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Globe article on Jays TV deal

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Globe article on Jays TV deal 

Post#1 » by Geddy » Sat Feb 18, 2012 3:09 pm

The television rights fees paid to the Toronto Blue Jays from parent company Rogers Communications Inc., have fallen behind the skyrocketing regional TV revenues being earned by some teams in the United States.

Major-league teams are reaping new deals from regional television networks for as much as $150-million annually, and they are leveraging the windfalls to bring in premium talent. In contrast, sources say the Blue Jays earn approximately $225,000 a game in television rights fees, or a total of $36-million for 162 games from Rogers Sportsnet, a cable sports network also owned by Rogers Communications.

The Greater Toronto market is the seventh largest in major-league baseball. However, under MLB criteria, all of Canada is protected Blue Jays territory, and on that basis Toronto arguably plays in the largest market by population and territory. The Sportsnet contract with the Jays covers all of its regional stations, and Jays games are broadcast nationally.


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Nothing really earth shattering here but just another example of how Rogers has fallen into a great situation where they own the team, and the only channels that broadcast games so they can set the bar low on how much they want to spend on the team.

I can't wait for the day when those penny pinchers decide to sell the team to someone that actually gives a damn about winning and not the bottom line.
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Re: Globe article on Jays TV deal 

Post#2 » by torontoaces04 » Sat Feb 18, 2012 3:11 pm

Thanks for posting. This is the root of the problem.
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Re: Globe article on Jays TV deal 

Post#3 » by Mattd97 » Sat Feb 18, 2012 3:40 pm

woah woah woah im pretty sure posters here claim that our tv contract is perfectly respectable and fair.

but seriously imagine if we were owned by "non-multimedia owner X" and rogers and tsn had to get in a bidding war over jays games.
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Re: Globe article on Jays TV deal 

Post#4 » by sonn » Sat Feb 18, 2012 3:42 pm

Mattd97 wrote:woah woah woah im pretty sure posters here claim that our tv contract is perfectly respectable and fair.

but seriously imagine if we were owned by "non-multimedia owner X" and rogers and tsn had to get in a bidding war over jays games.

I doubt any major bidding wars would happen for any Toronto sports teams not named Maple Leafs.
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Re: Globe article on Jays TV deal 

Post#5 » by WpgPage » Sat Feb 18, 2012 4:57 pm

Well that 36 number seams low it says in the article that Detroit is only getting 40/ year right now so depending on when this deal was signed it vary well could have been fair market value. Again with these negotiations all in-house we will never know. The Jays are never going to get the numbers the big US teams get Baseball is just not viewed as popular enough in Canada to warrant those numbers. The Jays will be fully off revenue sharing by 2015 so the TV deal will have to increase in order to cover that lost money. All in all I really don't like this article at all the writer is clearly biased on this issue and there is no information about when that deal was signed or it's term critical factors that you need to know before you can start ripping the Jays apart for this one.

However, if they Jays renegotiate a deal at the same level for the next few years then Beaston should be fired to have little or no growth in revenue when the ratings for the team have nearly doubled is ridiculous. I already think he should be fired over his comments at the state of the franchise address regarding contract length, not that I really disagree with him, but you can't handicap your GM's negotiating position like that. Hopefully the next CEO of the Jays is hired by the Jays and not by Rogers.
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Re: Globe article on Jays TV deal 

Post#6 » by satyr9 » Sat Feb 18, 2012 6:17 pm

Anyone know what a 30 second spot goes for on sportsnet during a Jays telecast? I'd say if it's over 10k (and I'd imagine it is) then 36m is quite low, if it's an accurate number. My main problem with the number as reported is the use of "sources." Not "sources inside the team" or "inside sportsnet" or "inside rogers" or even "reliable sources" or "documents obtained by..." or anything. No real attribution of any kind means the source could be two guys talking at the table next to the reporter in a restaurant. To be fair, I wouldn't imagine the Globe actually lets that through (Sun being a different story), but they don't have to go too far beyond that before editorial let's him run with the story as is in today's ravenous fight for eyeballs and attention. For instance, sources with that style of attribution could be Jays beat reporters and some random tv exec who thinks the numbers are plausible with no real info. They could be fantastic sources for all I know, but if they are rock solid sources, they should make that clear and that's not a mistake their editorial would make so I feel very comfortable saying those "sources" are weaksauce.

Which in and of itself doesn't make anything they said untrue. So what does that 36m vs. 150m actually mean?

