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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?

9 Comments


Recommended Comments

Karbo

Posted

Looks like the best choice to buy out Bally, if that is the price tag. Then the question becomes do the ownership group want to pony up that much. On paper it looks like a good deal, but there's a lot more to know.

LA Vikes Fan

Posted

Very interesting, I would love to get access to the financials to see what the investment would be to buy BSN. There's a real reward but real risk and it's my sense that ownership is somewhat risk averse so I don't think they would bite. 

I think this is a transition year for the Twins and a few other MLB teams. I think they partner with MLB to get access to facilities, tech, and content and get their ad money for now. I see this coming to a head where local/regional TV becomes an MLB owned and operated operation for all but the most high end teams like the Yankees, Mets, and Dodgers. Other similar option would be to aggregate and sell the rights to a Prime Video, Hulu or Netflix type streamer. In other words, aggregate the local TV for most teams like Bally did but run it better with more realistic payouts to teams and less debt on the operation. Gives you the greatest efficiency, some good cross-marketing opportunities, and would give MLB the chance to raise baseball's profile from a regional to a more national audience. Big upfront investment but biggest rewards.  

Althebum82

Posted

No mention of the possibility of a local broadcast partner? 

Hubbard's production subsidiary F&F Productions handles major sports and entertainment events such as the Super Bowl and NCAA Basketball Final Four for the national broadcast and cable networks.  One would think they could arise to the challenge of handling roughly six Twins games per week to be aired on KSTC or one of KSTP's secondary digital channels.  Hubbard also has sister stations in Duluth and Rochester with secondary channels where the games could be carried as well.  Coverage would be trickier, of course, for western MN and neighboring IA and ND/SD viewership where they would need to get creative, but the advantage here is that games would be readily available both over the air and on cable/satellite/YouTube TV for an overwhelming portion of the audience reached by BSN.

I am not familiar with the rules on streaming rights for MLB products, but KSTC could handle this as well if it is an option for teams like the Twins to consider online.

Doctor Gast

Posted

1st we have to look at the older fan which makes up a good portion of the total of fans, that would get lost streaming , So cable would make more sense, going back to Midwest Sport Channel or Fox. But cable is more expensive & we have to make Twins games more accessible. The older fans are less active so cable works but more active younger fans needs apps on their phones & something cheaper than cable. If I could buy cable the main reason is to watch the Twins but in Brazil, Twins games are absolutely not an option on cable.

 

DJL44

Posted

1 hour ago, Doctor Gast said:

1st we have to look at the older fan which makes up a good portion of the total of fans, that would get lost streaming , So cable would make more sense, going back to Midwest Sport Channel or Fox. But cable is more expensive & we have to make Twins games more accessible. The older fans are less active so cable works but more active younger fans needs apps on their phones & something cheaper than cable. If I could buy cable the main reason is to watch the Twins but in Brazil, Twins games are absolutely not an option on cable.

It shouldn't be either/or. Twins games should be available through cable AND streaming.

Doctor Gast

Posted

45 minutes ago, DJL44 said:

It shouldn't be either/or. Twins games should be available through cable AND streaming.

That was my point, sorry that I didn't summarized. 

Vanimal46

Posted

All that has been teased so far by the organization is that Twins games will be widely available to the public with no blackouts. Which makes me think @Althebum82is onto something with the local broadcast partner. Hopefully people in Minnesota and the surrounding area has the ability to pick up the game on over-the-air stations. 

At this point, wouldn't we be hearing rumblings of the Pohlad's buying out BSN, or creating their own channel like Victory Sports One back in the day?

 

beckmt

Posted

i have gotten the feeling that mlb is going to take control of a lot of the tv rights  so we shall see

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