I spent the afternoon doing some reading, mainly on financial stuff, and I came a piece on the Forbes Magazine website about the growth of regional sports networks (RSN’s) and the disappearance of games from broadcast or free TV. The Orioles have had MASN for several years now covering their games along with the Nationals, and from what I know pretty much every regular season game will be shown on the network, and occasionally — mostly on weekends — games are showed on broadcast TV.
However, one has to understand how important these RSN’s are to teams — and, yes it all ties down to money. I have been following this topic for the past few years, and it’s no surprise that the financial power of the Yankees, Dodgers and Red Sox are to these networks, while the small market teams are buying into RSN’s to keep up with the big boys. therefore, as much as baseball — good or bad — likes to promote the wholeome image of the game, yes, it’s a business and a huge one that.
For $1 billion, FSN Detroit locked up the rights to air all the games of each team over the next decade. The Tigers’ portion is worth $400 million and doubles the cash the team received under its prior deals with FSN Detroit and local free television station, WJBK Fox 2.
… This season an average 16 games per team will be available on free TV, an all-time low. In 1987 that number was closer to 81 games per team. What happened? A drop in team-shared revenue from a national television contract negotiated by MLB with NBC. (A 1994 partnership had the MLB and the network splitting net revenues; the deal lasted two years and revenue fell by 60%.)Even more significant: a rise in cable subscribers and, with them, a propagation of regional sports networks (RSNs). With a dual-revenue stream of advertising and subscriber fees, these networks offer gobs of cash that teams gladly balance against the loss of a few fans without cable television. Baseball, offering 150 games of three-plus hours of inventory (nearly double what basketball or hockey can offer), has become the RSNs’ darling.
The money offered is so good that a record 13 MLB teams had moved all their games not already part of a national telecast to an RSN by this season. The Tigers have the biggest of such deals, and small-market teams like the Kansas City Royals (FS Kansas City), Cincinnati Reds (FSN Ohio) and Tampa Bay Rays (FS Florida and its sister station Sun Sports) have made a complete transition to cable. It is the best off-field move they can make to try to compete with big-market teams.
Now one must ask where do the Baltimore Orioles fit in with this whole thing? Well, the Orioles and MASN (with conjunction with the Nationals) ranks 9th with $28 million revenue. From what I know, the Orioles pay the Nationals $24 million to air their game despite their ratings issue; however, it looks like Baltimore may be making a profit yearly, but I am not sure if the network is in the red or not because of start costs. Here’s what’s Forbes said about the network.
The economy may be tanking, but these teams are still finding creative ways to make revenue. Times may be hard for many, but sports in general — including baseball — may be not suffering as much as we think.
