CLEVELAND - Some say working in television is a competitive sport, but that doesn't necessarily mean professional sports teams will find success in broadcasting.
The Cleveland Indians have become the latest in a line of about 30 professional teams to take a crack at running a regional network, announcing a deal last week with cable company Time Warner Inc. The New York Mets and Jets plans to launch SportsNet New York this year.
The Indians' goal is to earn more revenue and control programming much like the New York Yankees' YES Network and the Boston Red Sox's New England Sports Network, which have done well.
But those markets are much larger and richer than Cleveland, one of the nation's poorest cities, and have teams whose appeal goes beyond borders - keys, experts say, to sports teams hitting home runs in the TV business.
While teams in New York, Boston, Chicago and California have recorded victories, others have failed for various reasons: the NBA's Portland Trail Blazers, Charlotte Bobcats and Houston Rockets are a few. Planned networks for the Kansas City Royals, Houston Astros and Minnesota Twins never came to be.
"Teams are realizing that it's not their business to be in broadcasting," said Paul Swangard, director of the University of Oregon's Warsaw Sports Management Center. He said clubs are often unable to absorb millions in upfront costs of building production and other staff, starting studios and buying expensive equipment.
And there's a question of whether viewers will tune in for all one team, all the time.
"With all due respect to the Indians, I'm not sure there's an insatiable appetite for Indians programming and nothing else," he said.
Indians President Paul Dolan, whose uncle is Cablevision chief executive Charles Dolan, believes the club will build Fastball Sports Productions into a revenue-producing, 24-hour sports network that feeds die-hard fans' appetite for Cleveland games and, eventually, other sports programs. Initially, only games and some pre- and post-game programs will air.
"There is risk we won't generate the revenue we think we will, but that risk should be in the first few years. We're always thinking long term," Dolan said last week.
Sterling Entertainment Enterprises, owner of the Mets, will launch SportsNet New York in April with Comcast Corp. and Time Warner. Besides baseball, the network will air more than 230 hours of Jets-related content, including in-season and offseason programming with access to players, coaches and management.
The network says it will reach 8 million people in the New York area and believes there is a desire for team-specific programming.
"Every day is gameday. There's a lot that goes on 12 months of the year because of the way the NFL is structured; hope springs eternal every spring. We believe we have a tremendous opportunity to fill a demand Jets fans have," said network president Jon Litner in a statement.
The Cleveland deal includes 130 regular-season games and eight spring training games to be aired on cable and satellite systems. An additional 20 regular-season games will be shown on Cleveland station WKYC, returning the Indians to free TV for the first time since 2001.
The Indians, who finished second in the AL Central last season with their $42 million payroll, hope the network will help its payroll exceed $60 million in 2006.
The club has been shopping for a new television contract since its deal with Fox Sports Net Ohio expired after last season, when the Indians made $17 million by selling broadcast rights to FSN.
For years, teams have sold rights to broadcast their games to cable networks such as FSN and broadcast channels for millions of dollars. Besides guaranteed revenue and a locked-in number of cable subscribers with access to games, teams also get the benefit of television expertise. The networks produce, edit and air programming and handle negotiating with cable companies to work out distribution and technical details, among other things.
The rights-holders make money by selling advertising, boosting ratings and being able to market themselves as "the home of fill-in-the team."
The Houston Astros ultimately decided it was better economically not to create a network, given the investment, time and work required.
"You have to consider where you are financially, where you are compared to other teams, where you are with your current TV package, what your initial investment is and when your payback comes - those are all things to consider," said Pam Gardner, the Astros' president of business operations.
As teams scramble to boost payrolls and rake in more revenue, more are taking a shot at television and other growing technology such as the Internet, satellite radio and producing content for new telephone video services, said Lee Berke, president of LBH Sports, Entertainment & Media Inc. in Scarsdale, N.Y.
"It's not that every team will do their own network. There are reasons why some will and some won't, but every team is going to seriously explore it because of all the upside, all the return," Berke said.
Berke has helped teams build networks, including the YES Network created in 2002. The network is now worth an estimated $1.1 billion.
He said the teams that have failed had a variety of problems, including running into legal roadblocks, negotiating cable fees that were too high or misfiring when it came to deciding how their networks would be distributed to customers.
"The Portland Trail Blazers didn't have all the games on the network, and exclusivity is a key part. You want to say the only way you can see our games for the most part is on this network," Berke said.
The Indians deal includes arrangements to show games on satellite as well as its own network, which cable industry analyst John Mansell said is important because it allows the team to reach more eyeballs, which translates into higher advertising revenue.
Mansell, of Monterey, Calif.-based, Kagan Research, said big networks such as Fox are at risk of losing ad revenue and some ratings as more teams bolt.
But he said he believes most teams, particularly in smaller markets, will continue to rely on the FSNs of the world in some way, especially because those networks already reach millions of viewers through already established agreements with the nation's major cable companies.
"It's the cable operator that has most of the cards," Mansell said.
Randy Freer, chief operating officer of Fox Sports, which operates FSN Ohio, said the company wanted to extend its relationship with the Indians but understands why it and other teams are trying to broadcast on their own.
