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Saturday, January 04, 2014

Brisbee: The Phillies’ new TV deal and the Raysification of the Atlanta Braves

You can call them Rays or you can call them A’s, but don’t call them helpless. If there’s a team that should instill confidence in their fans, the Braves are up there. Baseball players are cheap for the first six years of their big-league lives; find the good young players and you don’t need money. The Braves are adept at finding the good young players. They have been for a couple decades.

But the money from the Phillies deal shows just how far behind the Braves are in television revenue. Imagine if the Braves had that money. Imagine if, in addition to their current roster, they could waltz into the free-agent Stuckey’s and come home with a Robinson Cano. They would be monsters.

Instead, they’re just really, really good. And smart. They’ll have to stay that way, too, because they aren’t getting rich.

Nothing new here for folks who follow the division and the Braves closely. This is, of course, why that new stadium deal in Cobb County is so important to the franchise.

Rickey! trades in sheep and threats Posted: January 04, 2014 at 11:04 AM | 33 comment(s) Login to Bookmark
  Tags: braves, nl east, phillies, tv contracts

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   1. Ivan Grushenko of Hong Kong Posted: January 04, 2014 at 12:27 PM (#4629907)
I get that the Cobb County stadium would increase stadium revenues, but how would it help TV revenues? The article seems to be about TV revenues, taking the position that those are the most important.
   2. jacjacatk Posted: January 04, 2014 at 12:29 PM (#4629913)
Liberty Media made $1.4B in profit in 2012, and is on pace to make a similar amount in 2013 if I'm reading their financials correctly and properly understanding the "unusual income" items from the first half of the year. If the Braves don't have a TV deal to match the Phillies or other teams, I'd be incredibly surprised if that weren't more of an accounting trick than anything real.

Nevermind the ludicrous idea that the Braves need a new tax-payer funded stadium. If they wanted to sign Cano, they could have, and they probably could have even gotten Cobb county to furlough some more teachers to pay for it.
   3. DA Baracus Posted: January 04, 2014 at 12:51 PM (#4629935)
If the Braves don't have a TV deal to match the Phillies or other teams, I'd be incredibly surprised if that weren't more of an accounting trick than anything real.


They don't. It really is that terrible.
   4. Rickey! trades in sheep and threats Posted: January 04, 2014 at 01:18 PM (#4629966)
I get that the Cobb County stadium would increase stadium revenues, but how would it help TV revenues? The article seems to be about TV revenues, taking the position that those are the most important.


It won't increase TV revenue. Nothing will increase the Braves' TV revenue barring some sort of miracle of a renegotiation of their existing 25 year contract (about 10 years into that deal now.) The Braves are locked into one of the worst tv/radio deals in the league because before Ted Turner/Warner Brothers cashed out they signed a really cheap sweetheart deal with their broadcast partners. The stadium revenue is an alternative income stream to offset the fact that they don't have a TV/radio deal anywhere near the current market of their competitors.

If the Braves don't have a TV deal to match the Phillies or other teams, I'd be incredibly surprised if that weren't more of an accounting trick than anything real.


Then prepare to be incredibly surprised.

Nevermind the ludicrous idea that the Braves need a new tax-payer funded stadium.


Funding for the new stadium build is tangential to the question of income streams.

If they wanted to sign Cano, they could have, and they probably could have even gotten Cobb county to furlough some more teachers to pay for it.


Yes, if John Malone suddenly stopped being John Malone and started being a Steinbrenner or 1990's era Ted Turner, they could shop on the market as is. John Malone is really, really rich. He is also really, really uninterested in running the Atlanta Braves as anything other than a subsidiary of his money making enterprises and has shown consistently over the last 10 years that he has no interest whatsoever in increasing the Braves' payroll out of Liberty Media's profit margins. If you doubt this fact, take a simple look at how much of the new shared national broadcast revenue the Braves are being allowed to commit to signing players this winter.
   5. jacjacatk Posted: January 04, 2014 at 01:44 PM (#4629990)
Yes, if John Malone suddenly stopped being John Malone and started being a Steinbrenner or 1990's era Ted Turner, they could shop on the market as is. John Malone is really, really rich. He is also really, really uninterested in running the Atlanta Braves as anything other than a subsidiary of his money making enterprises and has shown consistently over the last 10 years that he has no interest whatsoever in increasing the Braves' payroll out of Liberty Media's profit margins. If you doubt this fact, take a simple look at how much of the new shared national broadcast revenue the Braves are being allowed to commit to signing players this winter.


I don't doubt this, but assuming it's the case, increasing the Braves revenues via a bigger TV deal (or stadium revenues, or whatever) isn't particularly likely to change things. It'd just end up padding Liberty's bottom line.
   6. puck Posted: January 04, 2014 at 01:55 PM (#4629999)
The Philly contract is another huge one...about a $100 million yr? Though I guess the Dodgers' deal dwarfs it. (Wasn't that one more like $7 billion for 25 years?)

Which teams have made new "mega" deals?

Rangers
Angels
Dodgers
Phillies
Plus I assume the Yankees, Mets, Jays and Red Sox are doing well.

