losing out.

    It’s widely believed they will pay the Leafs ( again they are essentially now paying themselves since they both own the team $ 1 million per game for Ontario Leaf rights ). The real price value though, without the owner discount, would be in the 1.25 million range at the low end.

    In 2011/2012 an average of 788,000 viewers watched these Leaf broadcasts. In 2012 an average of 552,000 viewers watched the Blue Jays Canada wide on it’s 5 different RSN feeds ( the viewership was much higher until the Jays tanked in the second half).

    Using the Leafs valuation numbers you can get an idea how valuable each viewer is to broadcasters and their advertisers. The Jays in 2012 at 552,000 viewers per game would be worth $141,000,000 at these prices.

    These numbers seem to match up quite well with what other RSN contracts are being priced at with similar market sizes.

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  39. Tax Ninja says:

    Liberty Media bought the Braves back in 07 so they could take advantage of a $770 million dollar tax break. I don’t think they were that concerned about a below market value TV deal.

    http://www.bizofbaseball.com/index.php?option=com_content&task=view&id=1141&Itemid=42

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    • B N says:

      Somehow I think they should probably close that “cash rich splitoff” loophole. I have no idea why you would want to give massive tax breaks on the sale of stock, from a governmental point of view. Is there some big advantage to a more volatile market that I’m unaware of?

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  40. ralph nader says:

    I wonder if these kinds of contracts will lead to things like each inning sponsored by a different corporation. I mean, already the 15th out is sponsored by Geico! Imagine the possibilities!!!

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  41. George says:

    As an A’s fan…. ugh.

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  42. Pat says:

    The A’s are pwnd in the Bay Area. Nobody wants them, the best way for them to survive is to go to Utah, San Antonio or Vancouver. It’s much better fort the A’s to move to the MT Zone since there are NO AL TEAMS IN THAT TIME ZONE and there MUST BE ONE. The A’s will have a new growing fanbase in SLC Utah and finally get the Root Sports Utah with the Jazz. Face it, nobody in the Bay Area wants to see the A’s Anymore, since you will start to have a fanbase in the MT Zone besides Utah, you’ll have Idaho, Montana, Wyoming and New Mexico. Besides, I would rather have the A’s succeed in Utah or in San Antonio. THERE MUST BE AN AL TEAM IN THE MT ZONE SINCE THERE AREN’t Ant AL teams there, there needs to be one to cut down on travel times and jet lag.

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  43. Landscape Edging In Branson MoAre you thinking of building a backyard vegetable garden in the landscape borders and design

    http://www.landscapeborderz.com/residential-landscape-edging.

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  44. websoulsurfer says:

    The Padres TV contract started at $30 million per season including their equity and ramps up slowly from there. They dont pass $50 million per season until the 2020 season. They are still at the bottom of baseball in revenue as befits the 28th largest DMA.

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