There’s no secret at this point as to why sports teams establish regional sports networks. It allows the teams editorial control over content relating to the teams and these RSNs can act as virtual ATMs for the them as well.
When the Yankees launched the YES Network in 2002, it was another revenue stream for Steinbrenner and the Bronx Bombers to invest in the team. Revenue generated through YES goes back into the team. The same applies to NESN—the New England Sports Network that the Boston Red Sox own an 80% stake in. The other 20% is held by the Boston Bruins.
21st Century Fox has since bought out YES and owns an 80% stake in the New York RSN.
The same applies to the New York Mets and SportsNet New York. While the Metropolitans haven’t had the same on-field success as their Gotham rivals from the Bronx, the Mets do own a controlling interest in SNY with the rest held by Comcast and Time Warner.
It once applied to the Cleveland Indians as well, who once launched Sports Time Ohio as a Cleveland-centric RSN, but it was then sold to Fox amidst financial issues. STO and the original Fox Sports Ohio are now virtual partners.
Chicago has Comcast Sports Net with the Cubs, White Sox, Bulls, and Blackhawks each owning 20% stakes in their channel, but there has been talk as of late that the Cubs may want to sign a new television contract that could include establishing their own RSN as a rival to CSN Chicago.
A similar TV debate over rights also happened in Philadelphia with the Phillies. It was once rumoured that they could also sign their own deal with Fox for a new Phillies-centric RSN, but they instead re-upped with CSN Philadelphia with some games also going to WCAU-TV NBC 10 Philadelphia, which now is a sister channel to CSN Philly thanks to NBC & Comcast now going together like (rotten) peanut butter and jelly.
From the Empire Sports Network, to the various SportsChannels, to Home Team Sports, to the Midwest Sports Channel, to Victory Sports One, to the Sunshine Network, to the Royals Sports Television Network, to C-SET, to the Dallas Cowboys TV Network, to Channel 4 San Diego, regional sports networks have come and gone over the years. And Fox, being the Grand Pubah of RSNs have since split and segmented some of its even more established RSNs.
Example: Fox Sports South was split into several other channels to serve sports fans in Tennessee and the Carolinas that are more into that region’s teams. Fox Sports Tennessee and Fox Sports Carolinas are now regional subfeeds of South, along with co-owned SportsSouth that was once Turner South, the Turner-owned Southern lifestyle channel based out of Atlanta that practically doubled as an RSN airing Braves, Hawks, and Thrashers games.
When RSTN folded, it led to the creation of Fox Sports Kansas City. Now it and Fox Sports Indiana are subfeeds of St. Louis-based Fox Sports Midwest. The same applies to Fox Sports Oklahoma—a subfeed of Fox Sports Southwest.
Fox Sports Houston was also a subfeed of Fox Sports Southwest for a time.
Then, in 2012, a curious thing happened that led to our first case.
Case #1–CSN Houston
Fox Sports Southwest was perceived as being too much of a Dallas-centric channel even though it also showed events from the Houston area teams. The Astros and Rockets had been angling for a regional sports channel for a while. In 2012, Comcast Sports Net Houston was launched, just in time for Rockets basketball.
NBC even announced that they had secured financial backing from Houston mayor Annise Parker for the building of a state-of-the-art studio for CSN Houston in the Pavilions in Downtown Houston, near the Main Street Square MetroRail station. That area is now called GreenStreet—a commercial development in the downtown area.
Comcast has been the primary cable provider in Houston ever since they and Time Warner swapped the Houston and Dallas/Fort Worth metroplex markets a few years ago. The list of RSNs Comcast now has reads like a who’s who of channels:
CSN New England
CSN Bay Area
They also once had a CSS Southeast channel that aired collegiate athletics from that region, but has shutdown with the SEC Network on the verge of debuting (on all cable systems, except Time Warner, by the way).
