Sports TV Business

Sizing up the MLB contract situation

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Here’s the way I see things heading into MLB’s rights renegotiations:

  • Fox’s decision to hand over Saturday nights to sports, of which MLB plays a key role, may have MLB thinking of moving its main broadcast package to primetime full-time. As the only entity of sufficient stature that can fill the time all summer, MLB would have to be something close to the lynchpin of any effort to turn a network’s entire Saturday primetime schedule to sports. One problem: Fox and ABC would have to postpone the start of their primetime college football schedule to October, and NBC is lacking in sports it can plug in the rest of the year. The state of MLB’s infamous blackout restrictions that prevent out-of-market Fox games from appearing on Extra Innings may affect this as well.
  • With the NFL likely not selling a Thursday Night package in the near term if ever, MLB is in the role of kingmaker, potentially singlehandedly deciding Fox and NBC’s chances of running down ESPN. MLB is NBCSN’s best hope for increasing its reach and popularity, and along with NASCAR, is the other sport that will play a key role in Fox’s eventual decision whether to start a network.
  • Despite all this, the fact is that MLB’s status overall isn’t that great. For a variety of reasons, MLB isn’t succeeding at all at connecting with younger audiences. In particular, I think Fox kinda wants to get out of the sport that was always an odd fit for their brand and interrupts their highly successful primetime schedule considerably during the fall.
  • TBS’ postseason coverage seems to be working out fine, but it’s hamstrung by the utter failure of their Sunday afternoon package, which last year wasn’t even attracting as many viewers as a freaking Formula 1 race. Of course, we’re comparing cable with broadcast, and part of the problem is that TBS is blacked out in home markets and gets second choice after ESPN’s Sunday night package, but it also has to do with a glut of sports on broadcast and cable weekend afternoons, and the fact remains that for most people, baseball means Fox and ESPN all year long, and then abruptly and inexplicably moves to TBS when the postseason hits. My feeling is that MLB won’t try to include that Sunday afternoon package in this round of negotiations, instead giving it to MLB Network and splitting up ESPN’s games. Most analysts seem to think MLB will create a Sunday/Wednesday package and sell the Monday package solo, but selling the Sunday package solo and packaging Monday and Wednesday together makes more sense to me, because Sunday seems to be the marquee package with exclusivity and no other games in the time slot, similar to the relationship between TNT’s Thursday NBA games vis-a-vis ESPN’s Wednesday and Friday games.
  • Complicating matters even more for TBS, ESPN desperately wants back in the postseason. That will probably force MLB to find a way to juggle the postseason between two cable partners and MLB Network. Analysts are predicting that the LCS currently airing on Fox will join its sister on cable; perhaps the arrangement will be similar to how the NBA shuffles its conference finals between TNT and ESPN.
  • The All-Star Game has been an especially odd fit on Fox, and last year actually lost in the ratings to NBC’s America’s Got Talent. My hunch is that it will move to cable, probably ESPN.

Putting all this together, I see only three potential outcomes:

NBCSN and ESPN split the cable contracts, NBC gets the World Series. There’s so much that fits about this, even beyond NBC’s desire to improve the status of NBC Sports Network: NBC’s primetime has been mired in last place for ages, so it has less to lose during October than the other broadcast networks do, plus NBC generally has a weaker sports profile overall. Also, it would mark the return of Bob Costas to baseball coverage people would actually watch.

I would expect NBC, more than any of the other contenders, not to settle for “second-class” cable status in any way. I would expect NBCSN to get a share of the postseason, including LCS games, and possibly even the Home Run Derby. There’s no way to really avoid conflicting with hockey on NBCSN in April and into May, but the Sunday package would work out better for that purpose. Meanwhile, golf and horse racing could pretty much force the broadcast package into primetime.

The biggest problem is probably that even there, NBC would run into conflicts with the Stanley Cup Final on one Saturday night a year, plus occasional West Coast US Open golf tournaments NBC would rather allow to leak into primetime. A bigger problem could be that this would involve MLB jettisoning two partners at once, which could be a bridge too far for them. That could be enough for them to back away in favor of…

ESPN and TBS split the cable contracts, ABC gets the World Series. This might be the most comfortable option for MLB, shacking up with the two most established sports broadcasters on cable in a mirror of the NBA’s relationship, but it would be disastrous for anyone who wants a competitor for ESPN. It would certainly produce some happy faces in the offices of the Walt Disney Company, not only by shutting out any potential competitors and winning World Series rights but mitigating the loss of one or two nights to TBS with the addition of the broadcast package. I wouldn’t be surprised if ESPN were trying to form an alliance with Turner to make this happen.

