Interesting Find - Reds Cable TV Deal Well Below Normal

[MikeS21]

This is week old article, but it says much about the financial condition of the Reds.

http://cincinnati.com/blogs/reds/201...yssey=obinsite

The Reds’ deal doesn’t even pay that. It’s believed to be worth $10 million a year and believed to run through 2016. The club won’t comment on it.

But if the Reds are going to have the money to be competitive, they’re going to have to get a better cable deal at some point.

Think about it: $75 million per year just for payroll for one year. And that is not counting ANY income from attendance and/or concessions - which is 90% of the Reds' income. And the Angels can almost double the Reds' payroll without adding income from ticket sales and concessions.

This why we don't see too many high priced FA or players in Cincinnati.

[RBA]

I think the Padres deal starts off at $40 million a year and goes higher over the years. Rumor is the new owners will be using the new TV contract to help pay for the team, not on payroll.

But it is sad the Reds are only getting $10 million until 2016.

[camisadelgolf]

Uninteresting Loss - Dodgers Betamax VCR Disagreed Less Above As Always

[Brutus]

This is week old article, but it says much about the financial condition of the Reds.

http://cincinnati.com/blogs/reds/201...yssey=obinsite



Think about it: $75 million per year just for payroll for one year. And that is not counting ANY income from attendance and/or concessions - which is 90% of the Reds' income. And the Angels can almost double the Reds' payroll without adding income from ticket sales and concessions.

This why we don't see too many high priced FA or players in Cincinnati.

Fortunately, revenue sharing cuts down on that gap somewhat. Further, with the way MLB Properties are trending, much more of the media revenue will be centralized in 10 years, meaning teams will be making far more revenue from the centrally-distributed MLB Fund than they will from their local sources. This means the financial disparity in baseball will be a lot less pronounced.

[membengal]

However revenue sharing might help staunch the bleeding, the fact remains that is an abomination of a cable deal, and it is cuffing this team's ability to, say, retain a player like Votto.

[Tony Cloninger]

Who was responsible for creating such an abomination? Did they have the Reds over a barrel when the deal was being made?

[mth123]

IIRC, when the Reds signed this deal, it was a significant increase over what they'd been getting previously.

[MartyFan]

For the Reds to get a major upgrade in revenue from cable they would have to OWN Ohio, Indiana, Kentucky, Tennessee and West Virginia in a HUGE WAY. There is not enough add dollars spent on a Cincy/Tri-State area to get a significant cable deal done.

The Reds have in recent history been an incredibly lazy organization when it comes to their media situation. In the 90's there was talk that Clear Channel was going to buy the team or at least a big minority chunk of the team and create a Reds Centered Sports Network, obviously that never came to pass but it would have been a step in the right direction and the Reds would have been one of the first in the race instead of one of the last.

The Reds are not in a media savvy market, none of the markets they impact are media leaders in quality or innovation.

The Reds as a team are still a wannabe organization who even though they've made some strides recently are still living off of memories of 30+ years ago and BRM. For the Reds to improve their media situation they need to appreciate nostalgia but do something NOW.

If the Reds lock up Votto and Bruce and Stubbs come into their own as exciting players over the next 5 years then I'd say the ball starts rolling. To me, the most value BPhillps presents is as a marketing piece and if the Reds resign him, maybe his check should be setup that way? He gets social Media, connecting with the fans and as far as I know, he is one of the leading players who get this and correct me if I am wrong, he is one of only a few Reds players who are active in their efforts that the average Reds fan cares about. I know other guys have twitter accounts and so on but most of them are fairly boring...BPhillips is an event and while I do not favor resigning him if the team will be killed by his contract, I would say he is more valuable than any other player the team has had over the last decade for what he does OFF the field...those guys don't grow on trees and I am afraid this organization does not "GET IT" when it comes to how the media is changing and what media is.

OK...I love baseball, I love media and would love to work with the Reds on implementing a new media strategy to reach fans that would help them improve their brand and fan interaction.

[757690]

The San Diego TV market is probably close to 4 times bigger than the Cincinnati market, as there a lot of Dodger and Angel fans that follow the Padres as well. They don't root for them, but they watch the games.

This disparity in the deals seems about right. The big problem is the Dodgers, Yankees, Red Sox, Phillies, etc who get close to $100M or more from their TV deals.

[Chip R]

I would think that in order to get a better cable deal, there would have to be competition from other networks. We know that free TV is a non-starter. Most teams are going away from free TV. Besides FSO, what other network would carry the Reds? People talk of the Reds creating their own network but I think that would be tougher - and more expensive - than it seems. At contract time, FSO can just give the Reds a figure and tell them, "take it or leave it" and the Reds have to take it. It's basic supply and demand.

One of the other problems is that there is not a huge demand for Reds games. The Reds have never been a great draw. Every team in our division - with the exception of Pittsburgh - has drawn over 3M people to their games several times over. St. Louis and Milwaukee are similar sized markets. Now, if the ballpark was sold out every night and the only option people had to watch the Reds was cable, then perhaps the Reds could get more TV money.

