When the Mets signed Pedro Martínez a year ago, it was easy to declare that his arrival, followed by the addition of Carlos Beltran, were moves that anticipated the 2006 spring debut of the team's new cable network and, if they should play so long, the eventual opening of a new ballpark.
The signings showed good near-term planning (few could have anticipated Beltran's miserable debut) for the Mets, who had a season left on their contract with the MSG Network and Fox Sports New York, then paid $54 million to secure an early release from it.
A year later, the Mets have added Carlos Delgado and Billy Wagner and $91 million in future payments to their payroll. Delgado and Wagner will earn nearly $25 million in 2006, salaries that just about equal what the Mets will save by shedding their obligations to Mike Piazza, Mike Cameron and Braden Looper. The Mets began the 2005 season with a $104 million payroll, third highest in the majors.
Clearly, the wallet of Fred Wilpon, the principal owner, is open as never before, especially with General Manager Omar Minaya planning potential withdrawals to satisfy Manny Ramirez or a catcher like Bengie Molina.
So, is SportsNet New York, the network the Mets have created with Time Warner and Comcast, bankrolling all this?
Not really - and not yet. The only evidence of the network's role in the Wagner deal appeared on the electronic zipper sign outside its Midtown Manhattan studio when he was in town. It read, "New York Loves Billy Wagner."
There are numerous steps for the new network to overcome before cash, or profits, begin to flow.
First, it has to start operating - spring-training games don't start until mid-March - to get advertising and subscriber revenue.
Then, it must secure full distribution across the metropolitan area. It is currently guaranteed only 3.4 million subscribers from Time Warner and Comcast; it lacks a Cablevision deal (for three million more subscribers) or one with either satellite operator, DirecTV or DISH.
The absence of a Cablevision deal throughout 2002 hindered the YES Network's ability to sell advertising because about 40 percent of the local market could not see Yankees games. YES posted a loss that year.
If distribution falls into place by opening day, the network will still be highly reliant on the Mets' success, even if network officials insist it will be about far more than the Mets. SportsNet New York will, in fact, start with a large fixed cost: paying the Mets a yearly rights fee that figures to be at least $50 million.
The Mets are not the Yankees by any measure. Last year, the Mets' combined rating on MSG and FSNY was a slender 1.5, a third of the Yankees' rating on YES. The Mets won 12 more games than they did in 2004, but inconsistency and a dispute that kept the Mets off Time Warner's systems for 63 days pushed their cable rating down by 21 percent.
So the Mets' venture into network building is not a short-term financial slam dunk. The network will not, at least for a while, be the National Bank of Fred from which the Mets, willy-nilly, can extract eight-figure sums. But if such cash becomes available to the Mets through their 67 percent stake in the network, they are not restricted from using it by Major League Baseball.
If Minaya's moves pay off, attendance will rise, ratings will jump and advertising on the network will go up. If they don't click, the network's ledger will look less robust, and the network will be less able to buttress the Mets' bottom line - whether to help pay for salaries or for new stadium debt payments.
It would also be possible for the Mets to pluck money out of the network by borrowing against its cash flow. The YES partners have borrowed several hundred million dollars and use cash flow to repay the debt.
The crucial aspect in all this is that creating a regional sports network like SportsNet New York gives Wilpon more incentive to spend intelligently on players because he will be building a potentially valuable new asset. In the past, whatever the success of Wilpon's spending (as the principal owner and in the past with Nelson Doubleday), the salaries that were paid to star players did not provide the underpinnings of a major asset, or of a consistent winner.
Imagine if the Mets had had a network several years ago; Mo Vaughn could have been host of a cooking show in his substantial down time.
With four months before the network starts up, it is still looking to sign analysts to join the play-by-play man Gary Cohen. Keith Hernandez, David Cone and Al Leiter are candidates, as is Ron Darling, who called Washington Nationals games last season. Of the four, Leiter has shown in his postseason stints on Fox that he is the best, but he must decide if he will keep pitching. Ralph Kiner is likely to play a role, and so is Tom Seaver.
http://www.nytimes.com/2005/11/30/sports/baseball/30sandomir.html?oref=login
The signings showed good near-term planning (few could have anticipated Beltran's miserable debut) for the Mets, who had a season left on their contract with the MSG Network and Fox Sports New York, then paid $54 million to secure an early release from it.
