Ballmer Turns Down $60 Mil Per Year Local TV Deal

[TucsonClip]

[tweet]https://twitter.com/basketballtalk/status/637309179703595009[/tweet]

Love Ballmer using his vision, strengths and background to negotiate a better deal.

[madmaxmedia]

I'd rather be able to just watch Clipper games on free local TV...

[nickhx2]

extremely smart if he can turn this into an online streaming thing.

[Slava]

This could be interesting for a variety of reasons. Just from a layman's point of view:

1. First and foremost will the NBA allow him to stream his games while the NBA LP broadband exists?
2. How many subscribers will he need and how much does he plan to charge for a season's service to make a profit?
3. Does he plan to sell advertising on his streaming source to recoup some of the money?

[nickhx2]

don't know how the first thing will work legally, but my guess is the big money will be from creating the first in-house model for an individual team (that i know of).

[Forte IV]

I'd rather be able to just watch Clipper games on free local TV...

Primeticket aint free. Part of a cable/etc. package

[mkwest]

Clippers owner turns down $60M offer for TV rights

Prime Ticket currently pays the team a rights fee of $25 million a year — and offered a 140 percent increase, to $60 million, but the billionaire Ballmer turned it aside.

Prime Ticket’s exclusive negotiating window closed in June, one source said — meaning Ballmer is free to negotiate with others.

Some observers think the bombastic Ballmer is merely using the threat of forming an over-the-top network as a play to wring more mon­ey from an RSN.

But others think the plan is real.

“Steve Ballmer has not renewed his deal with Fox,” said one source close to the situation. “He’s looking at a [digital] subscription channel.”

While he may have the technological smarts to pull it off, Ballmer may find it hard to earn more than $60 million in revenue a year from a single sport streaming RSN, experts said.

The Clippers would have to sign up around 10 percent of LA’s 5 million households and get a pretty high price for the service, those people said.

“If it costs $12 per month, multiply that by 12 months in 500,000 homes, it would add up to $72 million — but then you’d have to produce the games and market the product,” said one.

And that’s if Ballmer can give fans a reason to subscribe during the five-month off-season.

If he can’t, revenue would only come to $42 million.

Claire Atkinson, NY Post

[tweet]https://twitter.com/ArashMarkazi/status/637363867182612480[/tweet]
[tweet]https://twitter.com/ArashMarkazi/status/637364005758193665[/tweet]
[tweet]https://twitter.com/ArashMarkazi/status/637364066856665088[/tweet]
[tweet]https://twitter.com/ArashMarkazi/status/637364106236952576[/tweet]

[Ranma]

Ballmer hasn't really been a visionary. He was made rich by primarily being a loud and brash cheerleader for Bill Gates and Paul Allen and, even then, he squandered a lot of opportunities during his tenure there. To be honest, his approach to running the Clippers is similar to his stewardship of Microsoft: throw a lot of money at something and hope for the best without taking in the whole picture.

Immediately extending Doc and empowering him with personnel decisions has led to squandered assets and opportunities in a limited window of competing for a championship with unrealized expectations. Continuing on with the Microsoft way of doing business is an example of the previously discussed dysfunction not because of impaired execution of plans but more because of poor and unhealthy behavior that would lead to long-term downfall.

To be honest, the Clippers would probably be better off getting a better deal from Fox given Ballmer's hard-headedness and myopic blinders with regards to technological breakthroughs, but I would like to see the Clippers launch their own network. If he were half-way decent in being business savvy, he should be able to pull it off with the experience and resources available to him, but his track record has shown otherwise.

The Dodgers contemplated going with their own network as well but ended up getting a $8.35 billion, 25-year deal from Time Warner Cable for their television rights. That's an average of $334 million per year, so the current offer of $60 million per year from Fox or even the $125-million-per-year projection in the valuation book from the sale referenced below seems relatively low even with the difference between an 82-game and 162-game seasons.

[tweet]https://twitter.com/AlbertRandom1/status/637326368146092033[/tweet]
[tweet]https://twitter.com/AlbertRandom1/status/637326307731337216[/tweet]

[Roscoe Sheed]

I prefer watching games on a one hour delay on DVR. I wonder if such a thing would even be possible for streaming. I hope they remain on cable.

When does the current contract end?

[Roscoe Sheed]

Also, would the NBA allow a team to stream its games? How would that work if you bought league pass on cable but couldn't watch the Clippers because it is only a stream option?

