What can you expect from the Cubs new cable network? Part 2
|Wednesday, August 29, 2018 8:20 AM- -|
Each team network has had some issues related to starting out, some were relatively minor, and some were, and are significant issues. There is no question the money being raised by these teams off the new TV ventures gives them a considerable advantage over other teams. Millions of dollars are being generated through advertising and through rights fees that are paid directly to the clubs and not shared by a broadcast partner.
Most teams are asking $3-5 per subscriber to be paid by the cable/satellite provider to broadcast these games. This is a fairly hefty fee, and generally, providers roll this into a sports package they will offer to bury the cost some. Nonetheless, for the providers to get their money back, they need to see people buying the package.
NESN, when they started out, faced viewer pushback because some areas had a cable monopoly and they had no other choice if they wanted to see the games. These monopolies were gauging subscribers to see the Red Sox. Costs in New England to get the Red Sox package in HD can cost up to $160 per month. If you tried to move to a streaming service, by the time you added in the HD upgrade, and other necessary things needed it was the same as buying thru cable.
When the Yankees launched YES, the largest cable provider in the metro area was Comcast, and they offered the channel to viewers. They had a handshake agreement with the Yankees to continue to broadcast. YES, even though Comcast initially had the rights. However, two years later, in 2016, Comcast told the Yankees that the $5 per subscriber fee was too high and they would not pay that and dropped the network, thereby blacking out Yankee games to nearly 900,000 viewers in the metro area.
Fox, which owns 80% of YES, immediately started a media advertising blitz ripping Comcast and telling fans to switch to Direct TV or Verizon’s FiOS. Comcast held out for one year and in March of 2017 was able to work out an agreement with YES and has resumed broadcasting the channel. You can imagine the Yankee fans were not happy not having games to see for a year.
When the Expos relocated to Washington DC, they were moving right in the middle of the broadcast sweet spot of MASN who are owned by the Baltimore Orioles. The Orioles went to MLB, and the courts, to stop the Nationals from being broadcast anywhere in the MASN broadcast area claiming they held the exclusive rights to that geography. Eventually, an agreement was reached, and the Nationals were allowed to buy 10% of MASN to appease the Orioles. While the Nationals paid the price for this, the Orioles are still unhappy about the arrangement. This unhealthy alliance may change down the road, and you may see future lawsuits.
The only cable venture that seems to have avoided any significant hiccups is the New York Mets SNY launch. In 2006 they launched SNY, and by 2011 it was reported to be worth nearly $68 million to the Mets. Earlier this year Bloomberg stated that the Mets total value was $2.1 billion and $1.2 billion of that was due to the TV network. That means that more than half of the Mets total worth is due to its broadcasting revenue.
The one thing all these networks discovered, as have most other single topic channels, is that you can only show so much Red Sox or Yankees baseball before people stop watching, especially in the offseason. As such, they have all added programming from outside sources including college football, pro football, hockey, and basketball, along with soccer or other things to make the network viable all year long.