There were plenty of high expectations for carriage of the channel. The Astros were not doing too well, baseball-wise, but the Rockets were on the up-and-up with the addition of James Harden who played a crucial role in helping the Oklahoma City Thunder reach the NBA Finals in 2012. They lost in five games to the Miami Heat.
If anything would drive interest in the channel, it would be the Rockets along with a bevy of Texans, Longhorns, and Aggies coverage.
Only one problem—no one could see it.
Of course, the channel was available on Comcast, but not everyone in Houston has Comcast. Others have AT&T U-Verse, others have DirecTV, others have Dish Network, and others have Suddenlink. Also, the network, while bearing the Comcast name was co-owned by the Astros and Rockets. Meaning the teams were setting a price-per-subscriber tariff on the channel.
That was the price set by CSN Houston to watch a horrible baseball team and a basketball team that has not won an NBA championship since Hakeem “The Dream” Olajuwon retired. According to Kabletown, a CSN Houston channel should cost half as much as the entire ESPN family of networks at $9 per sub.
They even launched an “iWantCSNHouston” campaign to aim their displeasure at the impasse between the network and the providers at the AT&Ts and DirecTVs when really it was the fault of Comcast.
Turns out, no one wanted CSN Houston.
Ladies and gentlemen, what happens when sports teams want to be the media.
As a result, other would-be-carriers of the CSN Houston channel balked at carrying the channel. It would be one thing if the Astros were perennial World Series contenders like they were in 2004 and 2005 instead of the “DisAstros” they are now outside of George Springer and Jose Altuve.
It got to a point where it was once so bad that the Texas Rangers (who did a big time re-up with Fox Sports Southwest until 2034 (!!!)) were OUTRATING the Astros in Houston.
Why was this? One—because no one outside of Comcast/Xfinity subscribers had CSN Houston, and Two, the Rangers were at least watchable because they were a winning baseball team. The Astros…eh, not so much.
And, if subscriber fees are where these regional sports networks get the bulk of their revenue, then there was no doubt that CSN Houston was bleeding and bleeding cash FAST. Being that deep in the red will eventually lead to your station declaring bankruptcy and having to go through the Chapter 11 proceedings in court.
The Astros clearly wanted to get out of the deal with a network that they co-owned and said that the bankruptcy proceeding was done so they couldn’t back out of the deal. Plus, the Houston Regional Sports Network couldn’t pay rights fees to the Astros. That overpricing of the channel may have had something to do with that, ya think?
Then, this month, it was announced that the Astros and Rockets had announced a deal for a reorganization plan that would sell CSN Houston over to AT&T (based in Dallas, ironically) and DirecTV. AT&T, ironically, is also trying to buyout DirecTV and has had their eyes on the regional sports network business for a while. Comcast is not expected to give up without a fight and may announce its own plan of reorganization, likely one preserving the CSN Houston channel.
Such a deal will also lead to the channel being renamed as “Root Sports Houston”. DirecTV Sports Networks already owns and operates three other regional sports networks, all under the Root Sports name. There’s one in Pittsburgh for the Pirates and Penguins, one in Denver/Rocky Mountains for the Rockies and Utah Jazz, and one in the Northwest for the Seattle Mariners.
Also, the M’s bought a majority stake in the Seattle channel when it appeared that Chris Hansen, Steve Ballmer, Wally Walker had a deal to move the Sacramento Kings to Seattle and relaunch the SuperSonics, likely leading to them also having to do a deal for an RSN. The Kings remained in Sacramento because of a scuzzy deal with the NBA, but the Mariners’ Root Deal allowed them to have the money to sign former New York Yankee Robinson Cano to a major 10 year, $240 million contract. That will likely have Cano retiring in Seattle unless something “happens”—as in to his play or to his viewing of the city.
All of the current Root channels were once Fox Sports-branded as well. The Astros and Rockets will likely be in a pretty long fight with Comcast over another $100 million loan related to CSN Houston’s startup costs. DirecTV will own 60% of the channel and AT&T will own the remaining 40%, meaning the Houston Regional Sports Network would be owned and operated by conglomerates instead of a conglomeration consortium with two professional sports franchises.
