The Brewers (and Twins) are getting hosed on television rights

[Brock Beauchamp]

One of our authors at Twins Daily posted this little nugget and... ick. Look at where the Brewers sit in average viewership and look at the money they're being paid for TV rights.

Then take a gander at the Angels.

[MVP2110]

2 minutes ago, Brock Beauchamp said:

One of our authors at Twins Daily posted this little nugget and... ick. Look at where the Brewers sit in average viewership and look at the money they're being paid for TV rights.

Then take a gander at the Angels.

That's wild to me. Guessing contracts were based on market size and potential. I'd venture to guess the Brewers can't squeeze much more out of their fan base, Angels probably could increase quite a bit if they actually became good 

[Brock Beauchamp]

5 minutes ago, MVP2110 said:

That's wild to me. Guessing contracts were based on market size and potential. I'd venture to guess the Brewers can't squeeze much more out of their fan base, Angels probably could increase quite a bit if they actually became good 

Oh, for sure. These contracts are signed based on market size and the pendulum will swing both ways on actual performance over a long period of time.

But I mean, come on, 33% less than the Marlins? That ain't right.

Also, LOL at the Rockies and their viewership. Yeesh, that franchise is a trash fire.

[torts]

1 hour ago, Brock Beauchamp said:

Oh, for sure. These contracts are signed based on market size and the pendulum will swing both ways on actual performance over a long period of time.

But I mean, come on, 33% less than the Marlins? That ain't right.

Also, LOL at the Rockies and their viewership. Yeesh, that franchise is a trash fire.

 

Miami's metro market is 5 times larger (6.5m) than Milwaukee (1.6m).  I mean, they're not even close.  I'm surprised it's not a bigger gap in money revenue 

[adambr2]

1 hour ago, MVP2110 said:

That's wild to me. Guessing contracts were based on market size and potential. I'd venture to guess the Brewers can't squeeze much more out of their fan base, Angels probably could increase quite a bit if they actually became good 

Story of the Angels, in a nutshell:

Universe: "Hey Angels, here's the two best baseball players in the universe!"

Angels: "Wow, thanks!"

Universe: "Now just become good!"

Angels: "No can do!"

[Jopal78]

8 hours ago, torts said:

 

Miami's metro market is 5 times larger (6.5m) than Milwaukee (1.6m).  I mean, they're not even close.  I'm surprised it's not a bigger gap in money revenue 

Correct, more click bait. It’s no different than putting up a billboard: there’s more potential eyeballs that can see the billboard in Los Angeles than Milwaukee so it costs more. 
 

Is the incomplete sharing of local  broadcast revenue detrimental to teams like the Brewers? Of course, but that isn’t news either, it’s been that way for 30 years. 

 

[Brock Beauchamp]

21 minutes ago, Jopal78 said:

Correct, more click bait. It’s no different than putting up a billboard: there’s more potential eyeballs that can see the billboard in Los Angeles than Milwaukee so it costs more. 
 

Is the incomplete sharing of local  broadcast revenue detrimental to teams like the Brewers? Of course, but that isn’t news either, it’s been that way for 30 years. 

 

How is this clickbait? Sheesh.

And potential eyeballs are only useful if they manifest into real eyeballs. Something that hasn’t happened in Miami at all in 20 years and even then, never coming close to maximizing their market size. 

[igor67]

Well the Brewers and Twins getting the short end of the stick also tracks with the, 'we'll keep broadcasting for those teams even though we are bankrupt because it is profitable'. What I would be very curious to know is the historical viewership numbers. I have a suspicion that both the Brewers and Twins fan bases to stay more likely to watch on TV anyway in down years compared to some of these other cities. So I can see a modest difference for a potentially larger market size but Brock your absolutely correct at some point if you aren't capitalizing on that market it don't matter for selling ads.

[Brock Beauchamp]

Going back to 2014, I found this:

Quote

-Miami baseball on Fox Sports Florida averaged 26,612 households over the course of 85 games, up from 20,912 at last year's All-Star break.

https://www.fishstripes.com/2014/7/18/5914013/miami-marlins-television-viewership-up-38-percent

Then from 2017, this headline:

Miami Marlins viewership and attendance plummeting

https://marlinmaniac.com/2017/07/18/miami-marlins-tv-attendance-plummeting/

And again from 2019, this headline:

Marlins ratings down 14 percent

https://www.sun-sentinel.com/sports/miami-marlins/fl-sp-marlins-tv-ratings-20191015-yso3tdwndzdkjbgdi5faym6ygm-story.html

So after all of that decline after decline after decline, the Marlins signed a $50m per year television contract deal in 2021.

