How come the Twins have such a poor TV Deal?

[drock2190]

I was looking at this article and they point out the Twins have a subpar TV deal. Anyone got details on when it was signed and why practically every one else scored a better deal? No wonder Ryan isnt adding payroll this offseason.

 

Also, am I reading this article right when it says the Rays have more fans then the Twins? I thought they were on pace with the Jackonsville Jaguars of having the poorest fan base. So what does that say about the Twins??!

 

Link

http://www.raysindex.com/2014/10/rays-next-tv-deal-could-be-worth-80-100-million-per-year.html

[Jarends703]

From what I have read, the Twins negotiated and signed their deal in 2011 with the 29 mil starting in 2012. This was prior to the mega deals signed by the California teams. It's comparable to other mid market teams. This number may also increase year after year, if only slightly but this is just a guess.

 

I would guess that California markets are more appealing to advertisers so the deals grow exponentially larger. Maybe this is true in Florida as well.

[glunn]

I am hoping that one of our experts can educate us on this.

[Kwak]

Raw numbers don't tell the whole story.  WRT advertising, the most prized group is 18-49 females. People over 50 aren't all that relevant.  It is clear that the Twins wereot-negotiated.  There might not be as many (much) competition in the MN market.

[Willihammer]

This would have been a great question for DSP

[JB_Iowa]

It's all Brock's fault!!!!! (J/K).

 

Part of it is demographics (us old f**ts) but a lot of it is lower cable subscriber numbers than other areas. 

[Steven Buhr]

You folks in Minnesota don't subscribe to cable/satellite services to the degree the fans in other locations do. Mackey did a story on this a couple of years ago.

 

Minneapolis is middle of the pack in terms of population and TV market among MLB teams, but the percentage of TV owners who subscribe to cable/satellite at the time was next to last (above only Milwaukee) in MLB. Since television deals these days is all about regional sports networks and those are only available via cable/satellite, the Twins can't command the kind of money other teams can.

 

To my knowledge, the Twins haven't been forthcoming on their deal, but media speculation is that they signed a 10 year deal that started in 2012. It's pretty hard to imagine the cable/satellite industry being stronger 7 years from now, so the Twins really need to hope there's a new media revenue model in place with MLB at some point, or this situation will never improve and their overall revenues will remain in the bottom tier of teams.

 

Of course, winning a few games would help that situation a bit.

 

 

[stringer bell]

I'm kind of old (outside of the 18-49 demo), so the memory isn't so good, but didn't the Twins "lose" a negotiation and then end up re-signing with Fox Sports? 

 

IIRC, the Twins set up their own broadcast company (Victory Sports?) and put it on the premium channels for cable.  Few people went for that idea and Fox Sports swooped in midseason and bought the rights for a bargain price and put the Twins on basic cable. 

 

Also, IIRC, as recently as 2010 the Twins had some of the very best ratings for their broadcasts on cable.  Having a winning team helps, obviously.

[Hosken Bombo Disco]

Great topic. Small point to drock2190: I didn't read into the article that the Tampa-St Pete market has more fans, only that there are estimated more televisions turned on to Rays games last year than Twins games. In fact, I'd bet that "Twins Territory" covers more area and runs much more loyal than that other market, which is relatively new to the pro sports scene. 

[Rosterman]

And then we have the radio model, where the Twins want each station to pay them to broadcast games while they also keep the bulk of the ad revenue. And then they end up with theor own low wattage station that can't even cover parts of the greater metro area.

 

I also seem to remember that the Twins have an ad revenue partnership with Fox, which ties into their corporate sponsor packages and such, where they get to keep monies from their major sponsors that advertise in all the Twins major outlets -- stadium, radio, television.....like making sure sigange is visible during broadcasts and such.

[Kwak]

Isn't said radio station owned by the Pohlad's?

[Lakeside]

I'm kind of old (outside of the 18-49 demo), so the memory isn't so good, but didn't the Twins "lose" a negotiation and then end up re-signing with Fox Sports? 

 

IIRC, the Twins set up their own broadcast company (Victory Sports?) and put it on the premium channels for cable.  Few people went for that idea and Fox Sports swooped in midseason and bought the rights for a bargain price and put the Twins on basic cable. 

 

Also, IIRC, as recently as 2010 the Twins had some of the very best ratings for their broadcasts on cable.  Having a winning team helps, obviously.

This is somewhat correct, however, Victory Sports was started by Twins Sports Inc, as a subsidiary in about 2004 ???.  It was meant to replace Fox Sport Network in this area with the Twins rights the bulding block of the network (162 dates) and then Wild, T-Wolves, U of M etc. could be added.

 

The issue was that Victory wanted to be on Basic Cable and be paid by every subscriber, whether they watched the Twins or not.  The cable companies wanted it on "Extended Basic" in which only people who paid extra could watch it.

