Why isn’t there more pressure from new t.v. rights deal?

[caulfield12]

The only possible way the White Sox could be earning less money this season is if NBC Sports Chicago took at least a 25% decrease from their rights fees from last season carrying all four teams.

But that's almost completely implausible, for the reasons highlighted below.

With the new split going from 20% to 25%, the White Sox, Bulls, NBC/Universal and Blackhawks would each be increasing in percentage ownership by 25% (decreasing from five to four partners.)

And the cable/satellite games are all worth more than WGN, so that means they would have to be earning even more money...not to mention the fact that the article below from the Tribune argues that NBC Sports is unlikely to lower their carriage fees even without the Cubs, meaning local subscribers will end up paying another $3-4 per month (estimated) for Marquee Network.   The NBC/Universal RSN rights fees would remain the same.

So that all means the White Sox SHOULD be increasing their local t.v. revenues from 25-35%, more or less.

So with $50 million in profits over the last two seasons (I guess we can subtract $5 million there for Abreu's signing bonus and another $5 million for deferred payments or options not picked up), we're sitting on at least $40 million in unallocated profits from the past two seasons and and then the expected new monies coming in beginning in February or not later than April from NBC/Universal. 

Yet, other than Grandal and swapping Mazara or Yolmer, we're SOMEHOW going to have a difficult time even reaching the $120 million mark in spending for 2020.

 

The Rocky Wirtz and Jerry Reinsdorf teams will stick with NBC Sports Chicago on a five-year deal that, according to Athletic sources, could be paying the teams a significant upgrade in subscriber fees. That’s important, because without some improvements, their ratings will be garbage without the Cubs.

https://www.soxmachine.com/2019/01/03/following-up-the-new-white-sox-tv-deal-is-official/

That’s good news for the White Sox, since NBCSN games generate more revenue. That’s good news for fans with both channels or those with MLBTV, as WGN’s production lagged behind NBC Sports Chicago’s. It’s good news for writers who are just about done reflexively using “CSN,” because that hard work will have been worth it. It’s bad news for cord-cutters and Jeff Vukovich.

https://www.soxmachine.com/2019/01/03/following-up-the-new-white-sox-tv-deal-is-official/
 

Given that a source told us the shorter length of the deal — the teams signed a 15-year deal when the original station, Comcast SportsNet Chicago, launched in 2004 — it wasn’t known if the teams will get any kind of upfront money for a new contract, though one industry source said he would be surprised if they do, considering those teams have ratings issues. Furthermore, the RSN business doesn’t look too rosy across the country, with Disney reportedly struggling to sell the Fox Sports Network stations it got in a deal with Fox.

But the teams owned by Reinsdorf will get a larger chunk of revenues from the station, given that the Cubs won’t be a part of it and that the majority of their games will be on the station, rather than split up with over-the-air WGN. The games broadcast on cable TV are much more profitable for the teams.

 

https://www.chicagotribune.com/sports/cubs/ct-cb-chicago-cubs-marquee-sports-network-questions-20191004-mgodjjxebzhilgqidzzn2cdn5y-story.html

Will I wind up paying a bigger cable bill if my carrier adds Marquee?

Not necessarily, but probably. That’s just the way these things work. No content provider is looking to scale back its carriage fees from what has been previously negotiated, not even the Cubs-less NBC Sports Chicago, which now will have more games than ever for fans of the Blackhawks, Bulls and White Sox.

So whatever Marquee charges is likely to be passed on to consumers instead of cutting into the carriers’ profit margin.

How much money are we talking about each month for Marquee?

That won’t be known until the Cubs start cutting carriage deals with major TV services in the Chicago area, and the figures won’t necessarily become public even then.

The Tribune reported in May that Chicago-area cable subscribers now paying around $9 per month for regional sports networks stood to pay $12 or $13 per month with the addition of Marquee, which would snag $6 or $7 of that total.

Edited December 13, 2019 by caulfield12

[Moan4Yoan]

Cuz it’s easier to be maintain a low payroll and milk the profits.  The cynic in me thinks that Jerry saw all the profits that the team made while touting the rebuild from maintaining a low payroll so he wants to milk it as long as he can.

