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Volume 20 No. 41


First Look podcast, with MLB postseason discussion beginning at the 16:40 mark:

Spurred by a 22-game winning streak from late August through early September that captivated the city of Cleveland, the defending American League champion Indians finished the regular season with MLB’s highest local TV rating.

This marks the first time the Indians have led the league in local TV ratings in at least 15 years, which is as far back as SportsBusiness Journal records go.

Indians games on SportsTime Ohio averaged an 8.33 rating, up 28 percent from last season. The Tribe, which won the AL Central Division this season, toppled the Royals and the Cardinals — the two Missouri-based teams that have been atop the local TV ratings list for the past two years.

SportsBusiness Journal reviewed data from all 30 MLB teams for the entire season.

Overall, 18 of the 30 MLB teams showed decreases. Collectively, the 29 U.S.-based teams were down 4 percent this season (an average of 2.91). In Toronto, Blue Jays games averaged 722,400 viewers on Rogers SportsNet, down 28 percent from a team-record 1.01 million in 2016.

Fox’s 15 regional sports networks posted a 5 percent ratings gain for MLB games compared to last season, with an average 3.25 rating. All the other RSN groups showed decreases. NBC Sports Group’s six RSNs that have baseball saw game ratings drop 15 percent collectively, AT&T SportsNet/Root’s four RSNs with baseball were down 9 percent, and the four teams on independent RSNs were down 4 percent.

Nationally, MLB showed a slight uptick this season, led by ESPN where ratings for MLB games were up 6 percent. That increase primarily was fueled by “Sunday Night Baseball,” which was up 8 percent to an average of 1.7 million viewers. Fox was down 2 percent to 2.1 million viewers, and FS1 was basically flat at 448,000 viewers.

RSNs that carried MLB games were the most-watched prime-time channel — broadcast or cable — in 12 markets. Another eight RSNs that carry MLB games ranked in the top three of their markets in prime time.

Typically, teams that make the playoffs post the biggest ratings. But this year, five of the seven biggest ratings involved teams that did not make the playoffs (the Royals, Cardinals, Orioles, Pirates and Tigers). The Tigers’ 4.48 rating on FS Detroit is the team’s lowest since 2005. The team’s ratings are down a whopping 61 percent since it led the league in 2013.

There is some good news in Los Angeles and Houston, where the Dodgers posted their highest rating since 2012 (a 1.55 on SportsNet LA) and the Astros had their highest since 2008 (a 2.89 on AT&T Houston).

And in D.C., the Nationals posted their highest TV ratings since the team moved to Washington in 2005. Nationals games on MASN averaged a 2.91, which is up 8 percent from last season.

SPN’s recent negotiations with Altice had all the makings of a good, old cable carriage fight, the kind that blows up every couple of years and resets the cable business.

You had a distributor in Altice, which had been public with its desire to cut costs, negotiating with the most expensive TV channel by far. Distributors have long complained about programming costs rising faster than revenue, and many distribution executives hoped that Altice would drive a hard bargain and set the market.

You had a network in ESPN that had been pilloried for months by financial analysts who worried that a declining subscriber base combined with increased rights fees spelled trouble for the media company.

You also had public sniping between the two companies, which tends to presage an extended public and bitter dispute.

Altice’s footprint is full of New York Yankees fans wanting to see the wild-card playoff game.
Both sides were entrenched in their positions and unwilling to move. Neither side could afford to give in, it seemed. Many of my best sources expected ESPN either to go dark on Oct. 1 across Altice or work out a temporary extension.

But Altice and ESPN surprised the media business by reaching an agreement hours before ESPN was due to go dark.

Details of the agreement have been hard to come by for the deal that was announced officially last week.

Here are the most common questions being asked so far about this deal.

Who won?
ESPN is the clear winner, at least based on initial reports. It averted a standoff and added SEC Network and ACC Network on a cable system that covers the New York area market. ESPN secured a rate increase for its channels and got Altice to increase its minimum household penetration threshold, sources said. But sources cautioned me from declaring ESPN as the unquestioned winner based on one open question: We still do not know specifics about where that minimum penetration threshold is and how much flexibility Altice has to launch and market lower-cost tiers that do not include ESPN. ESPN deals typically mandate that it must be on a cable operator’s most widely distributed tier. As “cord shavers” continue to migrate to skinny bundles, those most widely distributed tiers become smaller. The key to the Altice deal is finding out how ESPN addressed that situation. “The rate increase is just window dressing in comparison,” one veteran media executive said.

Altice has around 2.5 million subscribers. Why does this deal matter?
This deal starts a new cycle of affiliate deals for ESPN and provides a blueprint for how those future deals will be negotiated. ESPN’s next negotiation will be with Verizon Fios at the end of 2018, followed by Spectrum in mid-2019 and AT&T in late 2019, sources said. It seems likely that those negotiations will take a similar path as Altice’s.

