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Thursday, July 31, 2014

The Dark Side of Booming Local TV Deals

But who wants to watch Astros games anyway?

It turns out that big local TV contracts aren’t always good news for teams either. That has turned Selig’s mood quite sour.

When a regional sports network agrees to pay millions of dollars to an MLB team, that RSN has two principal ways to recoup that investment: (1) sell ads during the game broadcasts; (2) charge a carriage fee to the cable and satellite operators in the region who want to carry the RSN. But what happens when the cable and satellite companies balk at the carriage fees?...

Comcast SportsNet Houston launched in October 2012 and, since then, has been seen only by Comcast cable customers. The new RSN – a joint venture among the Houston Astros, Houston Rockets and Comcast Sports Group — couldn’t come to agreement on carriage fees with any other cable or satellite company in the region. With the RSN bleeding cash, Comcast forced the venture into bankruptcy court last September, where the parties have been fighting ever since. Astros owner Jim Crane also sued Comcast and former team owner Drayton McLane for fraud in the sale of the team. That did not make Bud Selig happy at all.

That brings us to the Los Angeles Dodgers. As I explained before the season started:

SportsNet LA launched in February with around-the-clock Dodgers programming, but only customers with TWC or Bright House can view the network in their homes.Every other cable and satellite operator in the Los Angeles market has balked at the network’s carriage fee demand. And TWC hardly counts as an arms-length agreement, as it is the Dodgers’ broadcast partner in SportsNet LA. Indeed, TWC will essentially pay itself the carriage fee for SportsNet LA, and then pay the Dodgers their monthly rights fee as part of the 25-year, $8.3 billion megadeal.

No deal’s been reached. A vast majority of Dodgers fans in LA missed Josh Beckett’s no-hitter, Clayton Kershaw’s no-hitter and every Yasiel Puig bat flip — unless they watched with a friend or at a bar with TWC. Even Vin Scully is without Dodgers’ broadcasts when he’s at home during the team’s long road trips.

RoyalsRetro (AG#1F) Posted: July 31, 2014 at 07:50 PM | 12 comment(s) Login to Bookmark
  Tags: astros, dodgers, nationals, orioles, padres, television, tv contracts

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   1. Harveys Wallbangers Posted: August 01, 2014 at 06:46 AM (#4762340)
interesting article
   2. boteman is not here 'til October Posted: August 01, 2014 at 08:13 AM (#4762349)
So the gist is that Hizzonerforlife Bud has built this ticking time bomb, with he and everyone else smiling at all the money washing through baseball land. But as retail entertainment operators and even their customers balk at paying the ever-increasing fees, I wonder if after his (anticipated) departure things start to go "BOING!" in certain TV markets around the country?
   3. Dale Sams Posted: August 01, 2014 at 09:10 AM (#4762362)
"Baseball goes BOING?"
   4. The Robby Hammock District (Dan Lee) Posted: August 01, 2014 at 09:12 AM (#4762364)
Baseball’s commissioner told Pittsburgh Pirates broadcasters that he got “goosebumps” watching the Reds and Pirates square off in last year’s postseason.
Yeah, it was totally wild watching the Reds play in the postseason. I mean, they'd missed the playoffs once in the previous four years.
   5. bobm Posted: August 01, 2014 at 09:22 AM (#4762368)
I assume teams still make these deals for an equity stake in the TV network because, unlike the rights fees, their share of the carriage fees get shielded from revenue sharing. The teams listed in this story all have widely varying stakes in their RSN as a percentage of the total ownership.
   6. Howie Menckel Posted: August 01, 2014 at 10:08 AM (#4762388)

The Yankees' 2002 season on the fledgling YES Network did not appear on Cablevision, at a time when satellite TV was far less prevalent, to the chagrin of Long Island and North Jersey among other places. same sort of "balking at the price of showing the games."
   7. Bhaakon Posted: August 01, 2014 at 10:58 AM (#4762429)

So the gist is that Hizzonerforlife Bud has built this ticking time bomb, with he and everyone else smiling at all the money washing through baseball land. But as retail entertainment operators and even their customers balk at paying the ever-increasing fees, I wonder if after his (anticipated) departure things start to go "BOING!" in certain TV markets around the country?


That fool, he should have ordered the teams to pass on those poisonous billions.
   8. The Id of SugarBear Blanks Posted: August 01, 2014 at 11:01 AM (#4762431)
Cable prices and carriage fees are a bubble that will pop. They can't last.
   9. DL from MN Posted: August 01, 2014 at 11:14 AM (#4762440)
Is MLB.tv killing some of these cable deals? I get a free game every day and that is plenty of baseball for me. I'm not bothered that I can't watch the local team.
   10. RoyalsRetro (AG#1F) Posted: August 01, 2014 at 11:21 AM (#4762447)

Is MLB.tv killing some of these cable deals? I get a free game every day and that is plenty of baseball for me. I'm not bothered that I can't watch the local team.


I'm guessing that is only being purchased by hard-core fans. Most casual fans are content to watch the local nine on their RSN.
   11. David Nieporent (now, with children) Posted: August 01, 2014 at 11:23 AM (#4762449)
Cable prices and carriage fees are a bubble that will pop. They can't last.
I don't think you understand what a bubble is.
   12. Barry`s_Lazy_Boy Posted: August 01, 2014 at 12:06 PM (#4762487)
woops.

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