Deadspin on new MLB bubble market of cable contracts

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  • Warner2BruceTD
    2011 Poster Of The Year
    • Mar 2009
    • 26142

    #16
    Originally posted by Senser81
    But if those same regional sports networks are holding out for more money from TV carriers like DirectTV & TimeWarner, then where is the money being made? Do the regional sports networks need to generate more advertising money during those baseball games? Or do they only make money through DirectTV carriers?

    It still seems weird...baseball teams being bought/sold for big bucks on the assumption of big TV earnings that have yet to happen, and sports channels holding out for big carrier fees that have yet to happen. And there is no unified MLB TV revenue sharing. The NFL model makes sense...TV gets advertising money during games, TV pays NFL teams to broadcast games. The MLB model is much more convoluted. I don't understand where the money comes from.
    It's a combination of both advertising & carrying fees.

    In the case of the Padres, they were one of the few teams still being aired by a local over-the-air channel (Channel 4 SD). I have no idea what kind of ratings the Padres do locally, but even if the ratings are shit, they are significantly higher than whatever FSN San Diego is airing. Have you seen what these FSN's air when they don't have games on? Honestly, I have no idea FSN San Diego even existed. The Padres are the only non-Chargers team in town, so FSN San Diego just quadrupled their ratings, and thus, will demand higher carrying fees, and the highest ad rates of they've ever seen, not only during Padres games, but across the board, based on the added exposure Padres baseball brings, which will lead to small bumps on the rest of their crappy programming. And remember, this is more than three hours per day in the summer. They will likely air a half hour pre game show, and an hour post game, meaning on some days you are now pushing SIX hours of double digit rating shares per day, when previously i'm sure FSN San Diego averaged less than a 1.0 share (probably the dreaded "asterisk" rating, which means so few viewers it cant be measured) from 6-12 on weeknights in the summer (remember, this is also primetime).

    Baseball is a big deal locally, much more so than NBA or NHL, which also do well for these regional outlets, but nothing like baseball, because baseball is also double the games. Plus, in the case of the NBA, the local FSN's lose a ton of viewers to ESPN & TNT. Baseball fans are far more loyal to their home team and ESPN baseball ratings are shit.

    I think FSN San Diego will make that $1.2B back over 20 years easily. The idea that the Padres stink means nothing. Odds are, they aren't going to be terrible for 20 years. They nearly made the playoffs in 2010, and baseball has expanded the playoff format.

    Comment

    • Senser81
      VSN Poster of the Year
      • Feb 2009
      • 12804

      #17
      Originally posted by Warner2BruceTD
      Baseball is a big deal locally, much more so than NBA or NHL, which also do well for these regional outlets, but nothing like baseball, because baseball is also double the games. Plus, in the case of the NBA, the local FSN's lose a ton of viewers to ESPN & TNT. Baseball fans are far more loyal to their home team and ESPN baseball ratings are shit.
      But you are just talking about ratings. And they are local ratings, at that. My question is, how much money can you make from local advertising? I don't think it would nearly be enough to justify the Padres purchase price.

      Comment

      • FedEx227
        Delivers
        • Mar 2009
        • 10454

        #18
        It not the ad revenue that makes these contracts so ridiculous but rather the forced payment by everybody who has cable in that team's market. The ad revenue is just the cherry on top.
        VoicesofWrestling.com

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        • Warner2BruceTD
          2011 Poster Of The Year
          • Mar 2009
          • 26142

          #19
          Originally posted by Senser81
          But you are just talking about ratings. And they are local ratings, at that. My question is, how much money can you make from local advertising? I don't think it would nearly be enough to justify the Padres purchase price.
          The price of the Padres jumped $300M after the FSN deal, which to me is still a bargain for the new owners. I mean, like the article says, FSN already paid $200M of that $1.2B up front, which was a sticking point in the sale of the team.

          I think a few teams may get burned when FSN or whoever else can't fulfill their end of these gigantic contracts, because you will inevitably see bidding wars in some markets. But who was FSN San Diego competing with? Local TV 4? I'm not privy to ad rates and such, but I would have to think this was a good deal for all sides, especially since FSN San Diego just went from barely existing to a real ratings player in that city.

          Comment

          • Glenbino
            Jelly and Ice Cream
            • Nov 2009
            • 4994

            #20
            When you watch an out of market game on MLB.tv do you get local commercials during the breaks or nothing at all? I shudder at the thought of one day having to pay a fee to watch every Angels game when it seems like just a year or two ago the majority of their games were on the smaller over-the-air TV affiliates out here.

            I knew the day would come but it's sad that it has come to having to pay to watch any pro sports in your own home these days.

            Comment

            • FedEx227
              Delivers
              • Mar 2009
              • 10454

              #21
              No ads. Just a "Game is in commercial" message.
              VoicesofWrestling.com

              Comment

              • Glenbino
                Jelly and Ice Cream
                • Nov 2009
                • 4994

                #22
                Originally posted by FedEx227
                No ads. Just a "Game is in commercial" message.
                That's a huge hole IMO. I'm surprised MLB hasn't capitalized on it since they seem to be in the front of the pack in terms of monetizing and protecting their coverage in the online sphere.

                Comment

                • Warner2BruceTD
                  2011 Poster Of The Year
                  • Mar 2009
                  • 26142

                  #23
                  Originally posted by Glenbino
                  When you watch an out of market game on MLB.tv do you get local commercials during the breaks or nothing at all? I shudder at the thought of one day having to pay a fee to watch every Angels game when it seems like just a year or two ago the majority of their games were on the smaller over-the-air TV affiliates out here.

                  I knew the day would come but it's sad that it has come to having to pay to watch any pro sports in your own home these days.
                  On the Extra Innings cab/sat package, you get the commercials.

                  I was reading something on a blog the other day, talking about how YES Network was going to start reaching out to national advertisers, using the argument that there are hundreds of thousands of out of market Yankees fans who watch the YES broadcasts of Yankees games on Extra Innings.

                  Comment

                  • spiker
                    Beast mode
                    • Apr 2011
                    • 1625

                    #24
                    Originally posted by FedEx227
                    I don't have the numbers in front of me, but that is true. White Sox attendance numbers are usually pretty awful, but I've heard multiple times that their television ratings are through the roof.
                    It's such a pain in the ass to get down there on a weeknight. Fuck me if I want to sit in traffic on 290 for an hour only to pay $30 for parking and show up by the 3rd inning. I'm probably representative of many suburban White Sox fans.

                    Comment

                    • FedEx227
                      Delivers
                      • Mar 2009
                      • 10454

                      #25
                      I'm right with you, sir. I'm right next to you in Lisle and it's a nightmare.
                      VoicesofWrestling.com

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