FS Ohio Reportedly Will Purchase SportsTime Ohio For $200-250M
Fox Sports Ohio is “close to purchasing SportsTime Ohio for between $200 million and $250 million,” according to a source cited by Paul Hoynes of the Cleveland PLAIN DEALER. The sale “could be completed by the end of December and would increase the Indians' rights fees for broadcasting their games from $30 million to an estimated $40 million a year.” The Indians and STO are owned by Larry Dolan and his family, but it is not known “if the sale will help improve the state of the struggling Indians by giving the front office more money to pursue big-ticket free agents or trade for high-priced talent this winter.” The Dolans have operated the Indians and STO “as separate entities,” and they have annually paid the Tribe “about $30 million in rights fees.” Sources said that employees at STO “were told within the past few weeks that the sale is imminent.” Fox and STO reportedly “want the deal done by the end of the year because of new tax ramifications in 2013.” The bidding for STO “came down to Fox and Time Warner Cable.” The main reason Fox purchased STO was “to acquire the rights to the Indians,” and it held those rights “before the Dolans formed STO late in 2006.” There were “rumblings that STO would cease to exist after Fox's purchase, but it appears that Fox will need two networks in Ohio to carry its programming” (Cleveland PLAIN DEALER, 12/3). In Akron, George Thomas wrote what will become of the Browns programming “is an equally significant question.” Sources said that STO’s contract with the NFL team is “up this year, but there are options for renewal that are on hold pending a final outcome of the proposed sale” (OHIO.com, 11/30).
WRITING WAS ON THE WALL: In this week’s SPORTSBUSINESS JOURNAL, John Ourand reports STO since its ’06 launch “has had trouble with its cable carriage deals, which have among the lowest rates of all RSNs.” Data from research firm SNL Kagan shows that cable operators “pay an average of $2.21 per subscriber per month,” which is “below the national RSN average of $2.49.” Rumors of STO's "pending sale have been around for several years,” though Time Warner Cable had “long been mentioned as a potential suitor” (SPORTSBUSINESS JOURNAL, 12/3 issue).