That Bloomberg infographic from last year has the Braves doing pretty well in "media rights" at $103M/yr, fwiw.
   7. DA Baracus Posted: January 04, 2014 at 02:00 PM (#4630002)
Nevermind the ludicrous idea that the Braves need a new tax-payer funded stadium.


The Braves didn't move because they need a new stadium. They wanted more revenue, and with 15 years left in their awful TV contract and their stadium lease expiring, they took the only option available to them: moving to a new stadium that would give them more money.
   8. DL from MN Posted: January 04, 2014 at 02:01 PM (#4630003)
I don't believe the 25 year cable TV deals anyway. Who thinks cable TV will still be around in 2039?
   9. Robert in Manhattan Beach Posted: January 04, 2014 at 02:03 PM (#4630005)
I don't doubt this, but assuming it's the case, increasing the Braves revenues via a bigger TV deal (or stadium revenues, or whatever) isn't particularly likely to change things. It'd just end up padding Liberty's bottom line.

Winner!

Expecting any new revenue streams to go to the payroll is really optimistic. And it wouldn't be me if I didn't say that allowing Frank Wren to sign free agents is not at all likely to improve the team's on the field performance.
   10. McCoy Posted: January 04, 2014 at 02:08 PM (#4630008)
Expecting any new revenue streams to go to the payroll is really optimistic.

Why? It always has.
   11. DA Baracus Posted: January 04, 2014 at 02:13 PM (#4630012)
Why? It always has.


Ownership doesn't give a ####.
   12. jacjacatk Posted: January 04, 2014 at 02:14 PM (#4630014)
The Braves didn't move because they need a new stadium. They wanted more revenue, and with 15 years left in their awful TV contract and their stadium lease expiring, they took the only free option available to them: moving to a new government entity that would give them more money.


Fixed that for you.
   13. DA Baracus Posted: January 04, 2014 at 02:18 PM (#4630017)
Well it's not free, but it's a great investment for them.
   14. Mike Webber Posted: January 04, 2014 at 02:32 PM (#4630028)
It won't increase TV revenue. Nothing will increase the Braves' TV revenue barring some sort of miracle of a renegotiation of their existing 25 year contract (about 10 years into that deal now.) The Braves are locked into one of the worst tv/radio deals in the league because before Ted Turner/Warner Brothers cashed out they signed a really cheap sweetheart deal with their broadcast partners.


So did they essentially did this as part of the purchase agreement?
   15. jacjacatk Posted: January 04, 2014 at 02:34 PM (#4630031)
http://saportareport.com/blog/2013/08/impact-study-atlanta-braves-a-100-million-home-run-for-economy/

The Braves' own projections for the team's economic impact (staying in Turner Field) for the City and State was ~$170M over 20 years. Cobb County is floating $300M up front, which isn't ever going to be made up by the revenues gained from the team's move, and they're also going to be on the hook for capital maintenance until the next time the Braves move.

Never mind that Liberty Media could afford to build the stadium completely on their own, and if it's a good investment for them they should be willing to do so. It's only a good investment, because they don't have to pay the full costs.

And that's all before we consider the externalities involved with putting a stadium at the junction of 75 and the perimeter. Whoever thought that was a good idea needs to put down the crack pipe.
   16. Swedish Chef Posted: January 04, 2014 at 02:36 PM (#4630032)
I don't believe the 25 year cable TV deals anyway. Who thinks cable TV will still be around in 2039?

I don't see why that would be a bother for the selling party.

And if cable is migrating to the internet, controlling desirable content is so much more important to the channel to get their viewership to follow them as they shift delivery mechanism.
   17. DA Baracus Posted: January 04, 2014 at 02:40 PM (#4630036)
Preaching to the choir Bill. We've gone over this quite a bit.
   18. DL from MN Posted: January 04, 2014 at 02:44 PM (#4630039)
controlling desirable content is so much more important to the channel to get their viewership to follow them as they shift delivery mechanism


I thought internet streaming rights were controlled by MLB.com. I would doubt the new contract includes rights to stream games online.
   19. pthomas Posted: January 04, 2014 at 02:52 PM (#4630044)
probably could have even gotten Cobb county to furlough some more teachers to pay for it.


If only teachers had better TV ratings.
   20. Rickey! trades in sheep and threats Posted: January 04, 2014 at 02:53 PM (#4630046)
Bill, you seem to be under the mistaken impression that Cobb County's finances or traffic at the top end Perimeter is something I care about.
   21. BDC Posted: January 04, 2014 at 02:58 PM (#4630052)
Who thinks cable TV will still be around in 2039?

Not me, but I'll be damned if I get a holographic imaging chip installed in my brain so that I can watch the Atlanta Braves.
   22. jacjacatk Posted: January 04, 2014 at 03:06 PM (#4630058)
Bill, you seem to be under the mistaken impression that Cobb County's finances or traffic at the top end Perimeter is something I care about.