Consider that, just doing some lame estimates, 150m in rights fees plus 20m in studio/camera/talent costs plus xxx for overhead (the xxx's is really where things are very hard to know and would drastically seperate sportsnet from a regional broadcaster) and 20% for profit, 5 spots per half inning break (17 breaks for 85 ads), a station needs about 20-22k (variance s to allow for overhead equal to 1-1.5 times the profit) per ad to make their money vs. 9k-16.5k per ad( enormous variance for overhead equally 1.5-2 times the regional network's super fuzzy overhead estimate) for sportsnet if 36m is accurate and I'm only using 150 games 'cause if I'm underselling anywhere it's in the cost of producing baseball games, although I'm allowing for over 100k per game just to do the camerawork and commentary and assuming the pre and post game studio shows can pay for themselves through their own advertising and doesn't factor in any rights deals for highlight packages or anything else.

So, to be clear I'd say that for a Texas sports network to reap any benefits from spending 150m a year on Rangers' rights, they'd need 20-22k per spot on average. For the Jays to reap benefits from a 36m deal, based on the idea their overhead to run nationally is much higher, they'd need 9-16.5k to make their profit (and almost 100% variance means I know **** all). Now, those numbers are way way closer together than 36m and 150m, but we also know they have higher total viewership than most because of their national presence. Basic point being they are not a 150m/yr product despite the total viewer numbers across Canada, but if some are going for 150m, they're probably worth far more like 80ish a year, maybe 100m, instead of 36m.

BTW, this was just me doing a little exercise, I'm sure there are a million ways to 100% discount what I just did. I usually just delete stuff like this without ever posting, 'cause who really cares, but I kind of think it makes a decent general point, just please don't take it too seriously. If you want to rage at Rogers this shouldn't discount that and if you want to point out how flawed the article is it shouldn't affect you either. Basically, I think both those things are perfect and not even oppositional responses to the article.
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Re: Globe article on Jays TV deal 

Post#7 » by dagger » Sat Feb 18, 2012 6:37 pm

WpgPage wrote:Well that 36 number seams low it says in the article that Detroit is only getting 40/ year right now so depending on when this deal was signed it vary well could have been fair market value. Again with these negotiations all in-house we will never know. The Jays are never going to get the numbers the big US teams get Baseball is just not viewed as popular enough in Canada to warrant those numbers. The Jays will be fully off revenue sharing by 2015 so the TV deal will have to increase in order to cover that lost money. All in all I really don't like this article at all the writer is clearly biased on this issue and there is no information about when that deal was signed or it's term critical factors that you need to know before you can start ripping the Jays apart for this one.

However, if they Jays renegotiate a deal at the same level for the next few years then Beaston should be fired to have little or no growth in revenue when the ratings for the team have nearly doubled is ridiculous. I already think he should be fired over his comments at the state of the franchise address regarding contract length, not that I really disagree with him, but you can't handicap your GM's negotiating position like that. Hopefully the next CEO of the Jays is hired by the Jays and not by Rogers.


The writer is not saying anything I haven't said without access to the numbers. Television rights revenues are soaring. That, in turn, is going to keep driving up payroll costs for adding or keeping talent. It's like that in every sport. What rationale is there for the league wide average salary in the NBA to be $5 million/year? None, except it reflects the players' revenue split in an era of rising network and local TV revenues.

By any objective analysis, with what the networks all see as the revenue potential of making sports content available on multiple platforms, the Jays' rights going forward should be worth two to three times what the team is getting, considering the national audience for the Jays. It's as if the Dodgers were the only baseball team on all TV sets in all of California, not just sharing the southern California market with the Angels and Padres.

Even more egregious us the fact Rogers has more access than any of its competitors to the distribution channels. Unlike New York, where there was a ridiculous battle between MSG and Time Warner the past several weeks over how much Time Warner would pay to get Knicks/Ranger/Devils games (a dispute so silly that TW cut off those games and New Yorkers had to go to friends, relatives or sports bars with other cable or sat providers to see Jeremy Lin play), Rogers has more than half the distribution locked up with its own cable and wireless. Rogers Corporate can screw Rogers Cable on what it pays to show the Sportsnet channels, then claim Rogers Cable doesn't make any money and therefore they have to keep jacking up rates.

Dowbiggen doesn't even capture the distribution side of Rogers vertical integration.

It's a screwjob on Jays fans. I accept that maybe it's an old deal that might get better, but if I were betting on it, the screwjob is going to continue, and become more egregious because Rogers has this amazing cash cow that probably covers up for multiple failures and inefficiencies elsewhere in the empire - and they aren't going to surrender any of it. It mutes criticism of senior management -except from hardcore ball fans whom they ignore - because the stock market analysts will overlook a serious deficiency in the operation if the overall picture is excellent. It's just like Apple with AppleTV. Who the hell cares AppleTV never had much success when Apple is selling a billion iPods, iPads and iPhones? Same thing with Rogers.
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Re: Globe article on Jays TV deal 

Post#8 » by augustine » Sat Feb 18, 2012 7:08 pm

torontoaces04 wrote:Thanks for posting. This is the root of the problem.


