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Home Pete Toms LWIB: Yankees and Red Sox Pioneer the "Out of Market" RSN

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Pete Toms Article Archive
Written by Pete Toms   
Monday, 13 September 2010 13:49

Last Week in Bizball by Pete Toms

This week in “Last Week in BizBall”, the Yankees and Red Sox pioneer the “out of market” RSN, plus a few attendance tidbits.

THE “OUT OF MARKET” RSN

Last month LWIB examined the growing importance of Regional Sports Networks (RSNs) to the bottom lines of MLB franchises. Either via owning their own RSN or selling their local TV rights, clubs are reaping huge revenues. LWIB, saw the Red Sox owned RSN, NESN, announce an “out of market” carriage deal with Time Warner Cable for “NESN National”. (NESN National is also available to DirecTV and Dish Network subscribers)

Time Warner Cable today launched NESN National on Time Warner Cable’s sports tier, SportsPass, throughout North and South Carolina. SportsPass is available to more than 2 million Time Warner Cable subscribers. NESN National is the national television service of New England Sports Network (NESN), a sports television network owned by the Boston Red Sox and Boston Bruins. Time Warner Cable customers in the Carolinas are the first cable subscribers to receive NESN National, which is the best way for fans outside New England to follow the Red Sox, Bruins and all New England sports, particularly those fans who also watch Red Sox and Bruins games through MLB and NHL league packages.

The “NESN National” offering copies the strategy implemented by the Yankees owned RSN, YES Network, last year. YES reached carriage deals last year for their “out of market” “YES National” last year with Bright House Networks (see here) and Verizon’s FiOS TV (see here). YES has since added more affiliates distributing their “YES National” offering. In May, YES announced deals with Mediacom, RCN and MetroCast. Mike Reynolds reported for Multichannel News that, “Mediacom, RCN and MetroCast join DirecTV, Verizon FiOS, Time Warner Cable, Bright House Networks, AT&T U-verse and Blue Ridge Communications, among others,in offering YES National,..” Officials from both NESN and YES Network have been quoted in industry reports that they have plans to further increase distribution of their “out of market” channels.

In order to protect MLB‘s “out of market” MLB.TV and Extra Innings offerings, neither NESN National nor YES National are allowed to broadcast live games. Nonetheless, cable, telcos and sat providers have agreed to carry the channels because of the value of the “shoulder programming” to the displaced Red Sox and Yankees fans amongst their subscriber base. How much revenue YES and NESN are earning from their “national” channels is unknown. Cable operators are placing them on far less widely distributed “sports tiers” and the subscriber fees being paid to YES and NESN have not been made public. Will this trend of “out of market” RSN channels grow further or will it be restricted to NESN and YES, both with easily the largest number of “displaced” fans in the country. In May, the SportsBusiness Journal’s media reporter John Ourand predicted that cable operators will want more “out of market” RSN programming.

“Sports tiers have not developed as quickly as cable operators would like,” said Matt Cacciato, YES Network’s senior vice president of affiliate sales and marketing. “What’s missing? The RSNs.”

AND

If cable operators are serious about trying to win back the avid sports fans who subscribe to DirecTV, they need to start by setting up a similar RSN tier. Out-of-market RSNs aren’t going to generate big revenue streams for anyone, but the local sports programming they provide is essential for cable operators to have if they want to be taken seriously as sports providers.

AND

How much would an out-of-market package of all 19 Fox Sports RSNs be worth to cable operators? What if you throw in Comcast SportsNet’s 11 RSNs? Wouldn’t a sports tier with just those 30 sports channels provide a compelling offering to the biggest sports fans?

In fact, sources said Comcast actually is looking into making its out-of-market RSNs available by late summer. With local news programming and talk shows to go along with pre- and postgame shows, Comcast believes a market exists among displaced fans who would pay for this kind of programming.

The emergence of the “out of market” RSN is the latest indicator of the value of MLB to video distributors. You don’t need cable or sat to watch your favourite TV programs, except sports, and in particular MLB. And MLB, with spring training, 162 regular season games along with their pre and post game shows and non stop off-season analysis provides more programming than any of the “stick and ball” leagues. Ignore the flat national TV ratings, there is plenty of demand for MLB.

ATTENDANCE TIDBITS

Padres attendance has been disappointing while local TV ratings have been strong. (So it says here) Ballpark Digest has the season end attendance figures for all MiLB franchises here.


Pete Toms is senior writer for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.

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