Oh, yeah, and it will be available to all of the Houston area. Comcast has to carry the channel as part of its carriage agreement with Houston Regional Sports Network and, of course, it’ll be on AT&T and DirecTV since they’ll own it.
October 2nd is the date to wait for. If approved this will likely mean that CSN Houston will be no more and be replaced by Root Sports. Hopefully, none of the on-air talent will be fired & the studios, production staff, and reporters and analysts will stay and nothing will change except the name of the channel and the on-air graphics. But, this is AT&T and DirecTV we are talking about—two companies with histories of screwing over people (like most companies in capitalistic America do).
The culprit here may be Comcast, but a bigger culprit is Major League Baseball. MLB teams are encouraged (instead of doing national deals) to do regional deals because they make more money regionally than they do nationally. Fans in baseball are older and more tribal (and conservative) than NFL and NBA fans who have more of a national, progressive mindset.
So, if MLB did more national deals, these RSNs wouldn’t exist or would have less meaning. It’s part of the reason why the NFL is so successful.
But, while the Houston sitch seems to be reaching its apex, the one in Los Angeles is still very, very hot.
Case #2—SportsNet LA
In the Los Angeles/Southern California market, Fox not only had one sports channel, but two given that the City of Angels is basically the flagship market for Fox. They had Fox Sports West and Fox Sports West 2 (later rebranded as Fox Sports Prime Ticket) that aired games of the Dodgers, Angels, Lakers, Clippers, Kings, Ducks, USC, UCLA, and other collegiate and high school sports.
So much of Fox Sports’ programming comes out of LA. Then, the Southland’s two biggest teams were nudged in a side a little bit by the largest cable provider in the area—Time Warner Cable.
Time Warner already had lesser known regional sports networks in markets such as Kansas City and Upstate New York. Getting into LA, though, would be their biggest prize.
First it was the Lakers, when there were rumors going back a while over when they would start a regional sports network that would be more Laker centric. They decided to do so in collaboration with Time Warner Cable when they announced a new 20-year agreement for Lakers games to be shown on the network. But only Time Warner was picking it up at the time, given that they owned the channel.
As the 2012-13 NBA season drew closer and closer and closer, more and more cable, satellite, and telco providers were lining up to carry the new Lakers channel. It was also announced that broadcasts of the WNBA’s Sparks and MLS’s LA Galaxy would also be seen on the new Time Warner Cable SportsNet. Plus, it made history when it launched as a sister channel, Time Warner Cable Deportes—the first ever all Spanish regional sports channel.
Talk about a sign of the times. Hint, hint, Fox Sports in Miami.
The channel launched with all sorts of programming related to the three teams, including one that shows the process of becoming one of the “Laker Girls”.
At that time, the Lakers were not a good basketball team and the channel’s on-air graphics looked very similar to those of ESPN, believe it or not. Plus, the team’s coverage looks as if the Lakers are having editorial control over content—a huge no-no for sports journalists, by the way.
The disadvantage of the arrangement was that games that could normally be seen on KCAL-TV Channel 9 (a local independent station owned by CBS) and Fox Sports West/Prime Ticket would no longer be on those channels. So, to get your purple and gold fix, you had to pay extra for the new Time Warner Cable SportsNet.
Or just listen to the games on radio…on ESPN 710, KSPN-AM.
Then, at around the same time that the Lakers channel launched (in time for the basketball season that year), the Dodgers were contemplating a similar option.
They wanted to do their own regional sports channel, but they wanted to own it unlike the Lakers arrangement. The only question was if they would own the channel with Fox as partners or Time Warner Cable as partners.
After an exclusive negotiating period with Fox, in came Time Warner with their own plans for a regional sports channel owned by the Dodgers. It looked as if Fox would indeed re-up with the team, but just as Orange is the New Black, Blue is the New Green.