What are the deal terms?
Here’s what we know, based on several sources with knowledge of the negotiations: The deal runs for four years and includes an annual increase of at least 6.5 percent for Disney’s suite of channels. Specifics on ESPN’s minimum household penetration guarantees are not available, but a network source said ESPN was able to increase it.

What did Altice get out of the deal?
Altice will drop ESPN Classic and get more access to video-on-demand programming. While ESPN negotiated increases in rates and minimum penetration levels, it fell short of its initial ask, sources said.

Did the Yankees playoff game matter? After all, it was only one game.
Cable industry veterans told me not to minimize the impact of ESPN’s exclusive coverage of the New York Yankees wildcard playoff game last Tuesday night. Altice’s footprint is filled with Yankee fans who wanted to see that game. Given subscriber losses that have affected the entire pay-TV industry, it seems clear that Altice did not want to risk losing any number of subscribers, especially with an agreement appearing to be so close.

What was the biggest surprise?
I am blown away by the fact that ESPN was able to get carriage for both ACC Network and SEC Network on cable systems that span Connecticut, Pennsylvania, New Jersey and New York — areas that never will be confused for Tobacco Road or Tuscaloosa. ACC brass, in particular, have to be overjoyed, as this one deal makes its planned 2019 launch as close to a sure thing as you can get.

How does ESPN’s planned over-the-top service factor into this deal?
Distribution executives view all over-the-top services warily. They hate the fact that programming networks are creating more options for cord cutters. Sources said that ESPN reiterated that its planned service will not carry programming from any of its TV networks. It also set up a partnership that allows Altice to sell OTT subscriptions at a discount to its Optimum video subscribers. It’s not clear how much that discount will be.

What’s the biggest takeaway?
Reports of the cable bundle’s death are greatly exaggerated. Cord cutting and cord shaving are happening and are a threat to the pay-TV business. But this deal suggests that distributors and programming networks will work together to try to keep the pay-TV system afloat. The pay-TV dynamic will not dramatically change for the next five to eight years, for programming that matters.

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

David DeNunzio, the new editor-in-chief for Golf magazine and, calls Time Inc.’s efforts to sell the titles, despite a recent run of audience growth, a “great breakup story.”

“It’s really kind of a bittersweet thing. I wish I had a breakup story like this with some of the girls I dated before,” he said.

Golf magazine and its digital counterpart now stand at the forefront of Time Inc.’s effort to sell several of its portfolio titles such as Coastal Living and Sunset following a halted effort by the Sports Illustrated parent to sell itself in full.

That sales effort is ongoing with the aid of investment bank Houlihan Lokey, which assisted with Topgolf’s purchase last year of online game World Golf Tour. But it also arrives as the magazine and are qualitatively and quantitatively at a high point. Recent internal and comScore metrics had at more than 3.3 million monthly unique visitors, up by 76 percent year over year, with mobile traffic, video consumption and social reach all similarly up by high double-digit percentages.

The publications drew widespread national attention in August for an exhaustively reported story by Alan Shipnuck on President Donald Trump’s complicated history with the sport, a feature that also ran in Sports Illustrated and was described by the Washington Post as “one of the best pieces of political journalism of the Trump age.”

So why has Time Inc. decided to shed Golf, despite the recent success and Time Inc. CEO Rich Battista publicly praising the title on several occasions? After choosing to not sell itself, Time Inc. is now focusing primarily on developing its core assets such as People and Time magazine.

“[Golf] needs some better brand focus,” said Chris Stone, editor-in-chief for the SI Group, which oversees Golf. “It’s still one of the smaller entities under the Time Inc. umbrella.”

Golf competes primarily with the Condé Nast-owned Golf Digest, with circulation and total audience reach up for both titles this year compared to 2016, according to the Association of Magazine Media. Both Condé Nast and SportsBusiness Journal parent American City Business Journals are subsidiaries of Advance Publications.

Time Inc. originally acquired Golf in 2000 along with other Times Mirror Magazines titles such as Field & Stream and Yachting that were ultimately resold, leaving Golf as the last remnant of that deal.

Both Time Inc. and Houlihan Lokey declined to detail the state of the Golf bidding process or targeted price. But industry sources said initial bids for Golf were due at the end of last month, and the title is being marketed to potential buyers including traditional publishers, private equity firms and other endemic golf entities. A resolution could arrive by late November.

Meanwhile, DeNunzio in June was promoted to editor in chief from managing editor for instruction, knowing that it would come with no guarantees on what might happen to him or his colleagues under new ownership.

“This was all part of the plan. I went in eyes wide open. But I remain a huge believer in the brand, wherever we end up going,” he said.

Formula One will move from NBC Sports to ESPN next year.
ESPN’s Formula One negotiations over the past month had a distinctly retro feel for Burke Magnus, ESPN executive vice president of programming and scheduling.

First of all, Magnus sat across the negotiating table from a familiar face. Sean Bratches, who left ESPN at the end of 2015 after a 27-year run at the network and joined F1 this year as managing director of commercial operations, was responsible for negotiating the circuit’s U.S. media rights deal.

