Yesterday’s “Last Week in BizBall“ was longish, so I omitted the weekly tidbits. But now, here they are.
- Daniel Kaplan reported that the Diamondbacks secured $140 million of financing. The team refinanced a $60 million credit facility, bought back $45 million of bonds which had been sold to finance construction of their ballpark and obtained a $35 million seasonal line of credit. The club should save $12 million because, “The original bonds carried a rate of nearly 7 percent; the new, five-year financing charges the team 3 percent.” Kaplan notes that this is the first club borrowing governed by the new CBA’s debt rules. Teams can now borrow up to 8 times their cash flow as opposed to the 10 times under the previous CBA. Although, when it comes to borrowing money in MLB, the rules appear to be, shall we say, quite discretionary. For example, the New York Mets, reportedly already several hundred million dollars in debt, recently received approval from MLB to borrow another $40 million in bridge financing. In February I asked, Is Selig to Blame for Franchise Debt Problems in MLB?
- Cynopsis Media brought to my attention that, “MLB Network announced that the channel saw the largest universe growth of any cable network since January 2011, with distribution growing from approximately 55 million to over 67 million cable, satellite and telco homes, according to Nielsen estimates. The additions of Dish Network and AT&T U-verse in 2011 helped bolster numbers, as MLB Network launched with approximately 40 new affiliates in 2011.” By comparison, NFL Network is in approximately 57 million homes. However, MLB Net’s distribution has been bolstered by the minority stake in the channel shared by the cable and sat industry while NFL Network is owned outright by the NFL. Monthly subscriber fees for NFL Network are reportedly $0.81 while MLB Network charges $0.26. MLB Net has value to MLB beyond the revenue it generates. The option of programming more live games, particularly playoff games, on MLB Network is a valuable bargaining chip for the league in their upcoming national TV rights negotiations.
- The Triple A Scranton/Wilkes-Barre team is facing a tough grind this upcoming season. Because their home field, PNC Field, will be closed for the entirety of the 12 season due to a major renovation, the Yankees will play their “home games” elsewhere. Josh Leventhal reported, “The SWB Yankees will play 37 of their “home” games at Frontier Field in Rochester, plus another seven in Batavia. Scranton will split its remaining games among four other International League parks.”
- Eric Fisher reported that MiLB and MLBAM are very close to renewing their BIRCO (Baseball Internet Rights Co.) agreement. “Under the pact, MLBAM hosts and manages MiLB.com and individual team sites for more than 150 affiliated minor league clubs. A series of mobile and video products, including live video streaming of every Class AAA game, also has been developed.” BIRCO was formed in 08 and this present agreement doesn’t expire until after the upcoming season. But evidently traffic on MiLB.com is booming so both sides are eager to sign an extension. This marks a dramatic turnaround from the MiLB side where, in the early days of BIRCO, some clubs complained about the restrictions of the “one size fits all” BAM template and less control over marketing efforts on their team web site.
- Despite some previous grumbling amongst minor league owners over the aforementioned BIRCO partnership and MiLB’s investment in the Vero Beach Sports Village, MiLB president Pat O‘Conner, “…was unanimously elected to a second four-year term by the sport’s league presidents.” The announcement was expected as O’Conner ran unopposed for the position. Read Josh Leventhal.
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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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