The latest scam: Regional Sports into basic cable tiers

[c1ue]

Baseball has been abuzz over the purported size of the Los Angeles Dodgers TV deal. Rumors have it at the $6 billion to $7 billion range over 20 years - amounting to $300 million or more per year to the team. To put this in perspective, the highest payrolls in baseball are a bit above half that, and most are 1/3 or less.

What is interesting is that the economics of the setup make no sense whatsoever.

Let's say the Dodgers get 100,000 viewers per game. At $2 million per game or so, this works out to a CPM of $20,000. To put this in perspective, the Super Bowl has a CPM which peaked at $31.

However, this article sheds light onto what is going on: it has nothing to do with economics but everything to do with a consumer scam:

http://www.videonuze.com/article/wil...ers-mega-deal-

Essentially the TV deal is a vehicle by which the various cable companies expect to be able to fleece cable subscribers. The Dodgers, as it turns out, averaged 67000 viewers a game - and the largest baseball team audience (Yankees) is a bit over 300,000 viewers a game. However, if the Dodgers can get their games into the basic cable TV subscriber package, the cost of the contract can then be charged to each and every subscriber.

Approximately 99% of the LA cable subscriber market does not watch Dodgers games.

How's that for a scam, paying for what you don't watch?

That's what our economy appears to be about these days.

[kduffey]

Re: The latest scam: Regional Sports into basic cable tiers

What you just articulated is basically what drives the economics of all sports now. In college football, conference expansion is completely driven by this. The most recent move a couple weeks ago - the conference commissioner of the Big Ten actually admitted in a more straight forward fashion that it was all about getting cable subscribers for the Big Ten Network in the same way you just described.

I run a sports website and wrote an article on it here: http://www.saturdaydownsouth.com/201...f-the-big-ten/

Here's an excerpt:

What’s fascinating here is that the entire strategy is dependent upon an archaic model of delivering cable television to end-users – and dependent upon that model not changing. As Wetzel explains:

Delany got his demographics, two states with a combined 14.6 million residents. The hope is Fox, which owns 51 percent of the Big Ten Network, can package enough channels, including Fox News and YES (which it is planning on buying a majority stake in and is home to the New York Yankees) to force the BTN on enough basic cable systems to make tens of millions.
Whether anyone watches is irrelevant. Conferences used to chase eyeballs. They still do only now it doesn’t matter if the eyeballs are even open. The genius of the Big Ten Network (or any cable channel like it) is it is essentially a Big Ten tax.

Because end-users are forced to buy cable television via large bundles of channels, they pay for channels they often don’t want. The Big Ten is essentially exploiting this system to increase revenues. Even if the quality of football in the conference goes down (which it does with Maryland and Rutgers).

[rogermexico]

Re: The latest scam: Regional Sports into basic cable tiers

Baseball has been abuzz over the purported size of the Los Angeles Dodgers TV deal. Rumors have it at the $6 billion to $7 billion range over 20 years - amounting to $300 million or more per year to the team. To put this in perspective, the highest payrolls in baseball are a bit above half that, and most are 1/3 or less.

What is interesting is that the economics of the setup make no sense whatsoever.

Let's say the Dodgers get 100,000 viewers per game. At $2 million per game or so, this works out to a CPM of $20,000. To put this in perspective, the Super Bowl has a CPM which peaked at $31.

However, this article sheds light onto what is going on: it has nothing to do with economics but everything to do with a consumer scam:

http://www.videonuze.com/article/wil...ers-mega-deal-

Essentially the TV deal is a vehicle by which the various cable companies expect to be able to fleece cable subscribers. The Dodgers, as it turns out, averaged 67000 viewers a game - and the largest baseball team audience (Yankees) is a bit over 300,000 viewers a game. However, if the Dodgers can get their games into the basic cable TV subscriber package, the cost of the contract can then be charged to each and every subscriber.

Approximately 99% of the LA cable subscriber market does not watch Dodgers games.

How's that for a scam, paying for what you don't watch?

That's what our economy appears to be about these days.

FIght the power.

We ditched all TV services and only have $9 a month netflix for movies.

We're not really big sports fans, but we listen to packers games on the radio, which has far better announcing and is actually somewhat less disturbing when they lose : )

[dcarrigg]

Re: The latest scam: Regional Sports into basic cable tiers

FIght the power.

We ditched all TV services and only have $9 a month netflix for movies.

We're not really big sports fans, but we listen to packers games on the radio, which has far better announcing and is actually somewhat less disturbing when they lose : )

Hear, hear. The last ten years without television have been great. That's $100/mo that nobody has to waste. You won't miss it. And if you're at all like me, you'll find yourself going out and being social for the big games that really count.

[flintlock]

Re: The latest scam: Regional Sports into basic cable tiers

The Golden rule applies. "Them that has the Gold, makes the rules". The gold in this case being the best athletes in the world playing a game that happens to be a very popular national pastime. I pay around $1000 year for various TV services and watch maybe 30 or so football games along with other programming. The Football alone is what keeps me subscribed, so their little scheme works. But I don't consider myself particularly "ripped off". Not when game tickets are $100+ each. Considering how lame some "entertainment" is today, I consider it money well spent.

[flintlock]

Re: The latest scam: Regional Sports into basic cable tiers

Hear, hear. The last ten years without television have been great. That's $100/mo that nobody has to waste. You won't miss it. And if you're at all like me, you'll find yourself going out and being social for the big games that really count.

As a UGA grad I would agree except they want upwards of $400 each for the "cheap seats" to the SEC Championship! Go Dawgs!