Note how Hahn talked a big game about being very active in free agency before this offseason and acquiring two starters because the team was ready to take a step forward but this week he completely backtracked and talked about not rushing the rebuild.  WTF?!?  Does Hahn think we have no memory of his past comments?

Just because you fail to sign your #1 starting pitcher target (Wheeler) doesn’t mean you just stop then.  Have a freaking backup plan and acquire someone else.  The term “pivot” has been thrown around a lot this offseason but I don’t think Rick knows what it means...

”Well, we missed out on Machado, so let’s save that $250 million for next offseason.”  “Well, we missed out on Wheeler, so let’s save that $125 million for next offseason.”  This is a completely idiotic way to handle free agency.

Sox ownership and front office management is a massive shit show and they think we are all stupid enough to fall for their garbage.

Edited December 13, 2019 by Moan4Yoan

[caulfield12]

Balta has already mentioned having to (eventually) trade Giolito and Moncada before the end of 2023...like the Indians are doing with Lindor (two years before FA).

While waiting until at least the middle of 2022 would seem to be much more likely (as long as Hahn's still in charge at that point), there's probably no turning back at this point...at least with this ownership group and front office.

(Of course, the Indians are considering their third tear down since the early 2000's, but they also produced a number of playoff teams and even a near-World Series winner in 2016.)

Meanwhile, we haven't accomplished anything now in the last 12 years.   

Just don't see how White Sox fans could tolerate everything being blown up again unless you dumped Hahn/KW OR brought in new owners and completely transformed the way in which the franchise is being run.   We've been delayed by one year by Kopech's TJS, and now it looks like the exact same thing has happened with missing out on a single player in free agency, Zack Wheeler.   What kind of well-constructed rebuild plan could be so flawed and seemingly vulnerable?

Everyone can look across the current landscape of the American League and see the Astros, Yankees and Angels spending huge amounts of money to build World Series-contending teams.  The Rangers are entering a brand-new facility and can outspend the Sox if they so desire.  The Twins, Indians, A's and Rays are simply better-run organizations, and more efficient with resource allocation.   The Red Sox have won FOUR World Series in the past two decades and can instantly put together a contending team in the span of 18-24 months of retooling.

That leaves the White Sox, Blue Jays, Orioles, Royals, Tigers and Mariners.   The bottom 40% of the American League.   We can confidently say we're certainly better off than five of those teams (at least superficially), but we still have nine lined up in front of us to be passed.

That's another significant reason we couldn't convince Zack Wheeler to sign with us.  We're not relevant...until JR decides we are going to be part of the national baseball conversation again.

Edited December 13, 2019 by caulfield12

[bmags]

Hmm, good question. Probably because they've done a good job avoiding public disclosure of the expected increases.

 

[caulfield12]

42 minutes ago, bmags said:

Hmm, good question. Probably because they've done a good job avoiding public disclosure of the expected increases.

 

If you look at all these huge local RSN/broadcast rights deals...especially the Dodgers' one of over $2 billion that has been so controversial because the majority of local residents weren't even able to watch the games even though the team was raking in hundreds of millions...I can't think of a single one that has been shrouded in so much mystery.   Each new announcement has been trumpeted in the press and often has led to huge spending by those beneficiaries, like the Mariners going out and bringing in Cano and Nelson Cruz or the Phillies now being able to operate almost like the Yankees/Red Sox/Dodgers/Cubs/Angels/Nationals/Rangers/Giants/Mets/Astros.

Now, with the way things are breaking this off-season, not to go all Parkman/Conspiracy Theory here, but it seems exactly like the type of thing that you wouldn't want coming out so obviously in the local media...that they had an extra $50-75 million or whatever the number is to play with, but they weren't spending very much of it at all (although they're obviously trying to "spin" or sell Abreu's deal as part of this new "spending spree" even though they're the only ones who wanted it for three full years, along with Greg.)

