prednisolone acetate ophthalmic suspension usp 1 cost best source for discount levitra skelaxin muscle relaxer for sale natural sildenafil citrate prazosin hcl for cats diflucan over the counter where to buy real viagra india lipitor side effects blisters canada prescription cialis cost remeron dosage for sleep priligy dubai paxil overnight is levitra pricing rabeprazole 20mg german remedies bactroban 2 cream uses indie sound can i use lotrisone for yeast infection best viagra in the hyderabad market buy lamisil cream for nail fungus pharmacy online uk erythromycin order glucotrol xl 10mg no prescription generic cialis cheapest price lortab withdrawal symptoms how long do they last no prescription needed pharmacy detrol generic version elimite rx para que sirve sertralina terramycin canadian pharmacy clonidine order online ovenight antibiotics for ear infections in adults antibiotics without prescriptioc cucumber make birth control zetia side effects xeloda chemo treatment levitra price walgreens viagra levitra cialis offers pfizer connection to care program application cheapest tadacip ivermectin no prescription clomid 50mg buy online viagara 40 for 99 canadian pharmacy viagra atacand without a prescription anxiety definition psychology tinazol creamytinidazoltofranil buy paysafecard online with paypal price of crestor in india benemid dosage for infantbenicar was ist ein lifter sildenafil alzytec tablets sale gpchealth comcast genaric viagra gold authentic viagra on line low priced viagra in usa elomet ointment mometasone furoate monohydrate lisinopril hydrochlorothiazide side effects weight gumigem usa jobs potassium nitrate for sale chinese replica viagra 100 mg bystolic nebivolol 5mg info on lidoderm patch side effects linezolid tablets deutschland benicar hct side effects hydrochlorothiazide cozaar side effects motilium 10mg tablets onlain igri s roboti diclofenac sodium 75mg side effects z pack 500 mg skelaxin information tretinoin cream 0.05 canada hoodia gordonii side effects dangers viagra super active plus 100 mg pravachol medication doctor frumil tabs3 paroxetine hcl 10mg side effects free viagra sample pack uk aspirin dosage for dogs by weight noroxin antibiotic side generic propecia wholesale vermox 500 mg janssen cilag software applications development budesonide ec 3 mg capsule side effects luvox medication information percocet withdrawal duration metformina 850 dosis recomendada de acido venlafaxine 75mg side effects acheter pas cher glucophage viagra online canadian pharmacy reviews atepros generic name getpharma ukulele lopressor side effects depression renova cream 0.02 coupons xlpharmacy medications for high blood zithromax side effects rash pinamox 250mg azithromycin 200 mg neurontin and weight gainnifedipine buy xenical orlistat 120mg acyclovir ointment medication buy fruesomide pills ivermectin dosage for dogs mange cataflam dosage for children etodolac 400 mg reviews how long neurontin to work for pain decadron dosage pediatrics phentermine reviews and testimonials thalidomide side effects dapoxetine 60mg diurin 40 no prescription acyclovir canada fast no prescription metoprolol tartrate treatment fasigyn tinidazole antibiotics and birth control pills phentermine information doctor medication precose for reactive hypoglycemia viagra real online paypal sky pharmacy canada mail order buying ali diet pills online reputable online pharmacies metformin hydrochloride piroxicam 10mg costplavix amikacin antibiotic for dogs dosis ondansetron erexin ingredients in beer letrozole 2.5 mg tabs where i can buy viagra online allopurinol drug interaction with lisinopril order meds online bootleg cialis dalacin t gel 1 effect buy tamoxifenpaypal a donde conpro sialis viagra manufacturer coupon finasteride proscar propecia mobicool mini fridge f150online parlodel dosage for benadryl mail order viagra from canada allegra carpenter husband branded real viagra amoxicillin 825 haldol off label uses magnesium supplements for leg cramps naproxen vs ibuprofen for back pain where to buy zovirax ventolin expectorant for children cialis in penang dicyclomine 10mg information uses lantus solostar needles prices fertomid 50 information about africa methocarbamol 750mg no prescription looking for viagra lynoral information management colospa side effects quinine water for restless leg syndrome metoprolol succinate vs metoprolol tartrate getpharma online pharmacy phamacy canada online taxas estrofem no prescription cialis 5 mg online pharmacy preisvergleich viagra generika cialis cost walgreens reductil 15mg online search http oncosantafe index latisse reviews on eyebrows cialis 72 hour trimetabol dosage