SBJ/April 3-9, 2017/Media

Golden Knights face complicated media market

Six months before the puck drops on the Vegas Golden Knights’ inaugural season, the team still does not have a local TV deal.

The team is talking to several media companies and expects to have a deal completed in the next month or two.

Fox Sports Net, which was considered the front-runner at the get-go, pushed back on the team’s initial asking price, which is believed to be more than $10 million per year, sources said.

Fox, which still could land the rights, operates two regional sports networks that reach the Vegas market already — FS West and Prime Ticket. It would be easy to add Golden Knights games to one of those channels.

Fox Sports Net has resisted the $10M a year asking price for Golden Knights media rights.
Photo by: GETTY IMAGES
Those two RSNs hold the rights to the Anaheim Ducks and Los Angeles Kings, which they used to carry in the Las Vegas market. Last summer, Fox worked out a deal with the NHL where it gave up the Ducks’ and Kings’ claim to the Vegas market in exchange for in-market streaming rights to NHL games. At the time, it was believed that Fox would have the first crack at the Golden Knights deal.

The team reached out to other potential bidders, including Charter, Comcast and Root Sports. Charter and Comcast generally are not interested in developing RSNs in markets where they do not own cable systems. Charter operates two L.A.-based RSNs — Spectrum SportsNet LA and Spectrum SportsNet — but sources said they have showed little interest in picking up the Golden Knights’ rights.

Root Sports, though, is owned by AT&T, which operates a cable system in the market and is talking with the team.

Digital media also could be an option, as companies like Facebook, Twitter, Amazon and MLB Advanced Media increasingly are paying for sports content.

The club has looked into deals that would split games between an over-the-air local TV channel and an over-the-top provider, like, perhaps, MLBAM. Such deals have been considered many times before without success. Last year, the Los Angeles Clippers and Washington Wizards both flirted with carrying their games on an over-the-top platform. Both ended up cutting traditional rights deals with RSN providers.

Sources identified several potential pitfalls for the Golden Knights as the team tries to sell its local TV rights.

Ironically, one of those pitfalls is the amount of sports competition in the market. For example, six MLB teams lay claim to the Vegas market: the Angels, Arizona Diamondbacks and San Diego Padres (Fox Sports); Los Angeles Dodgers (Spectrum SportsNet); and San Francisco Giants and Oakland A’s (NBC Sports Group). Multiple NBA teams also claim the market.

Plus, it’s hard to sell a single-sport RSN to distributors, especially when the one sport is hockey and the distributor is in a warm-weather market. In general, RSN hockey ratings in the South are much lower.

“It tends to be a struggle from a TV standpoint to build ratings for hockey in Sun Belt markets,” said longtime media consultant Lee Berke, president and CEO of LHB Sports, Entertainment and Media. “The interest and initial enthusiasm for the team will help for a while. The question after launch will be, what is the regular rating performance.”

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.


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