[Roscoe Sheed]

Just read that the current deal ends after this season

[Ranma]

Those are interesting questions and aspects to ponder. Obviously, none of us know how things will play out until more news is reported, but I would think the selling point would be convenience, which should include availability and ease of use on mobile as well as features such as on-demand replay. I would also think incorporating advanced features such as SportsVU and other broadcast enhancements will be targeted implementations but likely too ambitious in the initial roll-out.

The possible conflict with NBA League Pass is also an interesting point, but verbiage in the reports have mentioned the Clippers negotiating "local" broadcast rights, which poses the question of who owns the national broadcast rights to NBA teams. I would think the league does. In any case, League Pass is overpriced and should have it's price lowered IMO as a value package for all games, but we know the NBA would frown upon changing their pricing model.

There's also been talk of implementing a hybrid model, which makes it available on both cable and online streaming, which I guess would also apply to League Pass.

If the Clippers were to implement a streaming service to be available only to "local" fans, it then poses the question how would they restrict to such users without making the service offering glitchy with all the DRM software to be added.

[Neddy]

call me old school, but I would much rather pay more $$ to the conventional medium over having to give out my personal info to a new kind where I am always hesitant about hacking. add that 12 dollars on my directv, I am already paying a fortune like an idiot as is anyway. I don't even understand rationally why I pay to watch my Raiders lose most sundays anymore but like a effing robot, it is a innately programmed ritual I must do. and I prefer to watch my games on my bigass POS Mitsubishi TV I had to swap the chip myself and now I wanna get my money's worth.

PS- as a former owner of a Mitsubishi Car and a current owner of a 60 some inch rear projection Mitsubishi TV, DONT EVER BUY THEM SONSOFBISHIs. their customer service is the worst in my 40 years of life. the guy on the phone when I called the mitsu's customer service when my TV went astronomically dot happy, the **** told me literally "well tough luck, your model isn't on the recall list" even though mine had exact same issues of the recalled models specifically described as "recall-able" reasons... and told me he can call a local Mitsu's repairman come and fix it at my cost, like that is a **** helping hand I couldn't do myself. I ended up buying the chip off the Amazon and installed it myself for a fraction of the cost. don't even start me on their cars.

[madmaxmedia]

Great post, as someone who follows technology it was weird to see a collision between high tech industry and my favorite basketball team. I've never been a Ballmer fan, he seems like a great guy to run your sales, but much less so to direct a company's long term strategy.

I've been more accepting of the power given to Rivers than most here, probably because I was afraid of potentially more serious blunders Ballmer could have made. I think there can be a lot of hubris in the tech world (hey they've earned it!), I didn't want to see Ballmer come in thinking he could "figure the sport out" and try to be the cleverest guy in the room. As bad as Sterling was, the basketball side has been doing very well, so I'd rather see no changes rather than some major reset.

I do like that Ballmer seems to be a genuine basketball fan.

Ballmer hasn't really been a visionary. He was made rich by primarily being a loud and brash cheerleader for Bill Gates and Paul Allen and, even then, he squandered a lot of opportunities during his tenure there. To be honest, his approach to running the Clippers is similar to his stewardship of Microsoft: throw a lot of money at something and hope for the best without taking in the whole picture.

Immediately extending Doc and empowering him with personnel decisions has led to squandered assets and opportunities in a limited window of competing for a championship with unrealized expectations. Continuing on with the Microsoft way of doing business is an example of the previously discussed dysfunction not because of impaired execution of plans but more because of poor and unhealthy behavior that would lead to long-term downfall.

To be honest, the Clippers would probably be better off getting a better deal from Fox given Ballmer's hard-headedness and myopic blinders with regards to technological breakthroughs, but I would like to see the Clippers launch their own network. If he were half-way decent in being business savvy, he should be able to pull it off with the experience and resources available to him, but his track record has shown otherwise.

The Dodgers contemplated going with their own network as well but ended up getting a $8.35 billion, 25-year deal from Time Warner Cable for their television rights. That's an average of $334 million per year, so the current offer of $60 million per year from Fox or even the $125-million-per-year projection in the valuation book from the sale referenced below seems relatively low even with the difference between an 82-game and 162-game seasons.

[tweet]https://twitter.com/AlbertRandom1/status/637326368146092033[/tweet]
[tweet]https://twitter.com/AlbertRandom1/status/637326307731337216[/tweet]

[madmaxmedia]

I'd rather be able to just watch Clipper games on free local TV...

Primeticket aint free. Part of a cable/etc. package

You are of course right, it's free to me only in the sense that I already pay for it.

When did they stop doing games on Channel 9 or 5 or whatever? Those were the days.