The only people this would make happy outside Bristol and Atlanta might be people who want to stem the death of sports on ABC. Because of the restrictions of MLB’s anti-trust exemption and MLB’s own desires, neither ESPN nor TBS would be able to move the World Series to cable, and I don’t think either CBS or MLB want a relationship between those two to fill the broadcast contract, despite its popularity with MLB’s own audience – CBS has US Open tennis in September, SEC football in the rest of the month, golf the rest of the year, and “America’s Most Watched Network” in primetime to avoid disrupting in October. ESPN would be fine with putting the World Series on broadcast and giving ABC a regular-season broadcast package because ABC’s primetime in recent years has become increasingly weak, coming dangerously close to falling to NBC’s level, and like NBC, ABC has an infamously weak sports portfolio. I could see ESPN airing a regional ABC game on its cable network, similar to what it does for college football, though only in primetime.

All things considered, though, I don’t see this happening; the most recent contract, to me, ultimately amounts in the grand scheme of things to a way for TBS to transition out of its old Braves games. MLB might be more comfortable if…

FX (or the proposed Fox Sports network) and ESPN split the cable contracts, Fox gets the World Series. Given Fox’s desire to increase the presence of sports on FX, this is the only way I see Fox staying in the sport – from both Fox’s end and MLB’s. When the Sports Business Journal wrote an article on the Fox Sports network speculations, they cited as one key factor MLB telling Fox they needed to “establish a better cable sports presence” to compete with NBC and ESPN. I don’t know whether that says more about NBC’s chances, Fox, MLB, or FX. (Or Turner, for which it might be even worse news than it is for Fox, both in the fact they weren’t even mentioned and in what it implies MLB is looking for.) In any case, while Frank the Tank suggests that big-time sports leagues like MLB would rather be on a network with other draws, whether other big-time leagues or general-entertainment programming, and cites that as a big obstacle to both NBC and Fox’s all-sports networks vis-a-vis ESPN and Turner, this little piece of information suggests otherwise.

This is the closest outcome to the status quo, and it’s hard for me to find convincing points against it – if Fox ends up launching an all-sports network. It was harder for me to see this happening when it involved FX getting games, because of FX’s inability to raise the fees it charges to cable providers. To my knowledge, however, a Fox Sports network wouldn’t have that problem, so the only real issues left are the ones laid out in the opening of this post.

The most likely scenarios are the ones involving NBC and Fox, with TBS being an outcome of last resort if Fox decides not to launch an all-sports network and Turner’s desire to stick with baseball combined with ESPN’s desire to keep NBC from approaching their level are enough to keep NBC out of the sport. Before Fox’s network dreams came to light I would have considered the TBS/ABC scenario the second favorite, and normally I’d say ESPN could completely box NBC out of the market – besides Turner, an alliance with Fox makes sense even with their network ideas because of their established relationships with MLB – but I think NBC is willing to overpay considerably on possibly their last, best hope to establish NBCSN’s bona fides, and I think NBC can provide a high-quality enough broadcast to overcome any qualms MLB might have over NBCSN.

I keep going back and forth on which scenario is more likely; it’s hard because the MLB contract will influence whether Fox starts a network, but the existence of a network will determine whether Fox gets the contract. That may be one reason why they’re trying to renew the NASCAR contract early, which could be a bellweather for the outcome of the MLB talks if it’s announced first. If Fox doesn’t launch a network, I think it’s probable that NBC ends up with the baseball contract, dependent on the outcome of an ESPN-Turner alliance. But if they do, or even if they haven’t decided yet? Then the race is on as Fox and NBC wage a fierce (and expensive) battle to determine which will move on to take on ESPN, with Fox being the slight favorite if they have decided and NBC a slight favorite if they haven’t.

