White Sox really smart move on broadcast rights deal

[caulfield12]

To only renew their agreement until 2023-2024 off-season.

In theory, that's going to be perfect timing if they can go on an extended run these next three seasons and really bump up their t.v. ratings and surpass the Cubs/Marquee Network.

Not to mention all the issues with the CBA will/should be ironed out by that point in time, in terms of forecasting future incoming revenues.

Then, they're going to be in a MUCH better position to have 25-50% more money flowing in to utilize on free agents, international as well as extensions for Giolito and Tim Anderson (the ship with Lucas might have already sailed, unfortunately.)  But at least we'd have the opportunity to make a legit $150+ million offer if he continues to sustain his performance level as the ace of the staff and top Cy Young candidate.

The below is not directly Sox-related, and one can certainly argue that NCAA basketball/Final 4/March Madness, and league-wide deals for NBA, NFL or even NHL are quite different than for any individual team, but the point still stands about not getting locked into the "security" of a much longer term deal.  The White Sox are essentially betting on themselves, and it's really looking like it was the right move unless they completely implode the next 3 seasons.

 

https://sports.yahoo.com/ncaa-president-mark-emmerts-35-billion-mistake-will-define-his-failed-tenure-232648011.html

Edited March 24, 2021 by caulfield12

[South Side Hit Men]

JR owns half the network (25/25 Bulls Sox). Unless the Reinsdorfs sell the White Sox to a new owner, they are never going to break off their two teams into two separate stations unless cable completely collapses and they go to a separate streaming plus model.

The Bulls don't have enough interest in a stand alone network (like the Lakers have). Even with the 2005 WS, the Sox didn't overtake the Cubs, and Marquee isn't such a great deal as a stand alone entity. The Cubs really had to fight to get on the major carriers, and they had much more leverage than the White Sox would, even if they won three straight World Series. 

In terms of cash flow, both teams rather maximize revenue to the television networks they own, and allocate as minimal rights fees to the teams to short change revenue sharing. The Cubs/Tribune Co. did that for decades on the television/radio end, giving the Cubs peanuts for their broadcast rights and keeping all the revenue corporate. The Sox/Bulls (and their stadium partner BlackHawks) aren't shifting away from this arrangement unless cable is completely dead.

[caulfield12]

3 minutes ago, South Side Hit Men said:

JR owns half the network (25/25 Bulls Sox). Unless the Reinsdorfs sell the White Sox to a new owner, they are never going to break off their two teams into two separate stations unless cable completely collapses and they go to a separate streaming plus model.

The Bulls don't have enough interest in a stand alone network (like the Lakers have). Even with the 2005 WS, the Sox didn't overtake the Cubs, and Marquee isn't such a great deal as a stand alone entity. The Cubs really had to fight to get on the major carriers, and they had much more leverage than the White Sox would, even if they won three straight World Series. 

In terms of cash flow, both teams rather maximize revenue to the television networks they own, and allocate as minimal rights fees to the teams to short change revenue sharing. The Cubs/Tribune Co. did that for decades on the television/radio end, giving the Cubs peanuts for their broadcast rights and keeping all the revenue corporate. The Sox/Bulls (and their stadium partner BlackHawks) aren't shifting away from this arrangement unless cable is completely dead.

All that said, the White Sox have consistently been around #11-14 MLB broadcast revenue the last 5-7 years, even with a crap product.  And they have enhanced incentives to drive up ratings because their advertising rates would finally go up quite considerably. Not to mention the value of the RSN itself skyrocketing in value. 

[caulfield12]

https://blogs.fangraphs.com/lets-update-the-estimated-local-tv-revenue-for-mlb-teams/

Here we are already at #3 in MLB with $120 million per year under the renegotiated 2018-19 five year arrangement. 

If they're not spending it on more than a mid tier payroll, where the heck is that inflowing revenue going, exactly? 

[South Side Hit Men]

15 minutes ago, caulfield12 said:

All that said, the White Sox have consistently been around #11-14 MLB broadcast revenue the last 5-7 years, even with a crap product.  And they have enhanced incentives to drive up ratings because their advertising rates would finally go up quite considerably. Not to mention the value of the RSN itself skyrocketing in value. 

The Cubs outdrew the Sox 2 to 1 last season, after the Sox increased their own ratings by 250% over 2019. Parity would be a pipe dream at this point.

