ALinChainz
01-07-2006, 01:19 PM
Connie Mabin / AP Business Writer
CLEVELAND -- Some say working in television is a competitive sport, but that doesn't necessarily mean professional sports teams will find success in broadcasting.
The Cleveland Indians have become the latest in a line of about 30 professional teams to take a crack at running a regional network, announcing a deal last week with cable company Time Warner Inc. The New York Mets and Jets plans to launch SportsNet New York this year.
The Indians' goal is to earn more revenue and control programming much like the New York Yankees' YES Network and the Boston Red Sox's New England Sports Network, which have done well.
But those markets are much larger and richer than Cleveland, one of the nation's poorest cities, and have teams whose appeal goes beyond city limits -- keys, experts say, to sports teams hitting home runs in the TV business.
While teams in New York, Boston, Chicago and California have recorded victories, others have failed for various reasons: the NBA's Portland Trail Blazers, Charlotte Bobcats and Houston Rockets are a few. Planned networks for the Kansas City Royals, Houston Astros and Minnesota Twins never came to be.
"Teams are realizing that it's not their business to be in broadcasting," said Paul Swangard, director of the University of Oregon's Warsaw Sports Management Center. He said clubs are often unable to absorb millions in upfront costs of building production and other staff, starting studios and buying expensive equipment.
And there's a question of whether viewers will tune in for all one team, all the time.
"With all due respect to the Indians, I'm not sure there's an insatiable appetite for Indians programming and nothing else," he said.
Indians President Paul Dolan, whose uncle is Cablevision Systems Corp. chief executive Charles Dolan, believes the club will build Fastball Sports Productions into a revenue-producing, 24-hour sports network. The Indians would not share any projections on revenue.
"There is risk we won't generate the revenue we think we will, but that risk should be in the first few years. We're always thinking long term," Dolan said last week.
The Indians had been shopping for a new television contract since a deal with Fox Sports Net Ohio expired after last season, when the club made $17 million by selling broadcast rights to FSN.
Sterling Entertainment Enterprises, owner of the Mets, will launch SportsNet New York in April with Comcast Corp. and Time Warner. Besides baseball, the network will air more than 230 hours of Jets-related content, including in-season and offseason programming with access to players, coaches and management.
The network says it will reach 8 million people in the New York area. It anticipates annual revenues of at least $72 million, according to Monterey, Calif.-based Kagan Research, which performs market analysis of media companies.
For years, teams have sold rights to broadcast their games to cable networks such as FSN and broadcast channels for millions of dollars. Besides guaranteed revenue and a locked-in number of cable subscribers with access to games, teams also get the benefit of television expertise. The networks produce, edit and air programming and handle negotiating with cable companies to work out distribution and technical details, among other things.
The rights-holders make money by selling advertising, boosting ratings and being able to market themselves as "the home of fill-in-the team."
The Houston Astros ultimately decided against launching a network.
"You have to consider where you are financially, where you are compared to other teams, where you are with your current TV package, what your initial investment is and when your payback comes -- those are all things to consider," said Pam Gardner, the Astros' president of business operations.
But as teams scramble to boost payrolls and rake in more revenue, more are taking a shot at television and other growing technology such as the Internet, satellite radio and producing content for new telephone video services, said Lee Berke, president of LBH Sports, Entertainment & Media Inc. in Scarsdale, N.Y.
"It's not that every team will do their own network. There are reasons why some will and some won't, but every team is going to seriously explore it because of all the upside, all the return," Berke said.
Berke has helped teams build networks, including the YES Network created in 2002, which is now worth an estimated $1.1 billion. It generated $227 million in revenue in 2004, according to Kagan Research.
He said the teams that have failed had a variety of problems, including running into legal roadblocks, negotiating cable fees that were too high or misfiring when it came to deciding how their networks would be distributed to customers.
"The Portland Trail Blazers didn't have all the games on the network, and exclusivity is a key part. You want to say the only way you can see our games for the most part is on this network," Berke said.
Both the Indians and the Mets will allocate some games to free television in local markets to attract viewers they would not otherwise reach.
Reaching more eyeballs is important, because it translates into higher advertising revenue, said analyst John Mansell, of Kagan Research. Big networks such as Fox are at risk of losing ad revenue and some ratings as more teams bolt, he said.
But he added most teams, particularly in smaller markets, will continue to rely on the FSNs of the world in some way, especially because those networks already reach millions of viewers through already established agreements with the nation's major cable companies.
"It's the cable operator that has most of the cards," Mansell said.
A bitter dispute between Cablevision and the YES Network was resolved in 2004 when an arbitration panel ordered Cablevision to offer YES to its 3 million subscribers on its basic cable package, and not as a premium channel.
Randy Freer, chief operating officer of Fox Sports, which operates FSN Ohio, said the company wanted to extend its relationship with the Indians but understands why it and other teams are trying to broadcast on their own.
"There's only so many tickets that you can sell and there's only so much that you can do" to make money, he said. "There's pressure on all sides of it and eventually they get to the television side of it."
