SBJ/October 23 - 29, 2006/This Weeks News

Bidding cool, but MLB happy with Turner deal

Major League Baseball never received the frothy bidding war it anticipated for its final piece of postseason TV inventory, snapped up last week by Turner Sports. But with Turner paying an estimated $40 million to $45 million a year for one of the two League Championship Series from 2007-13, MLB executives couldn’t help but be satisfied with the outcome.

League Championship Series ratings averages have covered a broad range recently, from 7.0 for Astros-Cardinals in 2005 ...
Turner, with the deal, deepened its ties to baseball by adding new postseason inventory to its previously obtained holdings of League Division Series games starting next year, creating a consistent programming and sales channel across two rounds of postseason play as it replaces Fox as the TV outlet for those games. The deal also is believed to have met, and likely exceeded, MLB’s internal financial goals.

“This made the most sense,” said MLB Commissioner Bud Selig. “And the economics were what we wanted.”

The new Turner deal pushes MLB’s annual haul from national TV to about $700 million a year. When also including other broadcasting and media deals, such as baseball’s pact with XM Satellite Radio, the largess surpasses $800 million.

By comparison, all of MLB grossed $1.2 billion in total revenue in 1992, Selig’s first year running the sport.

Still, with baseball surging to another round of historic highs in attendance, merchandising, online activity and other metrics of fan affinity, the lack of a bidding war for some of the sport’s top TV programming was striking.

ESPN tendered a bid, but it was much lower than Turner’s, industry sources said, and ESPN refused to approach or match Turner in part because the latest package did not include any digital rights.

… to 11.7 for the Red Sox’s dramatic comeback against the Yankees in 2004.
MLB sold some digital content rights to ESPN last year as it was also brokering an extension to that network’s regular-season cable TV package. It did not, however, include any digital rights in this summer’s TV deals with Fox and Turner.

“We didn’t need to do something that wasn’t [financially] a minimum break-even for us,” an ESPN executive said. “Without the full set of rights, we really weren’t interested in participating.”

October is also one of ESPN’s stronger programming months, with existing investments in NFL “Monday Night Football,” college football and NASCAR (returning to the network next year) lessening its need for another big-ticket item.

Fox also had conversations with MLB about the LCS package that was obtained by Turner last week, but it declined to submit a formal bid.

In this summer’s MLB TV dealings, Fox secured the other half of the league’s LCS games, also through 2013. American League and National League series coverage will now alternate annually between Fox and Turner.

Consistent with its retreat earlier this year from the Divisional Series games, Fox executives did not want baseball to dominate its prime-time schedule in October. Furthermore, LCS ratings have shown to be wildly erratic (see chart), with epic matchups such as Boston-New York drawing World Series-like ratings, and other, lesser pairings proving far less competitive against rival programming.

“It’s not helping our prime-time schedule at all,” said one Fox executive.

Several years ago, moving a key part of MLB’s TV inventory to cable would have raised eyebrows. Now, however, nearly every other major sports property, with the exception of the NFL, has already made such a shift. Many within the industry insist the lines of demarcation have all but ceased to exist.

“The television landscape has changed,” said David Levy, president of Turner Sports. “The lines between cable and broadcast television are now virtually nonexistent. They are less defined as distinct, different properties.”

Turner’s dealings with MLB this summer brought it rights to weekly Sunday afternoon game coverage and the league’s All-Star Game selection show, among other elements.

Recent LCS ratings

American League National League
Year
Teams
Avg. rating/share
(no. of games)
Teams
Avg. rating/share
(no. of games)
2006
Detroit vs.
Oakland
5.4/11 (4)
N.Y. Mets vs.
St. Louis
6.1/10 (7)^
2005
Chicago vs.
L.A. Angels
7.0/12 (5)
Houston vs.
St. Louis
7.0/12 (6)
2004
Boston vs.
N.Y. Yankees
11.7/20 (7)
Houston vs.
St. Louis
8.0/15 (7)
2003
Boston vs.
N.Y. Yankees
10.7/20 (7)
Chicago Cubs vs.
Florida
10.9/19 (7)

^ Ratings through the first five games of the seven-game series. Game 7 was scheduled for after press time for this issue.
Sources: Fox, Nielsen Media Research, SportsBusiness Journal archives

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