of tylenol buy orlistat usa no prescription frank lloyd wright omaggio vase medazole 200mg progesterone stilnox side effects medicines to take albuterol inhaler side effects in adults aggrenox medication toprol xl medication side effects yahoo phone contact cholesterol diet feldene gel 0.5 buy roofie viagra vs cialis sales picareta server execution ciprofloxacin 500mg to buy claritin dosage for children under 2 new cfc free primatene mist mail order chalias lantus solostar pen needles size prilosec non prescription drug walmart but cheap frusomide ovral l ivf fungsi obat faridexon zovirax generic over the counter mirtazapine medication with alcohol best prices on viagra 100mg bystolic generic availability fucidin a cosa serve viagra ahnliche produkte brookville westpark artane dublin 5 malaseb shampoo ingredients allopurinol side effects allopurinol gout benadryl and pregnancy first trimester pravachol medication taking sotalol 80 mg picture levitra offer buy diazepam uk 10mg 0 5 mg subutex withdrawal symptoms propecia hair loss reviews suprax side effects in children regenon retard 60 mg etodolac high online pharmacy claravis viagra online usa pharmacy valtrex on ebay prix de cytotec en cote divoire lasix on line without prescription buy antabuse in the us kenacomb cream gramicidin flagyl without prescription in us yasmin boland cancer drugs on line reminyl classification of matter suprax dosage for children rythmol in hong kong s pharmacy decadron injection treatment nizoral cream for ringworm lowest price dapoxetine aspirin 81mg heart celexa reviews for anxiety diazepam side effects dogs kemadrin drug addiction fincom 1 tablets flexeril generic pictures viagra shqip tomar cytotec sin estar embarazada benazepril medication for cats medsindia legit onlinemedsonlinemenshealthmesalamine metoprolol er 25 mg drug interactions buy viagra in delhi buy sildenafil citrate 100mg rumafen medicine ball trileptal depression anxiety rocket raccoon marvel otc flonase coupons is septra good for strep zovirax cream 5 coupon is ephedraxin like vyvanse software engineering degree extenze pills for womenezetimibe orlistat 120mg online viagra in dubai legal canadian online pharmacies reviews pharmacy unscripted norvasc 5mg side effects canadian on line pharmacies for cialis therapy for depression in young adults where can i buy promethazine codeine viagra levitra shop uk rx cialis tadalafil 40gm game of thrones season 5 start date cozaar 50 mg losartan potassium tramadol side effects medications in dogs 232 buy advair from mexico prednisone 5mg dose pack prodajem cialis atacand plus hydrochlorothiazide lesofat pills price right lopressor metoprolol coupons clotrimazole solution for ear warfarin and alcohol consumption www nizoral ketokonazole pills levitra generico in contrassegno priligy dapoxetine fda 2014 approvals antabuse side effects doctor cialis professionals multiple orgasms buy propecia canada how to take precose medication cheapest cialis in australia supradol ketorolac english dictionary advair diskus without a perscription buy tadacip 10 mg tabs erection pills with no perscription terramycin for chicks doxycycline 100mg capsules treat buy flomax on line no prescription how to use vega 100 tablets quetiapin online kaufen rezeptfrei cialis 5 pas cher esomeprazole strontium can i take 40mg of cialis alesse side effects weight gain pfizer pharmaceuticals prescription medicines allegra d coupons to print viagra light switch zithromax for strep throat dosage salzarex vardenafil dosage vermox 500 dosage order viagra online with amex viagra has stop working antibiotics for sinus infection biying motrin 800 rogaine reviews viagra 100mg canada vardenafil hcl 10mg online zetia medication cost healthy man viagra radio commercial synthroid and weight loss for hypothyroidism xenical for sale in ireland atenolol chlorthal 50 25 cholesterol guidelines chart mexitil contraindications for electrical stimulation buy cheap cialis pills laxadin bisacodyl mechanism chlamydia pictures and images in men buy sibutramine hydrochloride monohydrate capsules 40 mg levitra claravis accutane coupons lidoderm patches amoxicillin shelf life antibiotics vermox dosage for children pms zopiclone side effects omnicef antibiotic cefdinir side effects in children sildenafil pulmonary hypertension revatio moduretic drug baytril otic drops for dogs cialis commercial 2014 drugs without a prescription drugs similar to ativan asacol medication coupons where to purchase amoxicillin how 2 use eprostol tricilest ukc prescription viagra clotrimazole and dipropionate cream uses support pharmacycustomercare com can i take more than one cialis a day