This is the root of the problem. Everyone needs to know this. The Jays draw the biggest TV audience per game of every team, the Jays have the biggest market of any team (a whole country!), and Rogers pretends they can't afford anything.

It is like how they pretend that their services are worth so much, but then you have to call in to cancel before they give you any deals.
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Re: Globe article on Jays TV deal 

Post#9 » by baulderdash77 » Sat Feb 18, 2012 7:09 pm

I analysed it last year and it's analysed on the main Jays message board. The fair value always seems to come in around $75 million per year. If they're only getting $36, then it's a pretty significant difference.
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Re: Globe article on Jays TV deal 

Post#10 » by Sifu » Sat Feb 18, 2012 8:03 pm

I might be wrong (or should I say I am likely wrong), but I thought I read somewhere that a team's television revenue is partially pooled with MLB and part of the formula to determine revenue sharing.

Assuming that to be the case, it would explain why the Jays were getting "shafted" on the tv deals. It would provide incentive to Rogers to pay as low as possible while being somewhat believable to MLB.

After all, whether the Jays get $20MM or they get $200MM per year in tv rights, it's all the same to Rogers at the end of the day...
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Re: Globe article on Jays TV deal 

Post#11 » by Parataxis » Sat Feb 18, 2012 8:05 pm

WpgPage wrote:However, if they Jays renegotiate a deal at the same level for the next few years then Beaston should be fired to have little or no growth in revenue when the ratings for the team have nearly doubled is ridiculous.
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That would make sense if the Jays were owned by somebody who isn't Rogers.

But Rogers can take a holistic view of things. It's fine if the Jays are selling their TV rights (to Rogers) for 15 cents on the dollar of what their worth, because Rogers isn't losing anything - they're making up that difference (and possibly then some) by Sportsnet paying less for the rights.
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Re: Globe article on Jays TV deal 

Post#12 » by dagger » Sat Feb 18, 2012 8:41 pm

Beeston is becoming a huge irritation. He talks about Stadium revenues driving payroll, but there are few sports teams that expect Stadium or Arena revenues to be a major sports team's primary revenue stream going forward. Huge local TV deals were a major cause of the NBA lockout because small markets understand that it will be harder to retain season ticket holders in future when the money they have been spending on tickets can buy the best home HDTV package with a 60-inch screen and give them a better view, with commentary, than the live view. And that's just the gain for one season. Not spending the same money on tickets each year means saving the equivalent of a deluxe cruise for two or lease payments on a pretty nice car.

TV will drive revenues, and it will drive payroll. The small markets knew if they didn't get revenue sharing, lower player costs, spending disincentives like a higher luxury tax, etc, out of the new NBA CBA, the money being generated in the largest markets from these monster TV deals would continue to raise the players' share of BRI and push up payroll costs for everybody.

Baseball is going to be the same. Toronto wants to imitate Tampa Bay's reliance on homegrown talent, but we surely don't want to imitate Tampa Bay's tendency to sell off talent to keep payroll low. Yet we're heading there without a significant rise in payroll because when all these young kids we're developing starting rolling through their controllable years and we want to extend them, even buy out the first couple of years of free agency, for the same kind of money that we got Ricky Romero to extend. All talent is going to cost more, whether you get it through free agency, trades or internal development.

Worse still, under the new CBA, the Jays are going to lose their revenue sharing and the same agreement restricts spending on the draft and international amateur free agents, two areas where Toronto has been (laudably) a big spender. I wonder if Rogers actually voted for this CBA because it's so antithetical to Anthopolous' strategy you would expect Beeston to have cast a no vote. Unless, of course, it all suits Rogers' purpose to close off a spending stream...
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Re: Globe article on Jays TV deal 

Post#13 » by WpgPage » Sun Feb 19, 2012 1:04 am

baulderdash77 wrote:I analysed it last year and it's analysed on the main Jays message board. The fair value always seems to come in around $75 million per year. If they're only getting $36, then it's a pretty significant difference.


The problem with this is that you would need someone to pay that in the real world is TSN paying 75 mil to broadcast the Jays? Is the Score going to pony up 75 million? While the 36 may be low there is simply no other network out there that will pay more, if the Jays were offered more and didn't take it they would be in violation of both the CBA and Canadian law. So while that 36 is most likely on the low end some of these proposals are just impossible due to the nature of the Canadian media market.
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Re: Globe article on Jays TV deal 

Post#14 » by WpgPage » Sun Feb 19, 2012 1:08 am

dagger wrote:Worse still, under the new CBA, the Jays are going to lose their revenue sharing and the same agreement restricts spending on the draft and international amateur free agents, two areas where Toronto has been (laudably) a big spender. I wonder if Rogers actually voted for this CBA because it's so antithetical to Anthopolous' strategy you would expect Beeston to have cast a no vote. Unless, of course, it all suits Rogers' purpose to close off a spending stream...


