Scott Moore leans on the edge of his desk and turns up the volume on the television.
The president of broadcasting at Rogers Media is only half listening to what pitcher R.A. Dickey has to say in his welcome-to-the-city press conference, because his mind is racing ahead to what a competitive Toronto Blue Jays baseball team could mean to his company’s television ratings.
While other teams are signing rich long-term television deals that will see tens of millions of dollars funnelled to player payrolls – the Los Angeles Dodgers are reportedly putting the final touches on a $7-billion (U.S.) deal with Time Warner that will span 20 years – Rogers is in the middle year of a three-year pact with itself to show Jays games exclusively on its Sportsnet channels from coast-to-coast for an estimated $35-million a season.
Without a massive broadcasting deal such as the one enjoyed by the Dodgers, Rogers has put its money (literally and figuratively) on boosting its payroll in the coming season to fill seats and hopefully turn its baseball team’s winning record into higher ratings for its television network. With higher ratings comes the ability to charge more to the advertisers who sign on to the company’s television broadcasts, which adds to the parent company’s bottom line.
“Imagine what it would do for Sportsnet if we had a million viewers every night for baseball,” Moore said in a recent interview. “It means being able to charge more for advertising, it gives us more leverage when we take the network to other cable companies, and gives us an opportunity to bring people who are only occasional viewers to come to us first – not only when the game ends, but the next morning and afternoon as well.”
It also makes the broadcast rights more valuable when they come up for renewal at the end of 2014 – at least in theory. Sports programming is seen as one of the last footholds for cable television providers, because people don’t want to watch games after they have happened and leagues tightly control how their games are made available.
“It’s the one piece of content that people don’t want to record,” said Gord Hendren, president of Toronto-based Charlton Strategic Research Inc.
“So the media companies have a guarantee of loyalty from their viewers, and that’s why they want to own these teams,” Hendren added.
Besides that, there’s already a good case to be made for a rich deal when the current one expires – viewership jumped 7 per cent last season to 540,000 a game (an increase of 25 per cent from 2010). When the Blue Jays were winning world championships, it could draw more than a million viewers a night – proving there’s room to grow.
But with Rogers the only game in Canada when it comes to Blue Jays rights – no other Canadian broadcaster has demonstrated the capacity or will to show up to 162 games a year – it’s unlikely a billion-dollar broadcasting deal will materialize any time soon.
That leaves Rogers in the enviable position of paying a reasonable fee to lock up its broadcasts (Major League Baseball ensures owners who also own broadcasting assets don’t ridiculously underbid for their own rights), while reaping the benefits of owning what it hopes will be a winning franchise.
To top it off, the league’s revenue-sharing plan means teams with smaller revenues get a cut of rich television contracts signed by their rivals in more profitable markets.
“This is why you see media companies buying teams,” Hendren said. “It’s a win-win at a time when the cost to acquire content is rising. They are looking to protect themselves so they don’t have to sign multibillion-dollar deals to secure content. It really is a win-win.”
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