female viagra pills in india priligy fda approval birth control pill aviane reviewsavodart ezetimibe simvastatin generic price xanax withdrawal symptoms headache spironolactone buy without perscription next day viagra no prescription uk buy cialis online canadian pharmacy captopril drug interactions mirtazapine for dogs for sale fanegada wikihow avapro generic sildenafil citrate generic viagra revia medication online no prescription lopid side effects treatment salzarex pharmacy schools canadian cialis generic cialis uputstvo cialis super force online shopping azulfidine side effects benemid medication administration buy aprovel viagra dosage 200 mg canadian pharmacy online cialis cefalexina bulaklak can you still get accutane from canada us pharmacy viagra cialis griekenland who has the cheapest cialis buy cialis from mexico coversyl 4mg sale purchase tadalafil online tantalum oxide dielectric viagra online po box ok asthma inhalers for sale online levomax 500 buy antibiotics usa what is metformin tramadol 50 mg dose dogs astelin side effects azelastine hci dynamogen solution orale meaning allopurinol 100mg prices walgreens pharmacy article 131 viagra pharmacy buy viagra online no presription pfizer news articles generic of vardenafil aldara cream for molluscum i mobicool malaysia buy cialis professional online net canadian pharmacy on script needed cialis gunstig kaufen nolvadex online australia arimidex fast delivery premarin side effects premarin cream side effects sublingual gland anatomy online pharmacies prednisone fluoxetine for dogs reviews isoniazid 300mg tab generic substitute for avodart cheap pills onlain igri mirtazapine dosage for childrenmisoprostol discount ampicillin nexium side effects symptoms aristocort without prescription advair diskus cost samonas listening therapy training canadian pharmacy support group lamotrigine rash picture manfaat obat metronidazole 500mg fentanyl citrate drug avapro 300 mg side effects where to buy viagra in seoul how to tell if fake sildenafil synthroid no prescription low cost next day canadian express drugs sumycin and achromycin should not be administered with low cost levrita does viagra make women horny novolog coupon vial name brand cialis without subscription motrin and robitussin in children dormidina information literacy generic metformin mupirocin ointment usp 2 uses dogs keftab vs keflex dosage lotemax gel price viagra prijs nederland medicinenet drug interaction tool download viagra 150online minoxidil 10 percent compare tretinoin cream non rx kamagra next day uk novolax laxative suppositories proviron impotence aldactone side effects dosage flagyl antibiotic used to treat boils viagra for sale philippines obestat reductil slimming cheap real viagra cheap generic dutasteride all about xeloda colon cancerxenical where can i get viagra super active nitrazepam dosage for infantnootropil cardinal health systems toradol 60mg injection side effects how to get nexium cheaper testosterone ramipril 5mg capsules mupirocin over the counter zolpidem tartrate 10mg drug viagrabuy super viagra vitamix vs. blendtec blenders kesan pil perancang online pharmacy without presciption 40 viagra for $99 cialis without a prescription pyridium 200mg tablet soma vs skelaxin vs flexeril meclizine medication for dizziness minoxidil results after 2 months omeprazole 20 mg capsules pictures cialis mexico cheap fentanyl patch side effects 25mg etodalac without a prescription zenegra 100 how long does it last azithromycin prescription free zanaflex highest dose morphine withdrawal time india buy proventil online phexin 500mg equals topamax side effects topamax weight loss minomycin side affects viamedic complaints against doctors sumycin capsules and tablets trazodone without prescription 20mg name brand cialis tretinoin cream 0.025 cost nuovo cialis anyone use generic viagra alzen medicament lantus solostar pen inj 5 x 3ml metformin hydrochloride 500 mg zinoxime dosed valtrex dosage for herpes bystolic for sale generic viagra uk next day delivery potenzmittel ohne rezept cuckold definition slang words cheap ciproxin amoxicillin rash pictures benadryl ingredients label weak viagra albenza side effects generic diltiazem er medication cialis in new orleans cialis generic levitra viagra where to buy retina a seroquel medication pile wyagra no prescription antibiotics skelaxin 800 beprogel scalp fungus levitra contra reembolso metoprolol tartrate metoprolol succinate digoxina presentacion vitug topamax recall 2012 ranitidine side effects ranitidine 150mg otc primatene mist replacement viamedic complaints
Home Pete Toms Last Week in Bizball: MLB Teams are Media Companies.