"There's only so many tickets that you can sell and there's only so much that you can do" to make money, he said. "There's pressure on all sides of it and eventually they get to the television side of it."
http://www.timesleader.com/mld/timesleader/business/13570023.htm
The Cleveland Indians have become the latest in a line of about 30 professional teams to take a crack at running a regional network, announcing a deal last week with cable company Time Warner Inc. The New York Mets and Jets plans to launch SportsNet New York this year.
The Indians' goal is to earn more revenue and control programming much like the New York Yankees' YES Network and the Boston Red Sox's New England Sports Network, which have done well.
But those markets are much larger and richer than Cleveland, one of the nation's poorest cities, and have teams whose appeal goes beyond borders - keys, experts say, to sports teams hitting home runs in the TV business.
While teams in New York, Boston, Chicago and California have recorded victories, others have failed for various reasons: the NBA's Portland Trail Blazers, Charlotte Bobcats and Houston Rockets are a few. Planned networks for the Kansas City Royals, Houston Astros and Minnesota Twins never came to be.
"Teams are realizing that it's not their business to be in broadcasting," said Paul Swangard, director of the University of Oregon's Warsaw Sports Management Center. He said clubs are often unable to absorb millions in upfront costs of building production and other staff, starting studios and buying expensive equipment.
And there's a question of whether viewers will tune in for all one team, all the time.
"With all due respect to the Indians, I'm not sure there's an insatiable appetite for Indians programming and nothing else," he said.
Indians President Paul Dolan, whose uncle is Cablevision chief executive Charles Dolan, believes the club will build Fastball Sports Productions into a revenue-producing, 24-hour sports network that feeds die-hard fans' appetite for Cleveland games and, eventually, other sports programs. Initially, only games and some pre- and post-game programs will air.
"There is risk we won't generate the revenue we think we will, but that risk should be in the first few years. We're always thinking long term," Dolan said last week.
Sterling Entertainment Enterprises, owner of the Mets, will launch SportsNet New York in April with Comcast Corp. and Time Warner. Besides baseball, the network will air more than 230 hours of Jets-related content, including in-season and offseason programming with access to players, coaches and management.
The network says it will reach 8 million people in the New York area and believes there is a desire for team-specific programming.
"Every day is gameday. There's a lot that goes on 12 months of the year because of the way the NFL is structured; hope springs eternal every spring. We believe we have a tremendous opportunity to fill a demand Jets fans have," said network president Jon Litner in a statement.
The Cleveland deal includes 130 regular-season games and eight spring training games to be aired on cable and satellite systems. An additional 20 regular-season games will be shown on Cleveland station WKYC, returning the Indians to free TV for the first time since 2001.
The Indians, who finished second in the AL Central last season with their $42 million payroll, hope the network will help its payroll exceed $60 million in 2006.
The club has been shopping for a new television contract since its deal with Fox Sports Net Ohio expired after last season, when the Indians made $17 million by selling broadcast rights to FSN.
For years, teams have sold rights to broadcast their games to cable networks such as FSN and broadcast channels for millions of dollars. Besides guaranteed revenue and a locked-in number of cable subscribers with access to games, teams also get the benefit of television expertise. The networks produce, edit and air programming and handle negotiating with cable companies to work out distribution and technical details, among other things.
The rights-holders make money by selling advertising, boosting ratings and being able to market themselves as "the home of fill-in-the team."
The Houston Astros ultimately decided it was better economically not to create a network, given the investment, time and work required.
"You have to consider where you are financially, where you are compared to other teams, where you are with your current TV package, what your initial investment is and when your payback comes - those are all things to consider," said Pam Gardner, the Astros' president of business operations.
As teams scramble to boost payrolls and rake in more revenue, more are taking a shot at television and other growing technology such as the Internet, satellite radio and producing content for new telephone video services, said Lee Berke, president of LBH Sports, Entertainment & Media Inc. in Scarsdale, N.Y.
"It's not that every team will do their own network. There are reasons why some will and some won't, but every team is going to seriously explore it because of all the upside, all the return," Berke said.
Berke has helped teams build networks, including the YES Network created in 2002. The network is now worth an estimated $1.1 billion.
He said the teams that have failed had a variety of problems, including running into legal roadblocks, negotiating cable fees that were too high or misfiring when it came to deciding how their networks would be distributed to customers.
"The Portland Trail Blazers didn't have all the games on the network, and exclusivity is a key part. You want to say the only way you can see our games for the most part is on this network," Berke said.
The Indians deal includes arrangements to show games on satellite as well as its own network, which cable industry analyst John Mansell said is important because it allows the team to reach more eyeballs, which translates into higher advertising revenue.
Mansell, of Monterey, Calif.-based, Kagan Research, said big networks such as Fox are at risk of losing ad revenue and some ratings as more teams bolt.
But he said he believes most teams, particularly in smaller markets, will continue to rely on the FSNs of the world in some way, especially because those networks already reach millions of viewers through already established agreements with the nation's major cable companies.
"It's the cable operator that has most of the cards," Mansell said.
Randy Freer, chief operating officer of Fox Sports, which operates FSN Ohio, said the company wanted to extend its relationship with the Indians but understands why it and other teams are trying to broadcast on their own.
"There's only so many tickets that you can sell and there's only so much that you can do" to make money, he said. "There's pressure on all sides of it and eventually they get to the television side of it."
http://www.timesleader.com/mld/timesleader/business/13570023.htm