I don't expect anyone who's not a Cobb County resident to care about Cobb's finances, and obviously neither did the Braves (and they clearly made the right call there), but if you're planning on attending a game in Cobb County in the future, I wish you luck with the traffic. Making that drive at game time without the stadium there is awful, might as well park on the shoulder and walk once it's built.
   23. DA Baracus Posted: January 04, 2014 at 03:16 PM (#4630062)
if you're planning on attending a game in Cobb County in the future


The one upside to the Braves moving is that I'll be saving a lot of money by no longer going to games.
   24. Rickey! trades in sheep and threats Posted: January 04, 2014 at 03:19 PM (#4630064)
I'll get to the games in more or less the exact same time with more or less the exact same traffic headache as before. 75N v 75S. Potato, potahto.
   25. jacjacatk Posted: January 04, 2014 at 03:30 PM (#4630073)
I haven't had to drive in the 75/Howell Mill area regularly for years, but it sucked then, and I really can't imagine that northbound 75 traffic (and alternate routes) isn't going to be pretty well boned on game days, too. You'll still be compounding rush hour with game day in ways that Turner doesn't and without any real public transportation alternative.
   26. Rickey! trades in sheep and threats Posted: January 04, 2014 at 03:38 PM (#4630075)
haven't had to drive in the 75/Howell Mill area regularly for years, but it sucked then, and I really can't imagine that northbound 75 traffic (and alternate routes) isn't going to be pretty well boned on game days, too.


I doubt the backup going north from Moore's Mill (I rarely take Howell Mill to/from the interstate any more, not since the Walmart/Kroger light screwed up traffic royally there) to Galleria is going to be notably worse than the traffic going from Northside to the Turner Field exits on game day. I could be wrong, but I doubt it.

You'll still be compounding rush hour with game day in ways that Turner doesn't and without any real public transportation alternative.


How so? You're just moving the gigantic cluster of game day traffic off of 75S and 20 to 75N and 285.
   27. Mike A Posted: January 04, 2014 at 03:42 PM (#4630079)
I timed the drive out from the Northern 'burbs and it looks like the new stadium will save me about 10-15 minutes each way. The Braves didn't make this plan without considering the travel time of their main ticket base (ie the Northern 'burbs). It does suck to lose public transportation 'access,' but MARTA always took me longer to get to Turner anyways.

As for the TV deal, it just kills me. Especially since it was a wink-wink nudge-nudge say no more deal that Turner Broadcasting made just before selling the team. It probably shouldn't have been approved, and really hamstrings the Braves going forward.
   28. Rickey! trades in sheep and threats Posted: January 04, 2014 at 03:49 PM (#4630083)
As for the TV deal, it just kills me. Especially since it was a wink-wink nudge-nudge say no more deal that Turner Broadcasting made just before selling the team. It probably shouldn't have been approved, and really hamstrings the Braves going forward.


Agreed on all points. The upside is that we're already 10 years into it, so it's a 15 year deal at this point. That still doesn't change the math in the NL East or the NL or MLB; the Braves are the A's and Rays now. It's sad, because they are obviously smarter baseball men than their competitors (for the most part) but the finances are killing them.
   29. TerpNats Posted: January 04, 2014 at 06:24 PM (#4630187)
That still doesn't change the math in the NL East or the NL or MLB; the Braves are the A's and Rays now. It's sad, because they are obviously smarter baseball men than their competitors (for the most part) but the finances are killing them.
The Nationals (hey, there's a third competitor in this division!) are in a similar boat as the Braves, because they're hamstrung by Cuban Pete's MASN deal. Put the Nats' rights on the market -- possibly to Comcast, which already has a D.C.-based sports channel, possibly to a new outlet funded by Fox -- and a middle-revenue team becomes at, or close, to a top 10 franchise finally speaking, commensurate with Washington's size, demographics and economic heft.
   30. bigglou115 Posted: January 04, 2014 at 06:48 PM (#4630199)
It's silly to say the Braves are the As or Rays yet. The article specifically pointed out the Braves have held at about the midpoint in league salary, and they'll likely continue to do so for at least a few more years.
   31. Bhaakon Posted: January 05, 2014 at 02:47 AM (#4630379)
The article specifically pointed out the Braves have held at about the midpoint in league salary, and they'll likely continue to do so for at least a few more years.


No, it points out that they've fallen back to the midpoint from near the top, and predicts that they'll fall further as the rest of the league gets richer and richer off local TV money.
   32. Swedish Chef Posted: January 05, 2014 at 05:22 AM (#4630390)
I thought internet streaming rights were controlled by MLB.com. I would doubt the new contract includes rights to stream games online

They own it out-of-mrket. They're not stupid to write the contracts narrowly. I know YES did experiments with in-market streaming, don't know if they still do.

   33. donlock Posted: January 05, 2014 at 11:26 AM (#4630455)
Not sure either team in the DC/Baltimore market is going to get a blockbuster TV deal. The markets overlap and are hemmed in by geography. DC market has so far not been a big TV one. Hard to graft lifetime tv habits onto a new team's fans.Nats/O's don't seem to fit the demographics of the teams signing mega deals

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