Now LOGIC here would dictate the White Sox would actually be better off investing the money back into the product on the field so that they would be in a dramatically improved position to renegotiate again after the 2024 season with local ratings comparable to what the Cubs are/were drawing (from 2015-2019)....which should ALSO be right in the middle of their contention/playoff window, even if they couldn't hold onto Moncada and/or Giolito.

 

One thing that makes sense is that some quant wizard determined by running a cost-benefit analysis that they might be better off just sitting on the profits because the ratings of the Bulls and Blackhawks are also likely to decrease or decreasing, and the White Sox alone improving wouldn't be enough to create much movement in the overall value of NBC Sports Chicago/NBC-Universal.

As much as we like to argue the Bulls and White Sox are fire-walled or separated from each other (certainly, profits from one are not going to subsidize losses with another...or allow for deficit spending, etc.), this seems to be ONE case where the simultaneously depressed local ratings for all three teams make it financially unwise for the White Sox to spend well beyond their historical norms (and we're not even close to the $120's and 130 millions from a decade or so ago!) because it won't move the meter enough to outweigh the depressed value of the entire package due to the Blackhawks and Bulls dragging everything down.

(Of course, we could just as easily argue that significant improvements from the Bulls AND White Sox, irrespective of the Blackhawks...would be enough to drive up the value of the entire network significant for the re-negotiations in five years' time.

Edited December 13, 2019 by caulfield12

[bmags]

14 minutes ago, caulfield12 said:

If you look at all these huge local RSN/broadcast rights deals...especially the Dodgers' one of over $2 billion that has been so controversial because the majority of local residents weren't even able to watch the games even though the team was raking in hundreds of millions...I can't think of a single one that has been shrouded in so much mystery.   Each new announcement has been trumpeted in the press and often has led to huge spending by those beneficiaries, like the Mariners going out and bringing in Cano and Nelson Cruz or the Phillies now being able to operate almost like the Yankees/Red Sox/Dodgers/Cubs/Angels/Nationals/Rangers/Giants/Mets/Astros.

Now, with the way things are breaking this off-season, not to go all Parkman/Conspiracy Theory here, but it seems exactly like the type of thing that you wouldn't want coming out so obviously in the local media...that they had an extra $50-75 million or whatever the number is to play with, but they weren't spending very much of it at all (although they're obviously trying to "spin" or sell Abreu's deal as part of this new "spending spree" even though they're the only ones who wanted it for three full years, along with Greg.)

Now LOGIC here would dictate the White Sox would actually be better off investing the money back into the product on the field so that they would be in a dramatically improved position to renegotiate again after the 2024 season with local ratings comparable to what the Cubs are/were drawing (from 2015-2019)....which should ALSO be right in the middle of their contention/playoff window, even if they couldn't hold onto Moncada and/or Giolito.

 

One thing that makes sense is that some quant wizard determined by running a cost-benefit analysis that they might be better off just sitting on the profits because the ratings of the Bulls and Blackhawks are also likely to decrease or decreasing, and the White Sox alone improving wouldn't be enough to create much movement in the overall value of NBC Sports Chicago/NBC-Universal.

As much as we like to argue the Bulls and White Sox are fire-walled or separated from each other (certainly, profits from one are not going to subsidize losses with another...or allow for deficit spending, etc.), this seems to be ONE case where the simultaneously depressed local ratings for all three teams make it financially unwise for the White Sox to spend well beyond their historical norms (and we're not even close to the $120's and 130 millions from a decade or so ago!) because it won't move the meter enough to outweigh the depressed value of the entire package due to the Blackhawks and Bulls dragging everything down.

(Of course, we could just as easily argue that significant improvements from the Bulls AND White Sox, irrespective of the Blackhawks...would be enough to drive up the value of the entire network significant for the re-negotiations in five years' time.

Have the cubs stated their expected revenue gains?

I imagine the bolded is the reason why theres more mystery.

[caulfield12]

4 minutes ago, bmags said:

Have the cubs stated their expected revenue gains?