[Ranma]

[tweet]https://twitter.com/AlbertRandom1/status/637326235266363392[/tweet]
[tweet]https://twitter.com/SherwoodStrauss/status/638434752219885568[/tweet]
[tweet]https://twitter.com/SherwoodStrauss/status/638435259659390976[/tweet]

[Akklaim1]

Clipper games in the LA market are already legally streamed via FOX Sports Go. That started last year when the NBA and FOX agreed to stream live NBA games of teams that are affiliated with Fox Sports regional networks in their respective markets.

If Ballmer gets the green light from the league to go for this business, then more teams and possibly from other sports will follow the trend. Say bye-bye to cable and satellite TV because sports are essentially the only reason why people still pay cable/satellite bills.

[Roscoe Sheed]

Strauss post about the Lakers crushing the Clippers on TV ratings needs a caveat- that the ratio is probably far better than it was 5-6 years ago. It's not like the entire city is going to switch allegiances that fast.

[QRich3]

I'm glad Ballmer is pushing for this, cable needs to be extinct sooner rather than later, people only pay for it mostly to watch sports nowadays, and it's only because they're forced to only watch it that way. If Ballmer can pioneer a move to on-demand streaming in all of sports, it will only be good for us consumers.

I've been more accepting of the power given to Rivers than most here, probably because I was afraid of potentially more serious blunders Ballmer could have made. I think there can be a lot of hubris in the tech world (hey they've earned it!), I didn't want to see Ballmer come in thinking he could "figure the sport out" and try to be the cleverest guy in the room. As bad as Sterling was, the basketball side has been doing very well, so I'd rather see no changes rather than some major reset.

But DTS only had the basketball side running well in his late years because he stumbled into Olshey who was the smart dude that built everything. And he managed to run him out of town to a rival, so a lot of this oh-the-Clippers-are-chokers-2nd-round-artists narrative can be traced to that last move Sterling made. The best thing for us is not that Ballmer tries to be the cleverest guy in the room, it's that he finds one of those clever guys to run the basketball side for him. Doc is clearly not that guy. Say the Durant situation goes south in OKC and Presti is unemployed next May, if he can push Doc back to only coaching and hire a Presti-type to run the FO, it'd be the best situation to ever happen to the Clippers. A good roster, a good coach, a good FO, and good ownership. We've never had all of those things happening at once.

Let Ballmer push his ideas in the business side, like the streaming one (which, I don't care about his previous reputation, is a great idea for everyone) and find someone competent to run the basketball side for him. He only got stuck with Doc because he was the hero during the DTS saga and made a power play before Ballmer got the reigns. It'd have been a press disaster to undo the moves Doc made while the Clippers were owner-less, and Doc knew that, that's why he made them. But I refuse to think Ballmer didn't take note of everything that happened in that period.

[madmaxmedia]

I'm glad Ballmer is pushing for this, cable needs to be extinct sooner rather than later, people only pay for it mostly to watch sports nowadays, and it's only because they're forced to only watch it that way. If Ballmer can pioneer a move to on-demand streaming in all of sports, it will only be good for us consumers.

That's a great point actually. It would be even nicer if this hypothetical streaming service could be accessed via, gasp, Apple TV.

But DTS only had the basketball side running well in his late years because he stumbled into Olshey who was the smart dude that built everything. And he managed to run him out of town to a rival, so a lot of this oh-the-Clippers-are-chokers-2nd-round-artists narrative can be traced to that last move Sterling made. The best thing for us is not that Ballmer tries to be the cleverest guy in the room, it's that he finds one of those clever guys to run the basketball side for him. Doc is clearly not that guy. Say the Durant situation goes south in OKC and Presti is unemployed next May, if he can push Doc back to only coaching and hire a Presti-type to run the FO, it'd be the best situation to ever happen to the Clippers. A good roster, a good coach, a good FO, and good ownership. We've never had all of those things happening at once.

Oh yeah, if it ever appeared I gave Sterling any credit then I was not clear about that! I was really disappointed when Olshey left.

I love the idea of landing a new GM like Presti, and pushing Doc back to only coaching. Hopefully he would see it as a better arrangement where he could focus on coaching, and work with a great GM who focused on, well, GM stuff. As opposed to seeing it as a demotion. Actually, if we had only retained Olshey I'd be pretty much 100% satisfied.

Overall, I'm basically fine though with the current Clipper state of affairs, especially with the offseason acquisitions. I understand the criticisms of Doc's drafts and young player development, but honestly late round 1st's typically don't amount to much anyway, par for the course is a bench guy/role player. He definitely skews towards a 'win now' approach, but I accept that given that our 2 star players are in their prime years right now. And like I said, I thought we did great this offseason with the vets we added.

I think the Clippers will be very fun to watch this year.