A year later, the Mets have added Carlos Delgado and Billy Wagner and $91 million in future payments to their payroll. Delgado and Wagner will earn nearly $25 million in 2006, salaries that just about equal what the Mets will save by shedding their obligations to Mike Piazza, Mike Cameron and Braden Looper. The Mets began the 2005 season with a $104 million payroll, third highest in the majors.
Clearly, the wallet of Fred Wilpon, the principal owner, is open as never before, especially with General Manager Omar Minaya planning potential withdrawals to satisfy Manny Ramirez or a catcher like Bengie Molina.
So, is SportsNet New York, the network the Mets have created with Time Warner and Comcast, bankrolling all this?
Not really - and not yet. The only evidence of the network's role in the Wagner deal appeared on the electronic zipper sign outside its Midtown Manhattan studio when he was in town. It read, "New York Loves Billy Wagner."
There are numerous steps for the new network to overcome before cash, or profits, begin to flow.
First, it has to start operating - spring-training games don't start until mid-March - to get advertising and subscriber revenue.
Then, it must secure full distribution across the metropolitan area. It is currently guaranteed only 3.4 million subscribers from Time Warner and Comcast; it lacks a Cablevision deal (for three million more subscribers) or one with either satellite operator, DirecTV or DISH.
The absence of a Cablevision deal throughout 2002 hindered the YES Network's ability to sell advertising because about 40 percent of the local market could not see Yankees games. YES posted a loss that year.
If distribution falls into place by opening day, the network will still be highly reliant on the Mets' success, even if network officials insist it will be about far more than the Mets. SportsNet New York will, in fact, start with a large fixed cost: paying the Mets a yearly rights fee that figures to be at least $50 million.
The Mets are not the Yankees by any measure. Last year, the Mets' combined rating on MSG and FSNY was a slender 1.5, a third of the Yankees' rating on YES. The Mets won 12 more games than they did in 2004, but inconsistency and a dispute that kept the Mets off Time Warner's systems for 63 days pushed their cable rating down by 21 percent.
So the Mets' venture into network building is not a short-term financial slam dunk. The network will not, at least for a while, be the National Bank of Fred from which the Mets, willy-nilly, can extract eight-figure sums. But if such cash becomes available to the Mets through their 67 percent stake in the network, they are not restricted from using it by Major League Baseball.
If Minaya's moves pay off, attendance will rise, ratings will jump and advertising on the network will go up. If they don't click, the network's ledger will look less robust, and the network will be less able to buttress the Mets' bottom line - whether to help pay for salaries or for new stadium debt payments.
It would also be possible for the Mets to pluck money out of the network by borrowing against its cash flow. The YES partners have borrowed several hundred million dollars and use cash flow to repay the debt.
The crucial aspect in all this is that creating a regional sports network like SportsNet New York gives Wilpon more incentive to spend intelligently on players because he will be building a potentially valuable new asset. In the past, whatever the success of Wilpon's spending (as the principal owner and in the past with Nelson Doubleday), the salaries that were paid to star players did not provide the underpinnings of a major asset, or of a consistent winner.
Imagine if the Mets had had a network several years ago; Mo Vaughn could have been host of a cooking show in his substantial down time.
With four months before the network starts up, it is still looking to sign analysts to join the play-by-play man Gary Cohen. Keith Hernandez, David Cone and Al Leiter are candidates, as is Ron Darling, who called Washington Nationals games last season. Of the four, Leiter has shown in his postseason stints on Fox that he is the best, but he must decide if he will keep pitching. Ralph Kiner is likely to play a role, and so is Tom Seaver.
http://www.nytimes.com/2005/11/30/sports/baseball/30sandomir.html?oref=login
