Friday, March 20, 2015
A report by the New York Post has fans thinking they may get an Opening Day gift of blackouts lifted for games streamed in-market saying, “Major League Baseball is expected to announce in the next few days a deal with a national distributor, like a wireless provider, to stream local games of every MLB team, a source close to the situation said Thursday.”
While nothing could likely make fans happier, the fact is as of today, that is simply not the case.
As we reported last week, in-market streaming of games is being thwarted by an inability of networks and/or distributors not wishing to allow MLB Advanced Media to also streaming games with them. The league’s media company wishes all three legs of be allowed to stream games, not just two. That would mean fans would be able to see their home teams streamed to mobile and internet devices through MLB.TV Premium, as well as an offering such as FOX Sports Go.
As we reported last week, the top executive for MLB on such matters highlights the position.
“Simply put, we believe in serving our fans with TV ‘everywhere’ and not TV ‘somewhere’,” said Bob Bowman, MLB’s president for business and media who formerly served as president and CEO of MLB Advanced Media in regards to having MLB.TV in the mix.
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?
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