ESPN and the Rose Bowl stay in business

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No sooner did college football approve a revolutionary playoff structure than ESPN made sure at least one aspect of the past remained in place: the Rose Bowl breaking off from the rest of the BCS and signing its own television contract.

ESPN has signed an agreement with the Rose Bowl over the entire 12-year course of the new format.

I don’t know what this would mean for the other bowls’ TV rights, especially as regards to the semifinal rounds of the new playoff structure, although the release seems to imply ESPN would carry the Rose Bowl in years it’s a semifinal. If that’s true, it would seem to dilute the proposed $5 billion agreement the BCS is looking for for its proposed playoff system, especially since the SEC and Big 12’s “Champions Bowl” would likely also have a separate agreement. A big part of that desired number is the addition of semifinals, but four out of twenty-four of those games might end up going to someone else.

On the other hand, the BCS may decide to sell the semifinals separate from the championship game… but from what I read, if that was the case both semifinals would likely be sold together (which doesn’t make much sense to me – maybe what was meant was one semifinal and the title game?). I don’t know how the whole thing will end up working, but I guess we’ll find out in the fall.

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The State of NASCAR on Television

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NASCAR is in a bit of a state of flux at the moment. If you were describing the “four major sports” and you were looking at matters objectively, the fourth sport would be NASCAR, not the NHL, a status the sport has triumphantly risen to over the course of the last two decades. Once a southern curiosity, NASCAR has taken advantage of the war that rent open-wheel racing apart over a decade and a half to establish its fanbase in the north as well, becoming a force not to be trifled with in the world of sports. Yet over the course of the last contract, TV ratings and most measures of popularity have stagnated, even declined some. Where, then, does NASCAR stand as it prepares to renegotiate its contracts?

NASCAR’s relationship with Fox is very tight. The two entities have been very good to one another; Fox has been with NASCAR since the beginning of NASCAR’s control over the TV contract, and NASCAR has become one of the linchpins of Fox’s sports brand. For many, Fox practically defines television coverage of the sport, carrying the Daytona 500 over the entire lifetime of the most recent contract. NASCAR also isn’t likely to break its relationship with ESPN, if only because it’s scared of the horror stories of what happens to sports like the NHL or UFC (or, arguably, itself before the most recent contract) when they don’t shack up with ESPN. ESPN has certainly given NASCAR plenty of love; while the sport doesn’t get much more coverage on shows like PTI, ESPN does show plenty of NASCAR highlights on SportsCenter, and heavily advertises its coverage of Sprint Cup and even Nationwide series races, not to mention the daily magazine show NASCAR Now on ESPN2. NASCAR and ESPN tied themselves too tight at the hip to break up now. Say what you will about how they cover the sport, I guarantee you that NASCAR is quite happy with the coverage of Fox and ESPN, especially that they cover the sport.

TNT is substantially iffier. They are the forgotten broadcast partner. They have the fewest races, the fewest important ones (they have the second Daytona race, but they stop one race short of the Brickyard 400 on ESPN, and they have neither the Daytona 500 like Fox nor the Chase for the Cup like ESPN) and the least amount of coverage outside their Sprint Cup races. Their presence seems to be a vestige from their far greater role in the previous contract when they were joined at the hip with NBC. Turner itself doesn’t seem to have much respect for the sport; while its MLB, NBA, and NCAA Tournament graphics have all been made to look more like one another in recent years, its NASCAR graphics have remained unchanged for several years now. My hunch is that they will be jettisoned, either giving more races to Fox and ESPN, or making way for a third partner.

To me, there are only two candidates for that third partner: NBC, or a CBS/Turner marriage similar to their NCAA Tournament marriage. But as much as the latter might appear to keep up the status quo, and Turner will probably try to sell it hard (especially considering the windows it could open to add more sports to truTV, as discussed below), there’s no sign CBS is even interested. NBC may want to get back into the sport, if mostly to shore up its NBC Sports Network, but I suspect they will insist on a more equitable share of races, including something more important than what TNT has now. That would have to come out of Fox and ESPN’s races; Fox currently shows close to half the pre-Chase schedule, ESPN close to half the whole schedule, plus it would likely have to give up either the Brickyard or the Chase. I don’t think either of them want that, so I think both of them will persuade NASCAR (possibly with lots of little green slips of paper) to go back to two broadcast partners, thus giving each more races divvied up from the TNT package’s corpse.