 

This was the same tact followed by the YES Network (Yankees) and they succeeded and now it is estimated that the YES Network is more valuable that the Yankees.  To do this, however, George Steinbrenner had to keep Yankee games off cable for almost a year and turn the cable companies into the villians for not putting it on Basic Cable and letting fans see the game.  Stienbrenner had the stomach to see this thru and it has paid off handsomely. .

 

On the Twins side, the Twins were off cable only about one month before the Twins capitulated to the fans and a small increase in rights fees from Fox.

 

IMO, this business deal, and I was told by Twins executives that Victory meant over $50m in profits, as compared to a Fox rights fee at the time of $12M, was one of the reasons tthat the Twins could not attract the free agents they needed to compete, in a long term sense, in the years before the new stadium was built.

 

That being said, it is going to be interesting to see how "local rights fees" play out in each individual market in the day of Netflix and the like being a subscriber based network for Ipads, phones, etc.  i.e. cutting the cord from cable in the valuable demographics (24-54).    

 

One thing is certain in this realm. . . "Content is King". . i.e. whoever owns the content that people want to watch will be purchased.  If people don't want to watch local baseball then nobody will pay for it.  The next 5-7 years will be very interesting in this realm of professional and college rights fees.

[drock2190]

Made this thread last night but forgot about it till now. 

 

Thanks for all the replies, good info!

[glunn]

This has been educational, but somewhat depressing.  Hopefully, someone in the front office is devising a plan to produce more revenues in order to better compete against other teams.  

 

If you were TR, what strategies/technologies would you pursue in order to increase these revenue streams?

[Linus]

I doubt this falls within TR area of responsibility.

[Major League Ready]

It seems like they were on the right track building a consortium with the Wolves, Wild, etc.  It is hard to say without all of the facts and figures but perhaps they should revisit this approach.  Hopefully, they learned from their previous attempt and could also learn form successful implementations like the Yankees put together.  

 

I would probably start to renegotiate a new deal relatively soon that would extend the contract with Fox sports.  That way you get a glimpse of what that future contract holds while you have plenty of time to develop an alternative plan and compare revenue streams.  Starting soon would also help the others who would participate in the consortium make plans and manage contracts accordingly.  

[nicksaviking]

I'd also think more TV's are turned on in TB or Houston during baseball season simply because the summer months can be pretty unbearable outdoors where as Minnesotans are very active in the warm months.

[jharaldson]

I think the Twins totally failed in the manner they launched Victory sports.  Here are a couple of things the Twins did while launching:

 

- FSN was charging $1.70 per subscriber for the Twins, Wild, Wolves, and Gopher Hockey.  Victory was asking for $2.20 for the Twins and some Gophers stuff.  

 

- The Twins were not going to increase the amount of games shown and only had 100 games on the board for Victory, despite the fact they did not have another big partner to fill time.

 

The Twins should have launched Victory at a discount ($1.00-1.25) and increased the number of games televised to 130 or 140 to get on the lineup.  After being on for a few year they could have gone for the big money.

[Lakeside]

I think the Twins totally failed in the manner they launched Victory sports.  Here are a couple of things the Twins did while launching:

 

- FSN was charging $1.70 per subscriber for the Twins, Wild, Wolves, and Gopher Hockey.  Victory was asking for $2.20 for the Twins and some Gophers stuff.  

 

- The Twins were not going to increase the amount of games shown and only had 100 games on the board for Victory, despite the fact they did not have another big partner to fill time.

 

The Twins should have launched Victory at a discount ($1.00-1.25) and increased the number of games televised to 130 or 140 to get on the lineup.  After being on for a few year they could have gone for the big money.

Don't disagree with you at all.. . . from my position I had a very front row seat with the launch of Victory Sports.

 

That being said, things maybe could have been better.  There is no doubt, that at that time Major League Baseball "drove" Regional Sports Networks. . . They have 162 dates with basketball and hockey combines only have about 160 plus playoffs.  Had Victory got traction, we may not have FSN in this market at this time.

 

In hindsight, a low ball price and inclusion of more games maybe would have done the trick and helped Victory get on more cable systems.  The Twins took the tact that fans calling cable companies would do the trick and when it didn't, they bailed on the effort and took the "safe" deal with Fox.

 

It will be interesting to see how this plays out as the television/Ipad/phone media has changed much and will continue to change in the future.  Cable companies face an onslought of competition now from cord cutting companies.  Could it be that the failure of Victory turns out to be a positive for the Pohlads as they are not in that business today?

 

In any regard, an interesting subject in the history of the Twins franchise.

[Mike Sixel]

SD Buhr has the best point, imo. Even if they don't screw up negotiations....there is a relatively small cable/satellite market in the Twins Cities. That is a huge issue for the team, even if they figure out how to actually negotiate.