[SeaBass]

I suppose that even though the viewership number is lower in some larger markets it doesn't mean that they make less money in ad revenue. They could conceivably still be able to charge more for their version of the Cenex commercials that they pump out ad nauseum during Brewers broadcasts just because of the market size and comparable ad prices in that area. Pure speculation.

[Brock Beauchamp]

5 minutes ago, SeaBass said:

I suppose that even though the viewership number is lower in some larger markets it doesn't mean that they make less money in ad revenue. They could conceivably still be able to charge more for their version of the Cenex commercials that they pump out ad nauseum during Brewers broadcasts just because of the market size and comparable ad prices in that area. Pure speculation.

I think it's probably tied to cable bundles. There are simply more cable subscribers in Miami and with the bundled packages, Bally then passes along much of that (undeserved) money to the Marlins, who no one is watching, has watched, or likely will watch.

Just another reason to hope the cable industry crashes and burns and income becomes more merit-based, I suppose.

[Jopal78]

1 hour ago, Brock Beauchamp said:

How is this clickbait? Sheesh.

And potential eyeballs are only useful if they manifest into real eyeballs. Something that hasn’t happened in Miami at all in 20 years and even then, never coming close to maximizing their market size. 

Yep, 100% click bait.

“They’re getting hosed on TV rights”  aims to exploit the "curiosity gap", providing just enough information to make readers click on the post only to learn it’s a worthless chart indicating broadcast rights cost more in larger media markets.
 

Like I said it’s no secret the Brewers are at a competitive disadvantage without complete sharing of local broadcast revenue, it’s been that way since the early 90s.

 

[Brock Beauchamp]

4 minutes ago, Jopal78 said:

Like I said it’s no secret the Brewers are at a competitive disadvantage without complete sharing of local broadcast revenue, it’s been that way since the early 90s.

It's no secret the Brewers are at a disadvantage but did you know they were so competitive with actual viewership of games? I didn't, which is what I found interesting about the chart. The fact they're barely trailing teams like the Twins while stomping on some much larger market teams was a surprise to me and useful information to know.

[Jopal78]

8 minutes ago, Brock Beauchamp said:

It's no secret the Brewers are at a disadvantage but did you know they were so competitive with actual viewership of games? I didn't, which is what I found interesting about the chart. The fact they're barely trailing teams like the Twins while stomping on some much larger market teams was a surprise to me and useful information to know.

Again not news. Winning baseball = more interest = more eyeballs on the games. If the Angels, Tigers etc. would have played good baseball in 2022 they’re numbers would blow the Brewers away.

Conversely, if you look at the Brewers in say 2003, 2004 there’s no way they had close to the viewership they had in 2022 (a year amidst quite possibly the greatest run of success in team history) 

[endaround]

35 minutes ago, Brock Beauchamp said:

I think it's probably tied to cable bundles. There are simply more cable subscribers in Miami and with the bundled packages, Bally then passes along much of that (undeserved) money to the Marlins, who no one is watching, has watched, or likely will watch.

Just another reason to hope the cable industry crashes and burns and income becomes more merit-based, I suppose.

Yep, this likely goes back to carriage fees and not ad revenue.  RSNs are one of the more costly channels to carry, likely $1 or more per subscriber.  So even if no one is watching everyone is paying.  Its why the move to streaming is more difficult than people think because those watching will now face the full cost without it being shared across everyone.

[BlazingGunz]

Maybe if Bally based their contracts based upon actual viewership rates - vs potential (population), they wouldn't be bankrupt.  MKE is getting hosed for sure....but those other teams hosed Bally...and now they are bankrupt

[Brock Beauchamp]

5 minutes ago, BlazingGunz said:

Maybe if Bally based their contracts based upon actual viewership rates - vs potential (population), they wouldn't be bankrupt.  MKE is getting hosed for sure....but those other teams hosed Bally...and now they are bankrupt

Yes and no. Those teams definitely hosed Fox/Bally but if Fox was still in control of the channels, I suspect bankruptcy - while possibly inevitable - wouldn't happen for several more years. Losing money on large contracts is only part of the reason Bally is declaring bankruptcy. Bigger factors were that they purchased just before the pandemic, then the pandemic slammed everything in society, and the resulting re-emergence has caused interest rates to fly upwards while inflation is eating the other end of their financials.