The Dodgers signed with Time Warner for a second channel instead of simply being lumped into the Laker networks, Time Warner Cable SportsNet and Deportes. This one would be called SportsNet LA, and would feature almost all Dodgers content—similar to the YES Network with the Yankees. It would debut in 2014, and on-air talent would include Alanna Rizzo, a former reporter for MLB Network.
No one (myself included) expected the Dodgers’ channel to have any kind of coverage issues. After all, the Dodgers’ 2013 season where they reached the NLCS practically doubled as an infomercial for the new network. The introduction of Cuban phenom Yasiel Puig to baseball would only help a campaign for a Dodger channel.
In fact, in the first billboards that were seen throughout Southern California advertising SportsNet LA, guess whose likeness was seen? That’s right—Yasiel Puig.
Except for one small issue—the price per subscriber. Uh-oh, here we go again
The price per subscriber for the Dodgers’ channel–$4. Houston, we have a problem.
That can at least be a little bit more justified than for CSN Houston because the Dodgers are a winning baseball team. Plus, given that sports are basically the last things left on TV that we can count on to be live and unscripted, it gives those that want to start regional sports networks some cache in these projects.
But, that doesn’t matter if other providers in your market don’t want to carry it. The other providers in LA include Comcast, Cox, Charter, AT&T, Verizon Fios, DirecTV, and Dish Network.
For the time being, all have balked. Outside of the network’s preseason campaign to advertise the channel which included giving out Dodger Dogs to fans, they have also started a campaign similar to CSN Houston’s called “I Need My Dodgers”, including the Twitter hashtag #INeedMyDodgers. This too is aimed as a PR stunt by Time Warner and the Dodgers at getting Angelenos to direct their attention at the other cable providers in the area and direct them away from the cigarette-like scent of that $4 price per subscriber bit.
Instead, the Dodgers’ channel, again with an impressive on-air product ala CSN Houston, launched only on Time Warner Cable systems, leaving others in the Southland out in the blue cold and feeling blue that they couldn’t see Clayton Kershaw, Hanley Ramirez, Puig, and the rest of their beloved team.
Demand did not pick up at the onset of the season, primarily because of the cigarette-like scent of the $4 price per subscriber as it did for the Laker channel.
There was even an internet meme that went around when Josh Beckett and Clayton Kershaw threw no-hitters earlier this year for the Dodgers on the basis of if they were really no-hitters if no one saw them. Because, similar to the Lakers’ arrangements, all Dodgers games that were previously on KCAL and West/Prime Ticket were no longer on those channels. Meaning that one had to have this new channel and pay the $4 if they “needed their Dodgers”.
And, for the time being, even subscribe to Time Warner Cable, since no one else has inked deals for the network. At least the Laker network has the cables, satellites, and telcos on board.
If no one saw those no-hitters, they definitely heard them. KPCC 89.3, the public radio behemoth of Los Angeles and Southern California, reported that the impasse between SportsNet LA and the cables/satellites/telcos has actually produced a spike in radio ratings for KLAC Fox Sports 570—the flagship radio station of the national Fox Sports Radio network. Some shows on Fox originate from KLAC, leading to a running radio joke that FSR was basically “SuperStation KLAC”.
Ironically, KLAC is a Clear Channel station. The first SportsNet billboard with Puig’s likeness that was spotted by a reporter for the Los Angeles Daily News was a Clear Channel billboard advertising the channel’s launch date of February 25th 2014. The Dodgers asked Clear Channel to take down the ad from the billboard.
If the Los Angeles situation is mirroring that of the Houston one, it’s because it is. Sports channel with a major team that no one outside of those with one (or two) cable providers in the region (Bright House) can see. And because of that, it’s cutting into the major source of revenue for regional sports networks—subscriber fees.
While SportsNet LA’s $4 per sub is more justified than that of CSN Houston’s $4.30, it doesn’t mean anything if the other providers do not jump on board because of the cigarette-like smell of the $4. That is cutting into SportsNet LA’s revenue. And while there hasn’t been any report yet on the specific revenue vs. expenses of SportsNet LA, it’s a safe bet to say that it is already bleeding and bleeding cash fast because it’s on a grand total of ZERO providers outside of Time Warner Cable and Bright House.