Not sure what data Fangraphs has, but Forbes has the most accurate publicly available data. The Cubs massive revenue advantage (2019 data published in 2020) $471M to $285M was when they were both on NBC Sportsnetwork.

The one logical explanation for fangraphs revenue listing the White Sox with a higher local television network revenue than even the NY Yankees (which I don't believe anyone here believes) is the fact it includes the increased capital gains on their ownership after the Cubs left after 2019. Otherwise, that data is garbage. The White Sox with bottom half television viewer interest does not bring in more revenue than the YES Network.

4 minutes ago, caulfield12 said:

https://blogs.fangraphs.com/lets-update-the-estimated-local-tv-revenue-for-mlb-teams/

Here we are already at #3 in MLB with $120 million per year under the renegotiated 2018-19 five year arrangement. 

If they're not spending it on more than a mid tier payroll, where the heck is that inflowing revenue going, exactly? 

Have you seen the size of Reinsdorf's pockets?

[caulfield12]

42 minutes ago, South Side Hit Men said:

The Cubs outdrew the Sox 2 to 1 last season, after the Sox increased their own ratings by 250% over 2019. Parity would be a pipe dream at this point.

Not sure what data Fangraphs has, but Forbes has the most accurate publicly available data. The Cubs massive revenue advantage (2019 data published in 2020) $471M to $285M was when they were both on NBC Sportsnetwork.

The one logical explanation for fangraphs revenue listing the White Sox with a higher local television network revenue than even the NY Yankees (which I don't believe anyone here believes) is the fact it includes the increased capital gains on their ownership after the Cubs left after 2019. Otherwise, that data is garbage. The White Sox with bottom half television viewer interest does not bring in more revenue than the YES Network.

Have you seen the size of Reinsdorf's pockets?

But even with that huge ratings increase percentage~wise, we were still bottom 5-7 in MLB. There's huge room for improvement these next three seasons with the Cubs fading increasingly into irrelevance. Plus, you've lost that waiting a century for a World Series title factor... becoming more just like a typical corporate entity under Ricketts family ownership. 

Edited March 24, 2021 by caulfield12

[South Side Hit Men]

1 hour ago, caulfield12 said:

But even with that huge ratings increase percentage~wise, we were still bottom 5-7 in MLB. There's huge room for improvement these next three seasons with the Cubs fading increasingly into irrelevance. Plus, you've lost that waiting a century for a World Series title factor... becoming more just like a typical corporate entity under Ricketts family ownership. 

I'm not saying there isn't upside. I am saying the White Sox do not earn more local television revenue than the Yankees (beyond perhaps a one time windfall if fangraphs is correct), and unless the Reinsdorf family cells the team, they don't have a realistic avenue to break up their current deal, owning half of the current broadcast vehicle. They'll get their share of the broadcast, including increases, its just a matter of which Reinsdorf pocket it goes into.

I also agree with you some of it may trickle to payroll, though based on history, Jerry's increase in payroll spending is more correlated with ballpark revenue / increased attendance and season ticket sales. Both shall rise, at least short-term like the end of the 2000s, if the team is fortunate to win a WS title.

Edited March 24, 2021 by South Side Hit Men

[caulfield12]

8 hours ago, South Side Hit Men said:

The Cubs outdrew the Sox 2 to 1 last season, after the Sox increased their own ratings by 250% over 2019. Parity would be a pipe dream at this point.

Not sure what data Fangraphs has, but Forbes has the most accurate publicly available data. The Cubs massive revenue advantage (2019 data published in 2020) $471M to $285M was when they were both on NBC Sportsnetwork.

The one logical explanation for fangraphs revenue listing the White Sox with a higher local television network revenue than even the NY Yankees (which I don't believe anyone here believes) is the fact it includes the increased capital gains on their ownership after the Cubs left after 2019. Otherwise, that data is garbage. The White Sox with bottom half television viewer interest does not bring in more revenue than the YES Network.

Have you seen the size of Reinsdorf's pockets?

• While we don’t know the duration of the deal between Sinclair and the Cubs, for our purposes, I assumed that the reported average annual value of $132 million was again spread across 15 years, which fits a neat $2 billion total.
• While the White Sox figure is unknown, I took the $750,000 per game both the Cubs and White Sox received from NBC Sports Chicago in those clubs’ previous contract and prorated it over a full season for the White Sox. Without the Cubs, the network should have similar revenues given the lack of subscriber losses, and higher distributions to the three remaining clubs at NBC Sports Chicago.

Edited March 24, 2021 by caulfield12