But that doesn’t mean there won’t be drama; in fact, NASCAR is one of two sports that will play a key role in determining whether Fox launches its rumored all-sports network. There are several facets of this. First, when the last contract was negotiated, Fox was willing to abandon sports on FX, so it allowed ESPN to take the entire Nationwide Series schedule. Fox has since shown remorse for that decision and is interested in putting sports on FX again. But Fox also wants to shore up its NASCAR programming on Speed, to include more than practices, qualifying, the Truck Series, and the All-Star Race; they have voiced their desire to have Cup Series races on Speed. And perhaps most intriguingly, NASCAR quite clearly and obviously wants to launch its own network much like the other major leagues have, but such a network would conflict with the existence of Speed.

Regardless of anything else, I think NASCAR splits the Nationwide Series schedule across however many partners it ends up with, and allows Fox to move some of its Sprint Cup races to cable, whether FX, Speed, or a Fox Sports network. But the question of how to create a NASCAR network is the critical point. Fox could simply hand Speed over to NASCAR and continue to run it, but that’s not the only solution. I could see it going like this: Fox flips Speed to a Fox Sports network and hands its struggling Fuel network over to NASCAR, who flips it to a NASCAR network and allows Fox to keep running it. Fuel-turned-NASCAR-Network gets practice, qualifying, and most of the Truck Series; Speed keeps the All-Star Race (as well as some Truck Series races and the Gatorade Duels) into its new identity as a Fox Sports network, but also gets Fox’s new Nationwide Series and cable Cup Series races (and probably all of Fuel’s and most of FX’s UFC programming). (NASCAR may also hand some Truck Series races to ESPN and, if applicable, NBCSN as well. If Turner convinced CBS to jump on board, I imagine any Truck races and at least some Nationwide races they ended up with would end up on truTV.)

The rights agreements don’t actually expire until after 2014, and the last agreement was announced in December, but Fox is already in negotiations with NASCAR to get their deal renewed before the closed negotiation window ends next spring and the rights hit the open market. I have to imagine all of the above points are being heavily debated in the room (with Fox also not wanting to lose anything even if NASCAR takes on a third partner), meaning even with at least nine months before most of the deal gets done, the most important, game-changing part may be settled by the end of the year. Ultimately, though, all parties may well be in a bit of a holding pattern. The fate of a NASCAR network, a Fox Sports network, and the level of NBC’s interest in NASCAR may ultimately be determined by what happens with the ultimate stick-and-ball sport.

NBC Renews Relationship with Tour de France

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Been a long time since we last looked at the national sports TV wars, though does it count as “renewing” it when the broadcast contract belonged to CBS only two years ago and they inherited what they did get from the former Versus? Still, say what you will about the NHL, but Comcast’s rise to challenge ESPN for sports supremacy really got started when Lance Armstrong’s Tour de France-winning ways fell in the lap of a little outfit called the Outdoor Life Network. Now NBCSN and NBC will continue airing the Tour de France for another decade. (They’re also boasting about airing live stages on the NBC broadcast network starting this year, but I thought they did that last year too? In any case, you can bet ESPN wouldn’t be putting live stages on ABC…)

The bigger story, though, may be the break-up between CBC and Bell, who had teamed up to be the only serious contender for Canadian Olympic rights past 2012. Worse, Bell – owners of Canada’s only other all-sports network – has joined Rogers in saying it’s not interested in Olympic rights at all anymore. Does this mean CBC will have to try for the games on their own? Will Shaw, who owns one of Canada’s major broadcast networks but has no sports presence, step up? Will interest perk up if NHL players end up participating in the 2014 Games? Will Canadians have to watch the games from American coverage on NBC? Or could this open the door for Yahoo to put Canadian Olympic coverage on the Internet?

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Things are about to get even better for the NBA Champions…

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Apparently Fox can compete for local team rights in a competitive, high-value market as well.

Fox is breaking the bank and is about to at least quadruple the money they pay the Miami Heat – only the reigning and future NBA Champions and the most-talked-about team in the second-most demo-friendly league – closer to the per-viewer average the Lakers are getting from Time Warner Cable. This in a market where Comcast could have conceivably swooped in and snapped up the rights if they wanted to. Certainly there’s room for it – Florida, like Los Angeles, is a market where Fox runs two regional sports networks.