Why did this hurt Bally so much? They took out a massive pile of loans to make this purchase and now they're getting slammed under loan payments they cannot hope claw out of given the circumstances.

But the longer-running problem - and one that predates the Bally sale - is that RSNs bought hook, line, and sinker into the cable package, which everyone with a lick of sanity saw was going to go into a tailspin as far back as ten years ago. And instead of finding a way to weather these bad contracts, they kept jacking up cable package prices, which caused cable streaming - RSNs only real hope of surviving in the here and now - to tell Bally to go pound sand. It's how we ended up with DirecTV being the only streaming service that offers Bally channels (until this year, now Fubo does as well). And DirecTV Stream, to describe it in single word, sucks. It's an awful service.

So many bad decisions, any one of which could have prevented this situation from escalating so quickly and in such a damaging way.

[jerichoholicninja]

Wouldn't the available advertising dollars in a market be the biggest driver in how much teams get for the broadcast rights? David Gruber likely couldn't even afford to advertise in most markets instead of twice every half inning like in Milwaukee.

[Brock Beauchamp]

54 minutes ago, jerichoholicninja said:

Wouldn't the available advertising dollars in a market be the biggest driver in how much teams get for the broadcast rights? David Gruber likely couldn't even afford to advertise in most markets instead of twice every half inning like in Milwaukee.

I'm sure that has some impact - general cost of living and doing business varies between locales - but in my experience, most of advertising is priced on reach. And the Brewers' reach is greater than many other teams given their viewership numbers.

[jerichoholicninja]

43 minutes ago, Brock Beauchamp said:

I'm sure that has some impact - general cost of living and doing business varies between locales - but in my experience, most of advertising is priced on reach. And the Brewers' reach is greater than many other teams given their viewership numbers.

How much of the Brewer's audience is within any sort of reasonable distance of Milwaukee? Same with the Twins. Obviously Milwaukee is the largest population center and Madison isn't too far away but most everything else is quite far away. Is it really worth it for a Milwaukee located business to advertise to someone living in the Fox Cities or Wausau? I think a lot of what hurts the Brewers (and Bucks) financially is that they are tucked away in the corner of the state a long ways away from a good chunk of their fans who likely rarely or never even make a trip to see the team in person because of the distance.

[owbc]

I wonder how the demographics of the Brewers’ broadcasts compare to other MLB teams. There doesn’t seem to be much demand to advertise on their broadcasts despite the healthy ratings. 

[truesch]

With the bankruptcy issues at Bally’s, it’s not going to get any better.  How much longer before MLB steps in a tries to create their own subsidiary of networks and even out the money?  I know the teams that own their own networks would balk, but for the health of the sport, one would think this high tide would raise all boats?

[Sixtolezcano]

23 hours ago, truesch said:

With the bankruptcy issues at Bally’s, it’s not going to get any better.  How much longer before MLB steps in a tries to create their own subsidiary of networks and even out the money?  I know the teams that own their own networks would balk, but for the health of the sport, one would think this high tide would raise all boats?

There is too much greed and the large market owners wouldn’t even share $1.00 with any other team if they could get away with it.  What is the average length of time that any owner keeps a team? If I were to guess 30-40 years at the most, just about the length from the time of purchase to when they lose interest or the cap. gains tax will kill them when they pass ownership to their families. I really don’t see the owners doing anything about sharing tv revenue or to make the haves an have nots have closer revenue because most owners don’t really think there is a problem.

[nate82]

I completely disagree that the Brewers are getting completely hosed on their TV rights.  Maybe a few million more but definitely not hosed that would be the Mets and Astros who are getting hosed.  With the numbers it is about $770 per viewer which sounds about right where the Brewers should be after taking the market into account. 

[MrTPlush]

On 3/24/2023 at 7:28 AM, Brock Beauchamp said:

I think it's probably tied to cable bundles. There are simply more cable subscribers in Miami and with the bundled packages, Bally then passes along much of that (undeserved) money to the Marlins, who no one is watching, has watched, or likely will watch.

Just another reason to hope the cable industry crashes and burns and income becomes more merit-based, I suppose.

This and also what Seabass said. 
 

The ad money available in LA is a taaaaad different. Also David Gruber has like 50% of the ad spots because no one else even wants to advertise during Brewers games. Endless companies to advertise in LA. We have Gruber and Pizza Ranch.