Story (http://www.detnews.com/apps/pbcs.dll/article?AID=/20060107/BIZ/601070377/1004/SPORTS)
CLEVELAND -- Some say working in television is a competitive sport, but that doesn't necessarily mean professional sports teams will find success in broadcasting.
The Cleveland Indians have become the latest in a line of about 30 professional teams to take a crack at running a regional network, announcing a deal last week with cable company Time Warner Inc. The New York Mets and Jets plans to launch SportsNet New York this year.
The Indians' goal is to earn more revenue and control programming much like the New York Yankees' YES Network and the Boston Red Sox's New England Sports Network, which have done well.
But those markets are much larger and richer than Cleveland, one of the nation's poorest cities, and have teams whose appeal goes beyond city limits -- keys, experts say, to sports teams hitting home runs in the TV business.
While teams in New York, Boston, Chicago and California have recorded victories, others have failed for various reasons: the NBA's Portland Trail Blazers, Charlotte Bobcats and Houston Rockets are a few. Planned networks for the Kansas City Royals, Houston Astros and Minnesota Twins never came to be.
"Teams are realizing that it's not their business to be in broadcasting," said Paul Swangard, director of the University of Oregon's Warsaw Sports Management Center. He said clubs are often unable to absorb millions in upfront costs of building production and other staff, starting studios and buying expensive equipment.
And there's a question of whether viewers will tune in for all one team, all the time.
"With all due respect to the Indians, I'm not sure there's an insatiable appetite for Indians programming and nothing else," he said.
Indians President Paul Dolan, whose uncle is Cablevision Systems Corp. chief executive Charles Dolan, believes the club will build Fastball Sports Productions into a revenue-producing, 24-hour sports network. The Indians would not share any projections on revenue.
"There is risk we won't generate the revenue we think we will, but that risk should be in the first few years. We're always thinking long term," Dolan said last week.
The Indians had been shopping for a new television contract since a deal with Fox Sports Net Ohio expired after last season, when the club made $17 million by selling broadcast rights to FSN.
Sterling Entertainment Enterprises, owner of the Mets, will launch SportsNet New York in April with Comcast Corp. and Time Warner. Besides baseball, the network will air more than 230 hours of Jets-related content, including in-season and offseason programming with access to players, coaches and management.
The network says it will reach 8 million people in the New York area. It anticipates annual revenues of at least $72 million, according to Monterey, Calif.-based Kagan Research, which performs market analysis of media companies.
For years, teams have sold rights to broadcast their games to cable networks such as FSN and broadcast channels for millions of dollars. Besides guaranteed revenue and a locked-in number of cable subscribers with access to games, teams also get the benefit of television expertise. The networks produce, edit and air programming and handle negotiating with cable companies to work out distribution and technical details, among other things.
The rights-holders make money by selling advertising, boosting ratings and being able to market themselves as "the home of fill-in-the team."
The Houston Astros ultimately decided against launching a network.
"You have to consider where you are financially, where you are compared to other teams, where you are with your current TV package, what your initial investment is and when your payback comes -- those are all things to consider," said Pam Gardner, the Astros' president of business operations.
But as teams scramble to boost payrolls and rake in more revenue, more are taking a shot at television and other growing technology such as the Internet, satellite radio and producing content for new telephone video services, said Lee Berke, president of LBH Sports, Entertainment & Media Inc. in Scarsdale, N.Y.
"It's not that every team will do their own network. There are reasons why some will and some won't, but every team is going to seriously explore it because of all the upside, all the return," Berke said.
Berke has helped teams build networks, including the YES Network created in 2002, which is now worth an estimated $1.1 billion. It generated $227 million in revenue in 2004, according to Kagan Research.
He said the teams that have failed had a variety of problems, including running into legal roadblocks, negotiating cable fees that were too high or misfiring when it came to deciding how their networks would be distributed to customers.
"The Portland Trail Blazers didn't have all the games on the network, and exclusivity is a key part. You want to say the only way you can see our games for the most part is on this network," Berke said.
Both the Indians and the Mets will allocate some games to free television in local markets to attract viewers they would not otherwise reach.
Reaching more eyeballs is important, because it translates into higher advertising revenue, said analyst John Mansell, of Kagan Research. Big networks such as Fox are at risk of losing ad revenue and some ratings as more teams bolt, he said.
But he added most teams, particularly in smaller markets, will continue to rely on the FSNs of the world in some way, especially because those networks already reach millions of viewers through already established agreements with the nation's major cable companies.
"It's the cable operator that has most of the cards," Mansell said.
A bitter dispute between Cablevision and the YES Network was resolved in 2004 when an arbitration panel ordered Cablevision to offer YES to its 3 million subscribers on its basic cable package, and not as a premium channel.
Randy Freer, chief operating officer of Fox Sports, which operates FSN Ohio, said the company wanted to extend its relationship with the Indians but understands why it and other teams are trying to broadcast on their own.
"There's only so many tickets that you can sell and there's only so much that you can do" to make money, he said. "There's pressure on all sides of it and eventually they get to the television side of it."
Story (http://www.detnews.com/apps/pbcs.dll/article?AID=/20060107/BIZ/601070377/1004/SPORTS)