Like Shoot to Thrill - An AC/DC Tribute on Facebook!

An authentic tribute of AC/DC that covers the best of the Bon Scott era and the best of Brian Johnson's material

Who's Online?

We have 1005 guests online

Atom RSS

Last Week in Bizball: MLB Teams are Media Companies. PDF Print E-mail
User Rating: / 4
PoorBest 
Pete Toms Article Archive
Written by Pete Toms   
Tuesday, 07 February 2012 10:11

Last Week in Bizball by Pete Toms

This week in “Last Week in Bizball”, MLB teams are media companies.

These past handful of seasons, MLB attendance and regular season national TV ratings have been pretty much flat. The overall ratings trends for MLB’s marquee TV events, the ASG and WS, are clearly downward. MLB’s fan base is easily the oldest amongst the “big 4”. The building boom of retro/Americana/baseball-only stadia, which contributed greatly to increased industry revenues and franchise values, is well past its peak. Nonetheless, industry revenues remain at a record high of $7 billion annually. In addition, in 09, the Ricketts family paid a record amount for an MLB franchise when they acquired the Cubs, Wrigley Field and a minority stake in CSN Chicago for $800 million plus. That record amount is soon to be obliterated with the auctioning off of the Dodgers. If the sports biz punditry is correct, the sale price of the Dodgers will be in the neighbourhood of $2 billion. The sale of the Dodgers includes no additional assets, other than a ballpark which reportedly requires $400 million plus in renovations to bring it up to contemporary industry standards. The purchase price includes no equity in an RSN nor any property development rights to real estate adjacent to the stadium (both common in today’s franchise sales). In fact, for $2 billion, the purchaser might not even acquire the parking lots surrounding the stadium. In 04, the McCourts purchased the Dodgers from Fox for a reported $430 million, with Fox financing most of the purchase. So, eight years later, why has the value of the Dodgers increased by multiples of four or five? The reason is the soaring value of media rights for live sports. The Dodgers current local TV deal with Fox’s Prime Ticket expires after the 13 season. The final season of the deal will reportedly garner the club $39 million. By comparison, the Angels just concluded a 20yr / $3 billion deal with Fox Sports West. LWIB, sports media dealmaker Chris Bevilacqua (check out his CV, VERY impressive) discussed the trend of soaring local TV rights fees in MLB on SportsMoney (video here).

According to Chris, the “tipping point” for the value of media rights for live sports occurred in 09/10 when the threat of the so-called OTT services became real to the $150 billion per year cable industry. The cable industry concluded that live sports programming was THE offering which would differentiate them from the OTT alternatives and, in turn, rights fees skyrocketed. Chris describes a transformation of the MLB ownership model with “..teams becoming media companies..”, maximizing on the value of media and IP rights. When asked how, given local TV ratings in the bottom 5 of MLB last season, the Angels managed to triple their annual TV rights fee to $150 million, Chris outlined how the cable industry functions. Ratings drive ad revenue, but the value of local MLB TV rights is in the distribution, or subscriber fees. Chris notes that the value of present and future deals will be based on market size and competition in that market amongst providers (MSOs, telcos, RSNs). Chris foresees all MLB franchises eventually benefiting from this trend, the “tonnage” of the 162 game sked also uniquely valuable, leading to eventual annual industry revenues of $9 - $10 billion.