No subscribers, no revenue. Plus, as with the CSN Houston example, those that even have Time Warner or Bright House probably don’t want to pay the exorbitant cigarette-like smell of the $4 per subscriber for an “All Blue, All the Time” channel.
In addition, there’s the added rub of Time Warner Cable being bought out by Comcast and the deal closing at the end of the year. Such a deal would expand Comcast into Los Angeles (as well as Upstate New York, Milwaukee/Green Bay, the Carolinas, Kansas City, Dallas, San Antonio, Austin, and Oceanic Time Warner Cable—Hawaii). It has even been speculated that DirecTV may be holding out until the deal closes to get a better price per subscriber rate from a “Comcast SportsNet LA”.
Ever since, the Dodgers and Time Warner Cable have taken legal action against DirecTV as a result of the SportsNet LA negotiations. California politicians have even petitioned the FCC to bring an end to the standoff, even though DirecTV has said that they want to mediate and not arbitrate. Time Warner has said they are willing to go through with arbitration. And, DirecTV CEO Michael White has said that the only way to potentially end the standoff with DirecTV is for the Dodgers to directly step in.
In short, this doesn’t seem to be ending anytime soon and the sniping only seems to get worse. SportsNet LA claims on its website that DirecTV doesn’t want a deal and wants SportsNet LA to agree to terms that it would never agree to for its Root Sports channels in Pittsburgh, Seattle, Denver, and coming soon to a Houston TV near you.
Of course, a counterclaim can be that Time Warner Cable is intentionally playing hardball with providers to get more people in SoCal to cancel and flock to TWC.
Also, a few days ago, the Angels played the Dodgers on both SportsNet LA and Fox Sports West—a ratings bonanza for Fox Sports West. Plus, the Angels tweeted this prior to their four-game series against the Dodgers this past week.
“FACT—All 4 of the Angels games vs LAD will air on FSW with no blackout restrictions in the Southern California region.”
Shots fired, indeed.
That tweet was a Fox Sports West-induced direct shot at the Dodgers, Time Warner Cable, and SportsNet LA. They knew the ratings they’d get from displaced Dodger fans that didn’t have SportsNet LA. It basically said, “Hey Dodgers fans! Your team doesn’t care if you can see them or not because Blue is the New Green in Chavez Ravine. But you can watch them as they play us on Fox Sports West—a channel that, unlike SportsNet LA, everyone in Southern California actually has! ;-)!”
Maybe they were right about that whole “Los Angeles” Angels of Anaheim, thing…at least all of LA can see the Angels!
Reports said that viewership for that Angels/Dodgers series on Fox Sports West drove up their audience over 200%.
What should make the Dodgers and Time Warner Cable feel even worse is that while they can’t sign a television deal to save their lives right now, ESPN’s new SEC Network is doing quite the opposite. It is on nearly every cable, satellite, and telco provider except Time Warner Cable.
So, while the SEC Network will actually be seen by everyone because ESPN and the SEC know a little bit more about the demand side of economics, SportsNet LA has been unsuccessful because it thought the demand would be so high to justify the cigarette-like scent of the $4 per subscriber.
There has not been that much demand. Not from cable providers, not from fans. And not from those in the region.
C’est la vie.
The history of the Mid-Atlantic Sports Network in the Baltimore-Washington, D.C. area dates back to 2005 when the Montreal Expos said “Au revoir!” to Canada and hello to the Nation’s Capital and became the Washington Nationals.
When the Nationals moved from Montreal, they didn’t have a television network to broadcast their games. The Baltimore Orioles agreed to share the Mid-Atlantic market with the Nats, and their share in MASN has increased ever since.
There’s also a MASN2 feed as well. Orioles and Nationals games also air on WJZ-TV CBS 13 in Baltimore and WUSA-TV 9 in DC.
