Baseball games on "free" TV are increasingly rare
As the Major League Baseball season gets underway, fans will find it increasingly difficult to watch their favorite teams on "free" broadcast television.
ESPN, which is owned by Walt Disney (DIS), plans to show 90 regular season games this year, up from 80 games last year, according to Ben Carfado, a spokesman for the sports network. Fox Sports expects to show as many as 52 games this year, compared with 26 last year. Forty of those will run on Fox Sports 1, an ESPN rival launched last year, and 12 on the Fox broadcast network, said Lou D'Ermilio, a spokesman, in an email."This season is the first year of a new contract that grants us cable rights we didn't have before," he wrote.
Media companies are increasingly willing to pay steep prices for the rights to broadcast sports because it is one the few genres of programming that people watch live. ESPN, which has been a cash cow for years, agreed in 2012 to an eight-year, $5.6 billion deal with Major League Baseball that represented a 100 percent increase over its previous agreement. Fox, which is part of 21st Century Fox (FOX), and Time Warner's (TWX) TBS network signed an 8-year, $12.5 billion agreement with MLB in 2012. That deal also represented a 100 percent increase over its older deal.
"Maintaining a national over-the-air presence remains a priority for Major League Baseball," said MLB spokesman Matt Bourne in an email. "We are also pleased that the growth of national and regional cable networks has enabled MLB and its clubs to maximize the number of game telecasts that are made available to fans. The number of national and local game telecasts is at record levels."
Comcast (CMCSA), which signed a 25-year, $2.5 billion broadcast rights deal with the Philadelphia Phillies, plans to offer at least 33 more games over Comcast SportsNet Philadelphia, its regional sports network based in its hometown of Philadelphia. According to a recent Philadelphia Inquirer story, Comcast has asked other pay TV providers to pay an additional surcharge for the additional games, and has threatened to black out the broadcasts for companies that don't pay.
"We are in negotiations with a remaining few and believe they recognize the value these additional games present to their customers," according to a Comcast statement.
Many baseball analysts have predicted the team will have a terrible season so it remains to be seen if Phillies fans will tune in to see the additional games. Los Angeles Dodgers fans were able to watch 50 games on broadcast television last year which will now be shown on the team's SportsLA cable channel. Unfortunately, DirecTV (DTV), Charter (CHTR) and Verizon are balking at carrying the channel, arguing that its fees are too high, according to Reuters. Time Warner Cable (TWC), which runs the channel for the team, signed a 25-year, $8.3 billion deal for the rights for Dodger games last year.
For clubs in major media markets such as New York and Los Angeles, broadcast rights fees make up a significant portion of their revenue, according to David Carter, executive director of the USC Marshall Sports Business Institute and a principal of the Sports Business Group.
"It would seem inevitable that all regular season games will be on pay TV in the not-too-distant future," he wrote in an email. "The incremental and largely non-shared revenue that teams can generate from launching their own network -- partnering with a distributor, like the Dodgers have done with Time Warner Cable, or simply entering into traditional regional cable deal -- is simply too great to overlook. Of course, both MLB and its teams need to be mindful of how best to balance revenue generation with building its fan base, so it is unlikely that all the post season will be on cable TV."
*Updates at 10:41 am Eastern time with background on the Los Angeles Dodgers