This week in “Last Week in Bizball”, the Padres and Fox Sports San Diego, plus tidbits.
PADRES & FOX SPORTS SAN DIEGO
The Padres have concluded an agreement with the soon-to-launch Fox Sports San Diego. As a result, the Padres are going to see a big boost in local TV revenues from the reported $15 million they received last season from Cox. Beyond that, reports on the details of the deal vary greatly.
As mentioned last week, Bob Nightengale reported in USA Today that the value of the Padres/FSN deal is $1.5 billion over 20 years. LWIB Jay Posner reported that Nightengale’s numbers are exaggerated. According to Posner, the Padres will receive a 20% equity stake in the new channel (common in recent local rights deals with RSNs). Posner reports the Padres rights fee in the initial year of the deal is $30 million, with a signing bonus boosting it to $40 million. Again, according to Posner, the value of the annual rights fee will escalate about 4% annually, bringing it to approximately $65 million in its final year.
LWIB, Bill Shaikin reported that the deal includes an upfront $150 million signing bonus for the Padres. According to Shaikin, Jeff Moorad intends to use Fox’s money to complete the purchase of the franchise from John Moores. You likely know that the owners recently, and surprisingly, delayed approval of the completion of the sale. Commissioner Selig, in the cases of Tom Hicks and Frank McCourt, has set a precedent of forbidding owners to invest Fox’s money outside their baseball franchises. And so, MLB’s approval of both the transfer of ownership of the Padres, and their pending deal with Fox, are in limbo.
LWIB, Barry Bloom reported that the Padres pending deal with Fox spans 20 years and is worth $1 billion. According to Bloom, the initial annual rights fee will be $30 million and by the end of the deal it will have climbed to $70 million. Bloom also reports that MLB is delaying approval of the deal over the aforementioned concerns as to how the signing bonus is invested. Bloom pegs the bonus amount at $200 million. What stands out in Bloom‘s piece is his reporting that the deal is being complicated by Moore’s desire to retain an interest in the new channel while simultaneously completing the sale of his remaining 51% stake in the Padres to Moorad.
Despite all this, it is expected that Fox Sports San Diego will broadcast the Padres Home Opener on April 5th.
SELECT READ MORE TO SEE THIS WEEK'S TIDBITS
- Ratings for Saturday baseball on Fox have been pretty much flat for years. In this era of audience fragmentation, that ain’t so dire. The last two seasons Fox broadcast some Saturday games in prime-time, as opposed to the traditional afternoon slot. Last year Fox garnered ratings 50% higher for their 3 evenings of Saturday baseball than the afternoon broadcasts. So, it isn’t surprising that there will be more prime-time baseball on Fox this season. Beginning May 19, Fox will broadcast MLB in prime-time for 8 consecutive Saturdays. Michael Heistand explains that Saturday nite baseball on Fox will include regionalized coverage of 5 games. He quotes Fox Sports president Eric Shanks as saying that they want to “eventize” (ick) Saturday Night Baseball. Hiestand notes that Fox is considering expanding the number of Saturday night broadcasts next season but that would be complicated by Fox Sports Net’s having to give up more evening broadcasts of local games. Joel Hammond noted that clubs not featured on Fox Saturday Night dates, due to MLB’s blackout policy, must choose between an evening start with a larger gate but no TV broadcast, or an afternoon start with a smaller gate but local TV broadcast.
- In 13 will the Cubs be playing their home games at US Cellular? Lots of speculation about that LWIB. Just go straight to the analysis of Neil deMause.
- Predicting which team will cash in next on soaring local media rights has become a sport unto itself in the baseball media. LWIB, Matt Gelb noted the Phillies deal with Comcast expires after the 15 season. Gelb believes the Phillies are presently earning about $25 million annually for their local TV rights and wonders if their next deal might be worth $5 billion.
- When a new CBA is concluded it typically takes a number of years before the ramifications of the changes in it are realized. For example, over the next 5 seasons we’ll be monitoring how the new rules governing the Rule 4 draft and signing of international free agents have affected competitive balance. LWIB we learned that some of the changes in the new CBA are already having an impact on player personnel decisions. Amanda Comak explained how changes to the rules governing what teams must do to be eligible to receive draft pick compensation for losing a free agent made the Nationals signing of Edwin Jackson a less risky move for the Nats. Joel Sherman explained that because of the new CBA we should expect more player movement at the end of spring training. This is because veteran free agents, “… who have signed minor league contracts this offseason must either be put on the major league roster five days before the regular season or be given a $100,000 bonus to go to the minors and the right to opt out of their contract on June 1.…It is unlikely many — if any — teams will agree to the $100,000 bonus.
- Tim Tucker reported that the Braves have joined the growing list of MLB clubs employing dynamic pricing of tickets. “…dynamic pricing was pioneered in baseball by the Giants, who tested it on 2,000 seats in 2009 and applied it to all single-game tickets the past two seasons. Other teams that used dynamic pricing to varying degrees last season included the Astros, Athletics, Cardinals, Twins and White Sox. Teams that will join the trend this year include the Braves, Brewers, Mariners, Mets, Padres and Pirates. While at least five teams will apply dynamic pricing to all single-game tickets this season, the Braves will limit it to 8,000 outfield pavilion seats at Turner Field.” I’ve blogged here previously that the Braves are also introducing this season, on a limited basis, “paperless ticketing”. I think both dynamic pricing and paperless are, in part, being more widely adopted by clubs in an effort to limit the amount of inventory being resold on the secondary market. Don Walker has the details on the Brewers introduction ff dynamic pricing.
- Rays TV ratings declined close to 37.5% last season. Rays attendance declined 17% last season (and it was already woeful). But, guess what? The number of Rays fans has grown 105% over the last 5 years. That is evidently what Scarborough Research data revealed. I’d like to know who commissioned the market research, if you know please email me.
- Last week I blogged about the Padres plans to greatly boost the wireless capacity at Petco Park and how this is part of a larger trend across pro sports. LWIB, the Sports Video Group blog reported on the same and they know WAY more about this than I do.
- In the 1970’s the percentage of African Americans on MLB rosters was above 20%. From 04 through last season, that percentage has ranged from a low of 8.2 to a high of 10.2. Throughout the 90’s the percentage ranged from 13 to 19. MLB’s increasing reliance on college baseball as a source for recruiting talent has been one of the factors in the declining number of African Americans playing professionally. College baseball, in comparison to college basketball and football, offers relatively few scholarships. A disproportionate number of elite African American athletes are dependent on scholarships and, as a result, baseball is not a viable choice for many. MLB realizes the need to attract the best athletes possible to their sport (industry?) and, in response, has invested in baseball programs targeted to urban African American kids. These programs are called Urban Youth Academies,. The first opened in Compton in 06 and a second opened in Houston in 10. Three more are scheduled to open in New Orleans, south FLA and Philadelphia. LWIB David Barron reported from MLB’s Urban Invitational in Houston. “Blacks accounted for only 5.1 percent of baseball players in NCAA Division I in 2010-11, down from 6.6 percent in 1999-2000. Across all NCAA divisions, blacks make up 3.9 percent of baseball players, down from 4.6 percent in 1999-2000.” David notes that MLB’s initiatives promoting baseball in urban communities are producing prospects. “MLB notes 13 participants in previous Urban Invitationals have been drafted and 24 participants in its youth academies are playing college baseball.”
- Showtime announced that the Marlins will be the subject of the 2nd season of their reality-based series The Franchise. The Marlins are an obvious choice given the presence of Ozzie Guillen and The Big Z. I watched season 1 and found the most notable aspect of it the enormity of Brian Wilson’s ego.
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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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