When the Nats debuted, the Orioles who owned (and still own) MASN agreed to cede the territory that the O’s claim as exclusive to the Nats in exchange for Washington’s television rights being propped up by Peter Angelos and the Orioles. The new Washington team was owned by MLB at the time. Plus, the Nats’ share in MASN would steadily increase from 5% to 33% with the O’s keeping the remaining 67%.
It was a unique agreement that had to be made in order for the move to DC to be successful. Without it, the Expos would have probably moved to Portland, Oregon instead of the DMV.
By the way, that territory the O’s claim belongs to them extends from southern Pennsylvania into Eastern and Central North Carolina, even though North Carolina is primarily shared territory with the Atlanta Braves.
Prior to the Orioles being on MASN, their games were once shown on Home Team Sports which later became Comcast SportsNet Mid-Atlantic (which is also split into CSN Washington and CSN Baltimore). Angelos claims the Orioles have had the territory since the second incarnation of the Washington Senators moved in the 1970s to the Dallas/Fort Worth Metroplex to become the Texas Rangers.
Ever since then, the Nationals have had very successful seasons and interest has surpassed that of the Orioles in the region. It’s safe to say that there’s a lot of Natitude in North Carolina, Virginia, West Virginia, Maryland, Delaware, and Pennsylvania right now.
This debate seems to be all about rights fees. Angelos wanted to oppose the initial move of the Expos to Washington, DC because he felt it was his team’s exclusive property—even if they were one of the worst teams in baseball at the time. The Nationals have been one of the best teams in baseball for a while now thanks to Ian Desmond, Ryan Zimmerman, and Stephen Strasburg—and they want their fair share.
Washington demanded $120 million in rights fees from MASN and the Orioles. They contend it is in line with their recent success on the field and with television rights for sports increasing as a whole. MASN/Orioles said that they would offer a modest increase of up to $30 million. The fact that the two teams are this far apart on a rights deal has landed this baby in court.
MLB is involved too since it has a vested stake in making sure baseball remains viable in Washington, DC and the one man that is doing all he can to prevent that is Peter Angelos. The Nats’ rights are basically majority owned by another team. This is not like the arrangement in Chicago where the Cubs and White Sox each have 20% of CSN Chicago—a huge portion of Washington’s revenues are due to an arrangement OK’d by the Orioles. They currently have an 85% stake in MASN where the Nationals have 15%.
With the steady rise in the Nats’ stake in the channel, and the rise in their on-field play, the Nats want what they feel is theirs. MLB apparently agreed because a New York court ruled in favor of the Nationals. Since then, the Orioles appealed, and a ruling came down that rights to Nats games on MASN cannot be stripped from the Birds’-owned RSN. The endgame, of course, for Angelos would be for the Nationals to become so fed up with the way they have been treated by the Orioles that they pack up and move someplace else, but that won’t happen because MLB is clearly on the Nats’ side.
Angelos’ shadiness as an owner was also on full display during last year’s NFL opener. Last year, the NFL opened up with a game between the Baltimore Ravens and Denver Broncos. The Ravens were the defending Super Bowl champions at the time. The champs usually open up on a Thursday at their home stadium. But, the Ravens couldn’t open their season at M&T Bank Stadium because the Orioles were playing the White Sox on the same night at Oriole Park at Camden Yards. This forced the Ravens to open on the road in Denver, in a game in which Peyton Manning threw seven touchdown passes against Baltimore.
The Orioles believe that if the Nationals received a larger television rights fee that some of it would find its way back to Major League Baseball and the Office of the Commissioner since they also receive a share of revenue from rights fees.
This last case has more to do with money over broadcasting games than if anyone can actually see the games. Everyone outside of Time Warner Cable subscribers has access to MASN. But, all three highlight the issues of what can indeed happen when teams want to establish these regional sports networks and basically maintain all of the editorial control and revenue for themselves.
It shows what happens when sports teams want to be the media. Maybe they should stick to sports and leave media to people who actually know how to do media.