“Sean is a smart businessperson and a trusted friend and former colleague,” Magnus said last week. “A lot of things came together really quickly and really easily.”

The fact that ESPN picked up F1 rights also gave Magnus a sense of deja vu. Magnus joined ESPN in 1995 as a program associate and was placed in the network’s motorsports division. Magnus said he has been a fan of F1 since watching coverage of the Monaco Grand Prix on ABC’s “Wide World of Sports” as a kid.

“My first job at ESPN of any consequence is that I ran motorsports for a bunch of years,” he said. “This was back when we were in our heyday of our first run through NASCAR. We had NASCAR, IndyCar, Formula One, NHRA.”

Last week, ESPN completed a two-year deal for F1 rights. The deal does not involve a rights fee, and ESPN is committed to using a world feed for its telecasts. F1 will keep control of its over-the-top rights.

The move is surprising in that ESPN has walked away from rights deals with NASCAR and NHRA in recent years.

“It’s high-quality, world-class, live-event programming that generally fits right into spaces where we had availability,” Magnus said. “It is a perfect match.”

John Ourand

At a time when sports are saturated with emotionally charged headlines, digital media veteran Paul Bremer is starting to strike deals for his new outlet GoodSport that focuses on positive news.

Bremer founded GoodSport last year, thinking many people are interested in seeing more positive stories about sports and athletes in society. Bremer said he’s finding an increasingly receptive audience among executives of leagues, teams and their sponsors interested in partnering with the site.

“When you speak to people about the nature of the internet and the positive aspects of the sports world, there has almost universally been acceptance of the premise,” Bremer said. “We look at sports as somewhat of a metaphor for life: the things you learn at the youth and recreational level can be very positive, and a lot of that has been drowned out by a few people who are not necessarily exemplifying that.”

So far, the Norwalk, Conn.-based outlet has produced 350 pieces of content and has been hired by the NBA to work with an unidentified WNBA team. Other assignments have included work with the Positive Coaching Alliance, educational technology company Everfi, and a recent assignment with NASCAR’s “Troops to the Track” program.

Interestingly, Bremer got his spark for the idea when watching the 2016 NFL draft with his sons. Bremer had hyped his kids up about watching the draft all day, he said, only to turn the channel on early when footage appeared showing now-Miami Dolphins offensive tackle Laremy Tunsil smoking through a gas mask.

Bremer raised a low seven-figure amount in one angel round of funding. He said the aim now is to earn a profit and accomplish wider societal goals. The network has a staff of 15 — five full-timers, including Bremer, and 10 freelancers.

The site creates custom content for partners to use on off-site channels and has its own properties on its website, GoodSport writes, shoots and produces the videos, and charges an upfront fee based on the scope of the project. In some cases, GoodSport has the right to sell additional sponsorship or help distribute the content while sharing revenue with the partner. Some entities GoodSport works with own the content and use it for their own purposes, while in other cases, rights and distribution are shared.

“GoodSport was conceived long before the last election cycle and everything that has happened since then,” Bremer said. “But increasingly, with all the stories out there that talking heads on sports networks are talking about, they are not the stories that people truly have an emotive response to.”

Google’s YouTube TV digital pay service will be the first Word Series presenting sponsor and will use the attraction of Fox’s game telecasts to promote brand awareness and sign-ups.

The sponsorship, which lasts through the postseason, includes six-second ads on Fox’s broadcasts during the Fall Classic, along with traditional ad inventory on Fox, a presence on MLB Network and MLB-controlled digital and social media. In-stadium elements include virtual signage and a logo lockup that will appear throughout the World Series ballparks.

The YouTube TV-World Series hookup marks the first time MLB has signed a presenting sponsor for every playoff round. T-Mobile, an MLB corporate sponsor since 2013, bought the presenting sponsorship for the two National League Division Series matchups, and South Korean conglomerate Doosan signed a sponsorship that included presenting status to the two American League Division Series matchups.

Over the past few weeks, Camping World joined the fold, with a five-year deal that includes presenting sponsorship of the American League Championship Series and National League Championship Series. Anheuser-Busch InBev sponsored the Wild Card games in previous years, but not this season.

MLB took the lead on these deals, including YouTube TV, the upstart digital service that already has deals with Fox Sports. Launched as a relatively low-cost alternative to traditional cable, YouTube TV carries Fox, FS1, FS2 and Big Ten Network, in addition to Fox Business, Fox News and FX. It has around 40 channels and costs $35 per month.

While YouTube TV is expected to compete with Fox Sports for live rights at some point within the next decade, Fox executives say they consider the sponsorship as similar to selling ads to a cable or satellite distributor — something it does regularly.

YouTube TV, through its World Series sponsor deal, will generate content around the Fall Classic via access given to some of its correspondents during the series. It will promote a sweepstakes that will offer VIP World Series tickets as the top prize.

“This is the first deal of its kind for one of these services attaching itself to a major sporting event,” said Noah Garden, MLB executive vice president of business. “Obviously we want to reach fans using any device. It means we can reach a younger audience, so I think you’ll see more deals like this across sports.”