I imagine the bolded is the reason why theres more mystery.

https://www.chicagotribune.com/sports/cubs/ct-cb-chicago-cubs-more-marquee-questions-answered-20191109-2wuk23netnfivoexdezts4u7dq-story.html

Still an ongoing mystery with monthly Trib updates...we might not even know until February when Marquee starts carrying spring training games.

[Look at Ray Ray Run]

With the blackouts ending, smart teams are getting out in front of streaming; I'm actually surprised not to see the sox pushing anything here.

Yankees signed a contract with Amazon to stream their games. Teams need to find a way to profit off something other than cable tv prices. The yankees teaming with amazon was one of the implied reasons they went back to the mega deal hammer for cole.

Edited December 13, 2019 by Look at Ray Ray Run

[caulfield12]

https://nypost.com/2019/12/03/yankees-teaming-up-with-amazon-to-stream-games/

[mqr]

3 hours ago, Look at Ray Ray Run said:

smart teams

surprised not to see the sox

🤔

[Bob Sacamano]

3 minutes ago, mqr said:

🤔

Two things that do not go together lol

[Bob Sacamano]

3 hours ago, Look at Ray Ray Run said:

With the blackouts ending, smart teams are getting out in front of streaming; I'm actually surprised not to see the sox pushing anything here.

Yankees signed a contract with Amazon to stream their games. Teams need to find a way to profit off something other than cable tv prices. The yankees teaming with amazon was one of the implied reasons they went back to the mega deal hammer for cole.

Wait, is this true? My free MLBTV subscription will actually have value?

[Look at Ray Ray Run]

40 minutes ago, mqr said:

🤔

From a business standpoint the sox are really savvy which makes them not spending really tragic. 

The Sox were at the forefront of taking ownership in their cable channels to get a % cut guaranteed instead of a yearly contracted amount thats flat. Some teams started their own network like the Yankees but the Sox weren't in a position to do that. 

Maybe they are looking at streaming revenues.

I know they didnt spend a lot last year but they also didnt generate any real attendance and they were still the 6th most profitable team I  mlb baseball. The sox know what they're doing from a business and money making standpoint.

Edited December 13, 2019 by Look at Ray Ray Run

[Look at Ray Ray Run]

35 minutes ago, soxfan2014 said:

Wait, is this true? My free MLBTV subscription will actually have value?

Yes, baseball is now in the 21st century.

[Balta1701]

2 minutes ago, Look at Ray Ray Run said:

From a business standpoint the sox are really savvy which makes them not spending really tragic. 

The Sox were at the forefront of taking ownership in their cable channels to get a % cut guaranteed instead of a yearly contracted amount thats flat. Some teams started their own network like the Yankees but the Sox weren't in a position to do that. 

Maybe they are looking at streaming revenues.

I know they didnt spend a lot last year but they also didnt generate any real attendance and they were still the 6th most profitable team I  mlb baseball. The sox know what they're doing from a business and money making standpoint.

Most people would say that having taken this team to a cable channel too early turned out to be a nightmare for the franchise that helped set back their revenue streams for more than 3 decades now because it surrendered the city to a competing franchise. 

[Look at Ray Ray Run]

2 minutes ago, Balta1701 said:

Most people would say that having taken this team to a cable channel too early turned out to be a nightmare for the franchise that helped set back their revenue streams for more than 3 decades now because it surrendered the city to a competing franchise. 

Eh, the Cubs decision to streamline their game on a national channel was a smart move back then, but when judging the Sox TV revenues vs their perceived fan base interaction they've done incredibly well. Also, given that most every team went the cable direction it's hard to be critical. 

You could argue the Sox haven't made the best move in regards to expanding their fan base, but baseball is such a regional sport I don't really see immense value in making your games nationally televised in the modern game. When the Braves and Cubs had national coverage it clearly grew their brand, but I'm not sure how feasible that angle is today. Because Jerry was one of the first to market on these ownership % deals, he did incredibly well because he timed it with the cable boom.

Edited December 13, 2019 by Look at Ray Ray Run

[caulfield12]

That regionalization was especially important when teams like the Royals and Cardinals had radio networks extending across 12-15 states and teams fought each other for territory city by city...I’m not sure what team today would realistically have a chance to even break out of regional and more into a national appeal outside of the Yankees, Red Sox, Dodgers and Cubs.