[Brutus]

The San Diego TV market is probably close to 4 times bigger than the Cincinnati market, as there a lot of Dodger and Angel fans that follow the Padres as well. They don't root for them, but they watch the games.

This disparity in the deals seems about right. The big problem is the Dodgers, Yankees, Red Sox, Phillies, etc who get close to $100M or more from their TV deals.

It's actually not that large a discrepancy. According to Nielsen, San Diego DMA is about 1.4 million homes and Cincinnati is about 900k.

Now, to be fair, regional sports networks often encompass a much larger geographical region than just their home DMA, so obviously San Diego would benefit from a larger target audience than just their DMA. But in terms of actual market, it's not all that much larger than Cincinnati.

[bucksfan2]

It's actually not that large a discrepancy. According to Nielsen, San Diego DMA is about 1.4 million homes and Cincinnati is about 900k.

Now, to be fair, regional sports networks often encompass a much larger geographical region than just their home DMA, so obviously San Diego would benefit from a larger target audience than just their DMA. But in terms of actual market, it's not all that much larger than Cincinnati.

When you take into consideration the Reds entire market it isn't all that small. The Cincinnati market may be one of the smallest in baseball, but the TV market would stretch to Columbus, Dayton, Indy, Louisville, and Lexington. They aren't massive TV markets, but they are pretty big none the less when added all together. Granted there may be competition in some of those markets, Columbus with the Indians, but the Reds TV broadcast will be shown in those markets.

[dougdirt]

When you take into consideration the Reds entire market it isn't all that small. The Cincinnati market may be one of the smallest in baseball, but the TV market would stretch to Columbus, Dayton, Indy, Louisville, and Lexington. They aren't massive TV markets, but they are pretty big none the less when added all together. Granted there may be competition in some of those markets, Columbus with the Indians, but the Reds TV broadcast will be shown in those markets.

At the same time, just about every city also extends beyond that city to include other places as well.

[BrooklynRedz]

For the Reds to get a major upgrade in revenue from cable they would have to OWN Ohio, Indiana, Kentucky, Tennessee and West Virginia in a HUGE WAY. There is not enough add dollars spent on a Cincy/Tri-State area to get a significant cable deal done.

The Reds have in recent history been an incredibly lazy organization when it comes to their media situation. In the 90's there was talk that Clear Channel was going to buy the team or at least a big minority chunk of the team and create a Reds Centered Sports Network, obviously that never came to pass but it would have been a step in the right direction and the Reds would have been one of the first in the race instead of one of the last.

The Reds are not in a media savvy market, none of the markets they impact are media leaders in quality or innovation.

The Reds as a team are still a wannabe organization who even though they've made some strides recently are still living off of memories of 30+ years ago and BRM. For the Reds to improve their media situation they need to appreciate nostalgia but do something NOW.

If the Reds lock up Votto and Bruce and Stubbs come into their own as exciting players over the next 5 years then I'd say the ball starts rolling. To me, the most value BPhillps presents is as a marketing piece and if the Reds resign him, maybe his check should be setup that way? He gets social Media, connecting with the fans and as far as I know, he is one of the leading players who get this and correct me if I am wrong, he is one of only a few Reds players who are active in their efforts that the average Reds fan cares about. I know other guys have twitter accounts and so on but most of them are fairly boring...BPhillips is an event and while I do not favor resigning him if the team will be killed by his contract, I would say he is more valuable than any other player the team has had over the last decade for what he does OFF the field...those guys don't grow on trees and I am afraid this organization does not "GET IT" when it comes to how the media is changing and what media is.

OK...I love baseball, I love media and would love to work with the Reds on implementing a new media strategy to reach fans that would help them improve their brand and fan interaction.

The Reds have been in the top 5 avg rating among the 30 clubs for the past two years (per Sports Business Journal):

TEAM	RSN	2011 RATING (CHANGE^)
Philadelphia	CSN	9.12 (+10.5%)
St. Louis	FS Midwest	9.00 (-4.5%)
Milwaukee	FS Wisconsin	7.95 (+59.0%)
Boston	NESN	7.80 (+31.1%)
Cincinnati	FS Ohio	7.44 (-0.5%)

I see this stated as fact that the Reds 'don't get it' with respect to media but I never see any real examples and the results (improved attendance and broadcast ratings) would suggest the exact opposite. Or maybe I'm misunderstanding your point and if that's the case, I apologize.

The return on the current TV deal is not troubling. Without knowing the contract details, and specifically the exclusive negotiation window, I'd imagine the club will be fairly aggressive in the next couple of years working to renegotiate given the increased attention on the club and their performance on the field.

[757690]

At the same time, just about every city also extends beyond that city to include other places as well.

Exactly, and the Padres market is just a few hours away from the 10 million people market of LA. That dwarfs most other team's expanded market.