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Pete Toms Article Archive
Written by Pete Toms   
Monday, 30 January 2012 22:26

Last Week in Bizball by Pete Toms

This week in “Last Week in BizBall“, an all tidbits edition including Indians TV rights, Liberty Media & the Braves, the annual Harris Poll and more.

  • LWIB, The Plain Dealer published this piece from Bill Lubinger detailing the growing importance of local TV rights in MLB. This trend became glaringly obvious when the Angels new 20yr/$3 billion deal with Fox Sports West allowed them to sign Albert Pujols. Bill’s piece focuses on the state of Indians’ local TV rights. While the Yankees (YES) and Red Sox (NESN) are the franchises most often mentioned when the subject of team-owned RSNs is discussed, the Indians launched their own RSN, SportsTime Ohio, in 05. According to Bill, STO pays the Indians an annual rights fee of approximately $30 million. But, could the Indians soon see a significant increase in local TV revenues? Bill addresses the rumours that Dolan will soon sell STO, with Time Warner Cable the most frequently mentioned buyer. Fuelling the speculation is the fierce competition in recent years amongst MSOs, telcos and RSNs to lock up local MLB TV rights to long term deals. This competition is a result of the TV industry’s conclusion that live sports programming is THE offering which will enable them to retain subscribers and fend off the so-called OTT alternatives. The 162 game schedule of MLB makes it a uniquely valuable source of programming for all-sports channels, particularly during the summer. More specifically, the value of Indians TV rights could benefit from competition between TWC and Fox Sports. Fox Sports Ohio is STO’s competitor and TWC is the dominant cable provider in Ohio. Albeit on a much smaller scale in this instance, the battle for local sports rights in the LA market between TWC and Fox demonstrates the vital importance that both of them place on controlling local sports rights. A sale of STO would not be hindered by their current rights deal with the Indians, which, according to Bill, is year to year. Lots of good info in the piece also on the valuations of RSNs.
  • LWIB, Tim Tucker of the AJC discussed the state of the Braves with club CEO Terry McGuirk. The report notes that, as of last month, owner Liberty Media is allowed to sell the Braves. When Liberty purchased the Braves in 07 from Time Warner they had to agree to not sell the team for 4.5 years. Beyond that, the rest of the deal remains too complex for me to understand. The bottom line is, most believe Liberty has never wanted to own the Braves, that their ownership resulted from a MASSIVE deal with TW in which the franchise was a trivial component. In the piece, McGuirk defends Liberty’s middle of the pack player payroll, a subject of frustration amongst Braves fans, equating it with the club‘s middle of the pack attendance. McGuirk also sheds some light on the realities of the corporate approach to ownership of a pro sports franchise. He notes that Liberty accepts that they don’t generate yearly profits operating the franchise but expect that the value of the asset will increase over time. McGuirk also speaks to the difficulties inherent in a publicly owned company owning a sports franchise, where the seasonal spikes in revenues isn’t compatible with quarterly earnings reports and expectations of shareholders. In addition, the report reveals that Braves local TV rights are locked up for the next 25 years. With that revenue stream becoming increasingly important in MLB, it does not bode well for future Braves payrolls or franchise value.
  • LWIB saw the release of the annual Harris Interactive Poll which measures the popularity of a broad range of sports amongst adults in the US. 2,237 persons participated in the online survey between December 5 and December 12. “Over one-third of adults who follow at least one sport (36%) say professional football is their favorite sport while just 13% say baseball is their favorite. The gap between the two sports has widened in the past year - last year 31% said pro football was their favorite while 17% said baseball was their favorite sport.” Harris goes on to note that when they first asked Americans to identify their favourite sport in 1985, 23% responded baseball. Harris also tells us that the largest group identifying baseball as their favourite is, not surprisingly, folks aged 50-64. The 2nd largest group choosing baseball as their favourite was Hispanics; good news for MLB considering their burgeoning population numbers. Again, not surprisingly, a disproportionate number of respondents on the east coast identified baseball as their favourite.
  • It has long been assumed that many minor and major league players from Latin countries are older than their clubs officially list them. In addition, many have long been circumspect about the identities of these players. For instance, David Ortiz played a handful of seasons in the Mariners’ organization as David Arias. But in recent years, as signing bonuses for international free agents have rapidly escalated, these matters are no longer treated as trivial. In efforts to reduce age and identity fraud amongst signees from the Dominican Republic, both MLB’s Department of Investigations and Scouting Bureau are assisting clubs in player evaluation. LWIB, in light of the well documented cases this off season of the Ps formerly known as Fausto Carmona and Leo Nunez, Tyler Kepner reported on the challenges facing MLB in the DR.
  • Last year it was the opening of the PNC Club and the installation of the Toyota sign in the left field bleachers. This upcoming season will see the Budweiser Patio area and an LED board in right field. Of course, I am describing the Cubs continuing efforts to increase revenues at Wrigley Field. LWIB, Ed Sherman reported on what other changes fans can anticipate at Wrigley. If Ed is correct, this is just the beginning.
  • The Miami Marlins home opener is just over two months away. LWIB, Marlins President David Samson stated that their new ballpark will be known as “Marlins Stadium” at least for “..the start..”. And, on that note, after four seasons, the Washington Nationals still haven’t concluded a naming rights deal for Nationals Park.

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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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