To be fair, though, this is an extention of a deal that still had three years left on it, so this is more of a case of Fox using its incumbent status to lock up a team without giving anyone else a chance in an open market. It doesn’t mean Fox has a massive advantage when it comes to locking up Dodgers rights…

CBS to launch national sports radio network

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Okay, this is… weird. Not two weeks after NBC announced it was teaming up with Dial Global – owners of the Westwood One radio network previously owned by CBS – on a sports radio network, CBS has announced it’s allying its own radio properties with those of Cumulus to form a sports radio network of its own.

For NBC (and possibly ESPN), this must be like an accelerated version of how they would feel if Fox launched an all-sports TV network. CBS is claiming that their network is instantly the “largest” and “most listened to” “major market” sports radio network, which is kind of a tall order, just given the sheer power of ESPN’s brand. But while CBS’ cable sports operations may be fast becoming the butt of the joke “your league is so small its games are on the CBS Sports Network”, there is no entity better equipped to compete in the sports radio landscape. CBS Radio owns market-leading stations in markets across the country, including the most storied sports radio station of them all, New York’s WFAN. All it would have to do is syndicate their better, more prestigious (and more nationally-focused) local shows to the rest of the country and it would have a powerhouse of a network, and a source of morning and afternoon programming for the CBS Sports Network. CBS may not be able to take the top spot right off the bat, but third place is a bare minimum for what it can do, and it could take second place away from Fox very easily, especially since most of Cumulus’ existing sports stations are currently ESPN stations.

This now means every entry in the sports TV wars has a corresponding radio operation except Turner, and an alliance between them and Yahoo Sports Radio would definitely be a mutually beneficial partnership at this point. But would it be worth much? Given the struggles Yahoo has already had finding stations, especially with stations more inclined to air local than national programming, I don’t think the market can support five sports radio networks (to say nothing of the miniscule Sports Byline and Sports USA networks) and I would expect at least one to fold by the end of 2013. Yahoo would seem to be the leader in the clubhouse for that dishonor unless it can somehow merge with one of the others.

The events of the past ten days may well be the “NBC/Comcast merger” of sports radio. Let the war begin.

What is the NBC Sports Radio Network?

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On Monday, the NBC Sports Group announced that they would be forming the NBC Sports Radio Network with Dial Global Networks, broadcasters of the NFL and NCAA Tournament. Jumping into the fray already occupied by ESPN, Fox Sports Radio, and Yahoo Sports Radio, and becoming the third of the three major contenders in the sports TV wars to start a network they can hook up with their TV rights, eh? Well… not so fast.

The network will launch with regular sports updates and occasional commentaries from NBC Sports personalities, with actual shows starting later. So that will form the basis for an actual network, with a full-day schedule like the other three, right? Well… maybe? Probably? Given the emphasis on streaming and podcasts, you’ll forgive me for scratching my head at how many of the shows would actually be heard on terrestrial radio stations. And will Dial Global’s NFL and NCAA coverage be rebranded as NBC Sports Radio Network programming? At the least, I would expect the NFL theme music to change from the current CBS theme to the Sunday Night Football theme…

Regardless, it’s an intriguing development and a sign that NBC is trying to catch up in its deficiencies to ESPN and Fox for the coming wars, and I can’t help but wonder if they’re trying to help Dial Global pick up baseball rights. With Dial Global’s reach, I would expect them to immediately leapfrog Yahoo for third place among national radio networks, especially if they can pick up distribution for NBC Sports personality Dan Patrick’s radio show from Fox – which could also be a big boon to NBC Sports Network. But considering how few stations Yahoo has, it will be very difficult getting stations to switch from any of the existing three networks, especially given most stations’ tendency to replace national with local programming whenever they can. Perhaps a streaming- and podcast-heavy strategy is the best one.

The race in sports talk radio – and perhaps even more, the radio play-by-play rights wars – just heated up considerably.

State of the Los Angeles Sports TV Wars

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Since forming a new regional sports network to show Lakers games, Time Warner Cable has not won many prizes… but the next-biggest prize has still not been settled.