SELECT READ MORE TO SEE THE REST OF THIS ARTICLE, INCLUDING COMMENTS FROM MARK CUBAN

LWIB, celebrity billionaire Mark Cuban dropped out of the bidding for the Dodgers. Cuban’s comments to Access Hollywood about the impending sale of the franchise described a media deal. “It just didn’t work out. I wanted to buy a baseball team; they were selling a media rights deal, It just wasn’t going to work out.” “The economics got so out of control because the Dodgers’ TV deal’s up for bid and so there’s a lot of groups coming in going, ‘This TV deal’s worth so much money that we’re gonna pay whatever it takes to get the Dodgers.’ And so they’re buying the TV rights deal first and the team second,”

Many have noted that the billions of dollars that Fox Sports Net (FSN) has recently committed to the Angels and Rangers will result in a fundamental shift of power in MLB. Fans of the A’s likely feel particularly hopeless and no doubt understand that these TV deals were a contributing factor in the recent trades of Gonzalez, Bailey and Cahill. As the model for operating a franchise shifts from maximizing in-stadium revenues to maximizing media rights, long-term, will there be a bifurcation within MLB along the divide of large and small TV markets? For instance, going forward, will the Brewers reap, in relative terms, less benefit from finishing 4th in NL attendance because Milwaukee ranks 34th in DMA? Buster Olney wrote recently about concerns amongst some franchises over growing revenue disparities resulting from newly concluded local TV deals:

….some rival executives with small-budget and middle-budget teams are privately lamenting what they consider the increasingly untenable position their teams occupy.

"I don't think the new labor agreement helps small-market teams enough," said one general manager. "I think it's really going to hurt us, because it doesn't address what's happening."

And what is happening, in the eyes of many team executives, is that the massive TV contracts that are either already in place or on the horizon for teams like the Texas Rangers, Los Angeles Angels, Los Angeles Dodgers and Seattle Mariners are helping to create two distinct classes of teams.

The A-listers and B-listers, you could call them.

Which clubs are next in line to cash in on the soaring value of local TV rights? In the aforementioned SportsMoney interview it was noted that deals negotiated in the middle of the previous decade are currently undervalued. A number of these deals were concluded with FSN channels. Within these contracts there is a standard clause which allows the club to renegotiate at the midpoint of the deals term. For instance, the Angels took advantage of this option to renegotiate their $3 billion deal with Fox Sports West. In December, Mike Ozanian wrote that the Diamondbacks, Tigers and Cardinals will soon be at that midpoint of their deals with their respective FSN partners. In addition, the Mariners should soon renegotiate their deal with Root Sports (originally negotiated by FSN Northwest) and the Padres are believed to be partners with FSN in the soon-to-launch Fox Sports San Diego.

If, at the local level, the “tipping point” was 09/10, at the league level it came earlier. In 00 the MLB owners collectively invested a reported $75 - $80 million to form MLBAM. BAM has been an enormous success for the owners, with annual revenues reportedly in excess of $500 million and a value of $2 - $3 billion. In 09, MLB launched their own TV channel, MLB Network. MLB Net is in over 67 million homes and earns a monthly subscriber fee of $0.26. The iN DEMAND cable consortium owns a minority stake in the channel.

So, why do I care that MLB is transforming from a butts in the seats business to a media business? I care because there is increasingly less financial incentive for franchise owners to field winning teams and that is bad for fans. Revenue sharing long ago decreased the financial benefit to winning and mitigated the financial downside to losing (see the “leaked financial docs“). Both Bob Simpson (Rangers) and Terry McQuirk (Braves) have stated in the press this off season that their teams don’t turn a profit but the payoff in their investment is in the growing valuation of the franchises. But the value of franchises is increasingly tied to league owned media ventures and local media rights, as opposed to winning and increasing in-stadium revenues. Team owners with equity in an RSN (Mets, Phillies, Astros, Cubs, White Sox, Indians, Giants, Red Sox, Yankees) benefit from dividend payouts and appreciation in the value of the channel. The on field performance of their teams is of little note there. Team owners with locked in long-term rights deals with RSNs are protected against fielding inferior teams. As Chris Bevilacqua noted, poor TV ratings for the baseball team don’t lower the monthly subscriber fee the channel collects. So, you better hope the obscenely wealthy owner of the team you root for wants his buddies at his club to admire his new WS ring. Because a winning team has never been less important to his bottom line.

You can follow me on Twitter @PeteToms


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.

Follow The Biz of Baseball on Twitter Twitter

FacebookFollow the Business of Sports Network on Facebook

 
 
Banner

Poll

Should MLB Force Jeffery Loria to Sell the Marlins?