Baseball Is Dying Newsbeat
Tuesday, April 21, 2015
MLB Advanced Media, which has arguably the country’s most extensive and experienced broadband network for streaming live video, has been around since 2000 and is equally owned by the 30 MLB clubs. In addition to streaming most baseball games (more on that later), it handles the back-end duties for myriad other major sports. BAM, as it’s known in industry parlance, powers ESPN’s watch-anywhere app. It runs Turner Sports’ March Madness streaming. The World Wrestling Entertainment Network contracts out its $10-a-month service into BAM’s capable hands. Sony depends on BAM for PlayStation Vue streaming service. While the NFL is giddy about streaming a game on YouTube next season and the NBA’s League Pass service can’t even get all of its games into high-def, MLB is serving up 60 million streams on its Opening Day—a 60 percent bump from a year ago—with nary a hitch.
But they told me baseball is dying!
I do hope that MLB doesn’t spin off MLBAM, while it’s worth billions right now it doesn’t seem to have suffered at all by being under the 30 team’s collective ownership.
Thursday, March 19, 2015
Illegal streaming hurts Max Scherzer.
Next time you think about tuning in to your local regional sports network for a game, remember that you could be helping your team pay for the free-agent contract of David Price, Jordan Zimmermann or Matt Wieters. Local deals average more than $60 million in annual revenue per team—that’s a full 25 percent of revenue (and at least one or two big free-agent signings).
But a revenue problem looms, if cable’s bundling packages fade away and subscribers can go a la carte, picking and choosing the channels they pay for and receive. Many teams have long-term contracts with their regional sports networks, which are funded by monthly carriage fees: 11 of the 30 regional contracts are through 2030 and beyond. Those fees are paid by all subscribers to a carrier, even if only a small fraction of them are watching the games.
For example, the Texas Rangers will make about $115 million this year from Fox Sports Southwest, which has 2.7 million subscribers but only 58,000 average viewers per Rangers game. That’s 2.2 percent of the subscriber base. The chances that the Rangers could earn $115 million in paying subscriptions are next to none without asking viewers to pay an exorbitant monthly fee. So in Texas, if even five times the number of average viewers decided to pay for the channel, they’d have to pay almost $400 a year.
MLB teams making these deals face big questions. Are the annual payouts, like the $340 million Time Warner Cable promised the Dodgers, doomed to disappear if subscribers won’t pay? What happens if teams sign players with money partly wrapped up in TV deals—money that disappears if/when cable goes a la carte?
for his generous support.
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