While TWC was able to add Galaxy games, Fox Sports has locked up Angels and Clippers rights, and just did something very important: lock up the primary team in a sport. As the Kings go on a historic run to the Stanley Cup, Fox Sports has locked up rights to their games through 2024.

It’s a big PR win for Fox, but it might ring a little hollow; Los Angeles isn’t much of a hockey market, and by all accounts hasn’t even been paying attention to the Kings’ run. The real prize, and determinant of the balance between Time Warner Cable and Fox, will be the Dodgers rights expected to be awarded in October. In the end, all the awarding of the Kings’ rights may amount to is a sign that the Ducks may end up moving to Time Warner Cable.

Cox, the Hornets, and the local sports TV wars

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Fox may be losing its regional sports dominion to Comcast and Time Warner Cable, but that doesn’t mean it’s shrinking elsewhere, and for that it has Cox to thank. Fox was able to set up an FSN network in San Diego largely because then-rightsholders Cox pulled out of the bidding for Padres rights, and history appears to have repeated itself in New Orleans, where Cox, whose regional sports networks have had trouble getting carriage on non-Cox systems, has decided the best way to save itself from rising sports rights fees isn’t to join the party, but to do the opposite, give Fox a monopoly and hope that means Fox can shortchange the team on rights fees and pass the savings on to Cox.

My impression is that Cox can only do this because ESPN and CBS aren’t in the regional sports network business. (NBC is, but their RSNs are tied to Comcast’s cable business.) If there were multiple RSN groups that weren’t tied to cable operators, Fox wouldn’t be able to set the price for local sports rights, and Cox wouldn’t have any other options. If Root Sports were at all interested in expanding outside the three regional sports networks it already has, Fox wouldn’t be able to escape competition anywhere. That they are not could have a number of causes, from DirecTV not wanting to go head-to-head with the organization that spawned it to only holding those three regional sports networks until they can spin them off to someone else like Comcast. But Cox could find itself inside a nightmare if ESPN or CBS decided to take a piece of Fox’s RSN pie.

Comcast SportsNet has become a money-making machine, but I can’t help but wonder whether Time Warner Cable might find itself going the same route as Cox. If its new Southern California networks have trouble getting carriage on non-TWC carriers, they may decide they were better off on the other end of those carriage disputes. On the other hand, the Lakers are a far bigger deal than the Padres or Hornets, and other RSNs for big-name teams like YES managed to survive early carriage disputes, so Cox’s struggles might have more to do with the teams involved than anything else. Certainly Fox isn’t likely to be able to count on other cable operators having Cox’s generosity anytime soon.

Could the SEC Launch Its Own Network?

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Back in 2006, six months before Da Blog started, the Big Ten announced a lucrative TV deal that included a partnership with Fox to launch a network entirely dedicated to the conference. Although the Mountain West had started its own network, the spectacle of a BCS conference doing so, combined with the piles of money associated with it, made many wonder if such networks would become the wave of the future, one that had to be concerning for ESPN. And one conference that seemed almost certain to take that plunge was the king of college conferences, the SEC, whose own deal was coming up for renewal fast. Instead, ESPN paid off the SEC to the tune of over a billion dollars, and combined with the most-distributed syndication deal in sports history, complete with the branding of “SEC Network”, it seemed as though the SEC didn’t need to launch an actual SEC network.

In the years since, though, the Pac-12 and the University of Texas have announced the formation of their own networks, and they have proven so lucrative that the SEC has started having second thoughts. One might wonder if the SEC added Texas A&M and Missouri last summer as a pretense to reopen its TV deal and get a do-over on the whole network thing.

This would leave just the ACC and Big 12 as the only true major football conferences without their own networks. The ACC just extended its deal with ESPN without launching a network; presumably they felt that the SEC wouldn’t do it, but with the SEC now potentially starting a network in their backyard, combined with their new bowl agreement with the Big 12, they may now be screwed. Their football power is already substantially behind the others; now it may be permanently relegated to second-class citizen status. The Big 12 is largely hamstrung by Texas’ desire to have their Longhorn Network, rendering it too fractured and weak outside its biggest programs for a conference-wide network. That might not be a game-breaker, though, given the power of Texas and the aforementioned bowl agreement.