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Monday, March 20, 2023

Why MLB Feels RSN Pinch More Than Other Leagues

Local media, including radio, is 23% of MLB team revenue. It is the third biggest revenue stream after central revenue and tickets, but it is by far the biggest exposure to regional sports networks of any major U.S. sports league, and the NBA’s 13% of revenue will dip further when its next national TV deals commence in 2025. Most MLB teams are in the 18% to 25% range, but the two Los Angeles franchises lean on local media for more than 30% of their revenue after netting out their revenue sharing payments….

Baseball RSN ratings were and still are elite. Last season, it was the No. 1 programming in primetime on cable in 22 of 29 markets and 13 out of 29 when including broadcast networks, according to Nielsen (Toronto data is not available). But MLB is facing a reckoning accelerated by Diamond Sports’ $8 billion debt load. The company owes $1.92 billion in rights fees in 2023 with roughly 55% earmarked for baseball, but it skipped its $140 million debt payment in February, telegraphing last week’s bankruptcy filing.

Baseball’s audience skews older than other U.S. leagues, and the league is hoping a revamped distribution model that allows fans to access games through multiple platforms will allow it to reach a younger audience that skews higher on cord-cutters.

“The content has not suddenly gone from being valuable to being valueless,” Ed Desser, a media consultant who has negotiated more than 70 sports rights deals, said in a phone interview. “Baseball will figure out new ways to monetize it, and there are advantages to a streaming world as it allows you to have more of a direct relationship with your consumer.”

RoyalsRetro (AG#1F) Posted: March 20, 2023 at 04:38 PM | 7 comment(s) Login to Bookmark
  Tags: regional sports networks

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   1. Walt Davis Posted: March 20, 2023 at 05:33 PM (#6120840)
If there's no money in cable anymore then put it back on broadcast TV. Not that there's money there either but clearly the market reach is still greater. (It would be nice to add the data on #1 in 13 markets, #2 in another X markets. And I wonder how much of that is summer when there's nothing else on anyway.)

They've been kicking the local DTC streaming can down the road for over a decade now. If MLB had shareholders in the traditional sense, they should all be pissed off that they don't have some solution ready to go.
   2. The Duke Posted: March 20, 2023 at 05:48 PM (#6120844)
The common wisdom is that it's still hugely valuable but not as valuable as these franchises thought. It will depress salaries again next winter while everyone is trying to figure it out. The cardinals trumpeted that they would spend significantly more money this year and their spending came to a screeching halt when the RSN news hit. They are spending like $8.23 more than last year and claiming they made good on their promise.
   3. RoyalsRetro (AG#1F) Posted: March 20, 2023 at 10:40 PM (#6120874)
OTOH, the Diamondbacks are one of the first teams to be impacted by this, and they just spent $111M on a player.
   4. Walt Davis Posted: March 21, 2023 at 04:30 PM (#6120961)
As we've discussed elsewhere, it's bad but it's not necessarily OMG bad. The numbers in that first paragraph suggest it's even less OMG bad than I thought.

Most MLB teams are in the 18% to 25% range

The low rights teams will be below that 18% though. They're getting $230 in common and shared revenue plus half their local revenue (tix, media rights, etc.) so they're at a min around $280 M in total revenue, I'd guess more likely $300. But we're talking cable deals in the $30-50 M range at the low end of the market. They're probably around 14-15% of total revenue.

Now if the DBacks have gone from $30 M to $0 then obviously a 15% revenue drop hurts bad. But if they've gone from $30 to $20 then it's a 5% drop in revenue of which they were only keeping 2.5%.

At the broader level, obviously the DBacks aren't alone but if it's a drop of $10 M each for 6 teams that's just a $2 M hit across all 30 teams so maybe the common/shared revenue payments are $228 M instead of $230 M. And in the short term, MLB can redirect Cohen's lux tax payments to help out the struggling teams.

Now if the Angels' $130 M deal (from memory) is now worth $65 M and similar for Dodgers, Cubs, Yanks, etc. then that's a big problem. But it is a sport where average team revenue is up to about $375-400 M while almost nobody runs a MLB payroll over $230 M and otherwise a baseball team is a pretty small business with mainly low/average-paid employees in an industry where nobody's gone bankrupt in a century. There is zero chance the DBacks are going to miss their $130 M (total) payroll payments much less the A's struggle to meet their $75 M obligations.
   5. Jameson Posted: March 24, 2023 at 09:46 AM (#6121249)
When it comes to the design, there are many options available. Some bucket toilet seats come with a standard design, but you can also find ones that have a unique pattern or design. Once you’ve decided on a style, you’ll also need to consider how easy it is to install and maintain.
   6. ERROR---Jolly Old St. Nick Posted: March 24, 2023 at 11:24 AM (#6121255)
I see that Kirstie819 has a brother.
   7. ERROR---Jolly Old St. Nick Posted: March 24, 2023 at 11:25 AM (#6121256)
Double post

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