Guess one could have legitimately argued the Astros but probably not anymore.  It would also take a Patriots-esque winning stretch, which is almost impossible to accomplish in baseball.

 

[pcq]

4 hours ago, Look at Ray Ray Run said:

With the blackouts ending, smart teams are getting out in front of streaming; I'm actually surprised not to see the sox pushing anything here.

Yankees signed a contract with Amazon to stream their games. Teams need to find a way to profit off something other than cable tv prices. The yankees teaming with amazon was one of the implied reasons they went back to the mega deal hammer for cole.

Would have to be negotiated with their cable or broadcast partner. Insemination es prohibido.

[Jose Abreu]

2 hours ago, soxfan2014 said:

Wait, is this true? My free MLBTV subscription will actually have value?

 

1 hour ago, Look at Ray Ray Run said:

Yes, baseball is now in the 21st century.

Are you sure about this? I just researched this a bit and couldn't find any information regarding the blackouts ending.

[Look at Ray Ray Run]

26 minutes ago, Jose Abreu said:

 

Are you sure about this? I just researched this a bit and couldn't find any information regarding the blackouts ending.

https://sports.yahoo.com/the-pen-mlb-owners-vote-could-be-big-news-for-baseball-fans-cutting-the-cord-200214832.html

I was incorrect regarding MLB.TV though - they will not be apart of this at the start; blackouts will still exist.

"Asked to clarify what exactly the “revised interactive media rights agreement” looks like, Manfred said, “The biggest single change was the return of certain in-market digital rights — the rights that have essentially become substitutional with broadcast rights — those rights will return to the clubs.”

When the Yankees reacquired YES Network, it was under the premise that they would gain exclusive rights to sell their streaming services locally:

Asked how the deal might affect the digital streaming rights to Yankees games within the team’s market, club president Randy Levine said he expected Major League Baseball to announce changes to its policy soon. Teams cannot currently sell digital rights to local broadcasts.

Now, apparently, they can.

[caulfield12]

https://theathletic.com/1459378/2019/12/14/editors-column-its-not-just-about-jim-boylen-the-bulls-need-a-major-change/?source=dailyemail

 

Jerry Reinsdorf’s watchword is loyalty and he trusts Paxson. As he should. In Melissa Isaacson’s engrossing feature on Paxson from 2017, Reinsdorf said some of the arrows Paxson has taken should have been pointed at him.

“Sometimes, his hands are obviously tied by financial decisions you have to make,” he said.

Have to make? Uh-huh.

At this stage of Jerry’s life, a change in management would only come from Michael Reinsdorf’s urging with his father’s blessing. Jerry isn’t going hunting for new leadership and Paxson himself has essentially said in interviews that the only way he’s leaving is by quitting. 

Paxson knows the game and is passionate about his job, but everyone has a shelf life and the Reinsdorfs should have overhauled everything five years ago instead of just firing Tom Thibodeau, the second-best coach the organization has ever employed. Then again, the Bulls would probably be better off if they sold the team. But that’s not happening.

Sounds quite familiar...especially the parallels on the coaching, front office and obviously ownership side.

 

One interesting subplot to this season is the team’s rare attendance problems. Going into Saturday’s game, the Bulls were 11th in average attendance and 23rd in capacity, with a decrease of 3,000 fans per game and a drop in capacity of 15 percent since the 2016-17 season, the last time the team made the playoffs.

I went to Wednesday’s game as a fan and there were open seats to my right and left in the 100 level. Chunks of empty seats dotted the lower bowl. In the 300 level, there were entire sections with only a handful of people. As a fan, the crowd was actually rather pleasant. Lines were shorter and the concourses were lively, but not packed. It was a breeze getting in and out of the stadium and parking lot.

A good deal of fans’ first response to this organization is disgust. They expect to see bad starts and blown leads.

A tangible decline in interest can’t excused or ignored or blamed on Rose’s knee injury from 2012. Something has to be done and soon.