Future of Twins TV
Twins Video
As we end 2023, the Twins find themselves at a crossroads regarding local TV revenue. They have no current plan to replace the $55 million that BSN paid them last year. This is leading to an expected drop in payroll as revealed by management at an end of year press gathering. Where we go from here is an open question. Will the Twins play it safe, let the MLB handle for them, or do something truly innovative and adventurous? To figure this out we need to look at the options and the money behind each.
1. Play it Safe – The option that has been coming up in recent conversations is the Twins cutting a 1 year deal with BSN to play out the string and see what happens next year. The Twins received roughly $55 million last year from BSN but I would anticipate with Diamond Sports going through a bankruptcy and the Twins wanting a 1 year deal that all the leverage with this would be with BSN. I would guess a reduction to $40-45 million with the Twins sweating it out every month to see if BSN actually pays or not. In addition, the Twins weren’t willing to give BSN streaming rights last year so I would doubt they would give them out this year so continued blackouts are possible for folks not on specific cable systems.
Upfront Cost - $0
Likely income 2024 - $40-45 million.
Income beyond - $0.
2. MLB – MLB broadcast the Padres last year after Diamond Sports backed out midseason and paid 80% of the rights fee which mitigated a total financial disaster but as we go into 2024 MLB will not be in the mood to cover costs for known issues like the Twins and Padres having open rights deals. In this situation I can see the MLB partnering with the Twins to ensure they have a cable channel, they have adequate production support, and that they have access to MLB.tv tech. With this move the Twins can make money off of in game advertising which was $40K a game in 2004 but the Twins thought they could increase that and with inflation would be closer $80-100K a game for a potential total of $16 Million. Ad to that a guess of 50,000 people/bars/businesses able to pay $200 a year for a stream of the Twins and that is another $10 million.
Upfront Cost - $0
Likely income 2024 - $26 million
Income beyond - $30 million+
3. Buy BSN– The Twins are in a unique position where they have the option of buying a channel with a well known location to fans, that has content deals with other local teams, and has broadcast facilities for their various pre and post game shows. BSN will limp along into 2024 but once Twins games start there were provisions in 2004 to cut the subscriber rate by 33% and I would anticipate since the Victory Sports debacle that the cut rate has only gone up. The NBA has made a deal in bankruptcy proceedings with Bally that all deals are up after this year so once June of 2024 they basically are Wild Sports North. I would anticipate that 1.3 million homes they have access to with the $3.07 a month they get from each home would be cut in half on MLB Opening Day and by 75% on NBA Opening day before the channel is worthless. The Twins are at a point where they can make a capital purchase of this asset for something like the $15-20 million range. Twins then have access to the $50 million in subscriber fees and can work to increase that without the baggage that Diamond Sports brought. They have the Ad revenue above of $16 million a year I detailed above. They can still offer some streaming but since it is staying on cable we are looking at only half of the estimate above ($5 million).
Upfront Cost - $20 million
Likely Income 2024 - $71 Million
Income beyond - $75 million+
I would prefer to have an established storefront that people know and trust, especially when so many of my customers are elderly. This plan would keep the channel id and allow for some semblance of a planned transition on-air. Capital costs can be depreciated over time and with the immediate return looking like over $70 million I would personally take the risk, buy the station, and become the “Midwest Sports Channel” again. Will the Twins take a $20M gamble this offseason or will they fade back and let the MLB and other more aggressive teams take the lead?
- LA Vikes Fan, Karbo and Doctor Gast
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