If they wanted to close of the spending stream why allow AA to expand the staff in the first place, or for that matter why hire him at all I'm sure they had an interview and he told the higher ups what he wanted to do with the team...
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Re: Globe article on Jays TV deal 

Post#15 » by dagger » Sun Feb 19, 2012 6:01 am

WpgPage wrote:
dagger wrote:Worse still, under the new CBA, the Jays are going to lose their revenue sharing and the same agreement restricts spending on the draft and international amateur free agents, two areas where Toronto has been (laudably) a big spender. I wonder if Rogers actually voted for this CBA because it's so antithetical to Anthopolous' strategy you would expect Beeston to have cast a no vote. Unless, of course, it all suits Rogers' purpose to close off a spending stream...


If they wanted to close of the spending stream why allow AA to expand the staff in the first place, or for that matter why hire him at all I'm sure they had an interview and he told the higher ups what he wanted to do with the team...


The CBA was negotiated last fall, so whatever AA did before was anticipating a continuation of strategies facilitated by the previous CBA.
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Re: Globe article on Jays TV deal 

Post#16 » by dagger » Sun Feb 19, 2012 6:02 am

WpgPage wrote:
baulderdash77 wrote:I analysed it last year and it's analysed on the main Jays message board. The fair value always seems to come in around $75 million per year. If they're only getting $36, then it's a pretty significant difference.


The problem with this is that you would need someone to pay that in the real world is TSN paying 75 mil to broadcast the Jays? Is the Score going to pony up 75 million? While the 36 may be low there is simply no other network out there that will pay more, if the Jays were offered more and didn't take it they would be in violation of both the CBA and Canadian law. So while that 36 is most likely on the low end some of these proposals are just impossible due to the nature of the Canadian media market.


I don't believe MLB can force a team to put the games up for bid, just assess whether the amount being declared by the Jays meets minimum far market value criteria.

By the way, there is such a thing as TSN which until last season did broadcast lots of Jays games.
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Re: Globe article on Jays TV deal 

Post#17 » by augustine » Sun Feb 19, 2012 2:00 pm

The Score has posted a response to the original Globe article:

http://blogs.thescore.com/mlb/2012/02/1 ... Blanked%29
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Re: Globe article on Jays TV deal 

Post#18 » by satyr9 » Sun Feb 19, 2012 2:47 pm

augustine wrote:The Score has posted a response to the original Globe article:

http://blogs.thescore.com/mlb/2012/02/1 ... Blanked%29


If you haven't read Parkes before, skip that one 'cause it's bad and he's actually pretty decent most of the time. He's not wrong about the original article, but his piece is equally terribad and then glosses over the part that will have people's panties bunched anyway; (36 vs 150? Look at payroll in 85-93. Nothing has changed since then, right?) He just does the greatest hits of the offseason defense in about 1000 words more than necessary. And if you know anything about me, you'd know what a big fan I am of an extra 1000 words used for no good reasons. :D
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Re: Globe article on Jays TV deal 

Post#19 » by baulderdash77 » Sun Feb 19, 2012 2:58 pm

It's a pretty poor response on The Score. It focuses on attendance, not TV ratings. I thought it was ratings & not attendance that payed TV networks. I guess I must be wrong.....

The Jays get far greater TV ratings than teams that are getting these huge TV deals. With the size of the broadcast rights, the ratings can actually grow.

He talks about how nobody would pay more than what the Leafs are worth, but I guess he forgot that MLB plays a 162 game season not an 82 game season so of course the TV deals with similar ratings should be worth more.
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Re: Globe article on Jays TV deal 

Post#20 » by LittleOzzy » Mon Feb 20, 2012 4:12 am

sonn wrote:
Mattd97 wrote:woah woah woah im pretty sure posters here claim that our tv contract is perfectly respectable and fair.

but seriously imagine if we were owned by "non-multimedia owner X" and rogers and tsn had to get in a bidding war over jays games.

I doubt any major bidding wars would happen for any Toronto sports teams not named Maple Leafs.


Sports is becoming a very hot product for TV networks and the Jays have a market of 34 million people. I think in a bidding war between the two networks they could easily fetch as much as the Leafs.

Sports is the last product available to TV networks that real sports fans need to see live. Movies, TV shows and what not can all be viewed online at anytime, or on Netflix so the prices for those shows are dropping every year. Sports on the other hand is the last remaining product that TV has to stay relevant.

In the next 10 years sports is going to be HUGE, you can already see it in the states with more and more sports networks popping up.

If the Jays were not owned by Rogers they could easily fetch more money.

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