[don]

Re: The latest scam: Regional Sports into basic cable tiers

We were SF Giants season ticket holders for about 15 years. This year I watched nearly all the games from my couch on the MLB cable package. That cost me about as much as attending one game back in the daze. We were very happy the coverage was available, with the team winning the Series, etc. I do not, however, think spreading the tariff over all subscribers should be the practice. Buying the MLB was my option, as it should be for the rest of the season offerings.

[kduffey]

Re: The latest scam: Regional Sports into basic cable tiers

Yeah live sports is what keeps me plugged into cable. Football especially. If I had an alternative for that, i'd unplug.

[rogermexico]

Re: The latest scam: Regional Sports into basic cable tiers

Hear, hear. The last ten years without television have been great. That's $100/mo that nobody has to waste. You won't miss it. And if you're at all like me, you'll find yourself going out and being social for the big games that really count.

I thought I would find wisconsin winters hard without TV but I have no problem at all going on 18 months now and into my second winter. Its' simply amazing what happens to your productivity and state of mind with no TV.

The funniest thing is the celebrity headlines on MSN and yahoo and such.. I have no idea who most of them are any more!

[Milton Kuo]

Re: The latest scam: Regional Sports into basic cable tiers

Yeah live sports is what keeps me plugged into cable. Football especially. If I had an alternative for that, i'd unplug.

*ahem* I've heard rumors that there are web sites out there that stream a lot of sports programming such as baseball, basketball, and American football (pro and college.)

[lektrode]

Re: The latest scam: Regional Sports into basic cable tiers

Hear, hear. The last ten years without television have been great. That's $100/mo that nobody has to waste. You won't miss it. And if you're at all like me, you'll find yourself going out and being social for the big games that really count.

+2
dumped the TW digital pkg/dvr setup a year ago - cut back to the basic/min pkg, bought a streaming media box for 60bux, upped the roadrunner bandwidth to the 15mb level (after netflix was choking too frequently on 10mb), tried hulu deluxe for a while, dumped that and kept the slacker music (even tho it drops far too frequently to suit me, but maybe thats a hardware/firmware issue w the sony streamer box?)

net results: save 600bux/year and dont miss the rest of it for even one second

tho not much of a sports fan - unless/until the sox or pats are winnin, of course ;) but i do like to goto live games when the oppty presents itself - we just dont get much out here in the way real/pro sports - cept for maybe The Wahines
and, certainly The Big Event which is even better live, there on the beach (for the scenery... ;)

[DSpencer]

Re: The latest scam: Regional Sports into basic cable tiers

I've considered going the netflix only route but sports keep me buying cable. Sure I could go out and watch the games at the bar...but then I'd spend even more on food and beer!

Off topic...

As a UGA grad I would agree except they want upwards of $400 each for the "cheap seats" to the SEC Championship! Go Dawgs!

I visited the Athens for the first time a few weeks ago. Came across this scene while wandering the UGA campus:

UGA Law Hawk.jpg

A red tailed hawk eating a squirrel. Apparently, it lives near the law school building and has its own facebook page as the UGA "Law Hawk". Very unique although somewhat gruesome as well. The football stadium is pretty interesting as well in the way it's built into a hill. Also witnessed a guy with a bulldog wearing a Georgia football jersey in a bar. I guess they take it pretty seriously...

[Thailandnotes]

Re: The latest scam: Regional Sports into basic cable tiers

Based on early reports, this is a highly leveraged deal and Guggenheim Partners are counting on securing a massive new cable television contract to pay back their costs. According to the LA Times, this will mean higher cable bills for all Angelenos whether you are a baseball fan or not. In other words, the cost of buying of the Dodgers will passed on to the already strapped city of Los Angeles. The real buyers, therefore, are not Magic and the Guggenheims but the people of Los Angeles, most of whom will never set foot inside the stadium.

It didn't have to be this way. Over the last two years, there was a movement of fans trying to buy the team, making it publicly owned in the model of the NFL's Green Bay Packers. Representative Janice Hahn was even elected to Congress on the promise that she would challenge the Byzantine anti-trust laws that prevent such a purchase. But instead of a situation where fans buy the Dodgers and profits are funneled back into the community—like Green Bay—we get Guggenheim Partners, a leveraged buy, and the public shouldering the cost. No matter how good Magic Johnson makes us feel, remember that his great talent was for misdirection. What we are witnessing in Los Angeles is not magic. It's a grift.

March 2012

http://www.thenation.com/blog/167100...y-buy-dodgers#

[Thailandnotes]

Re: The latest scam: Regional Sports into basic cable tiers

"What’s amazing about the college conference expansion fad is that the conferences are not even doing the normal dumb thing that every business does, which is to try to copy success. They are trying to copy failure. Everybody is racing to turn their successful product into the next New Coke."

The Madness of Big Ten Expansion

http://nymag.com/daily/sports/2012/1...expansion.html

[flintlock]

Re: The latest scam: Regional Sports into basic cable tiers

I've considered going the netflix only route but sports keep me buying cable. Sure I could go out and watch the games at the bar...but then I'd spend even more on food and beer!

Off topic...



I visited the Athens for the first time a few weeks ago. Came across this scene while wandering the UGA campus:

[ATTACH=CONFIG]4489[/ATTACH]

A red tailed hawk eating a squirrel. Apparently, it lives near the law school building and has its own facebook page as the UGA "Law Hawk". Very unique although somewhat gruesome as well. The football stadium is pretty interesting as well in the way it's built into a hill. Also witnessed a guy with a bulldog wearing a Georgia football jersey in a bar. I guess they take it pretty seriously...

That's pretty interesting about the hawk.

Yes, some do take it very seriously. My roomate was a veternarian and his family always had a bulldog, despite their tendency to have a lot of health problems. My wife is a bigger fan than I am. Our car has goofy flags all over it as I write this. Alabama fans are probably even more extreme though.