XM Signs 11 year deal for MLB

So much for Sirius :(

i guess XM created a deal that blew Sirius of the water...
 
Baseball is a far different animal than the NFL.
First, it stretches over 26 weeks.
It has games often from early afternoon ET to late at night PT.
It is perfect for a satellite radio service, especially for people who spend long periods on the road.
It is not a just few hours a week on a Sunday (or Monday/Saturday night) like NASCAR or the NFL.
Baseball truly is a sport made for radio, and I disagree with Neutron: I think XM getting the MLB package is a major victory (and after Howard, a much-needed one) over Sirius.
 
The Wall Street Journal's take on the XM move:

XM Satellite Wins Baseball Deal Pact Valued at $650 Million
Raises Stakes In Battle With Sirius for Subscribers

By ANDY PASZTOR and STEFAN FATSIS
Staff Reporters of THE WALL STREET JOURNAL
October 20, 2004; Page B9

XM Satellite Radio Holdings Inc., raising the stakes in a rapidly escalating battle to lure subscribers, has signed a long-term broadcast deal with Major League Baseball costing $650 million over 11 years, according to industry officials.

The agreement seems designed to help XM regain public attention and marketing momentum against smaller rival Sirius Satellite Radio Inc., which this month signed a five-year, $500 million deal to add shock jock Howard Stern to its lineup starting in 2006. Sirius also has wide-ranging deals with several other major sports leagues.

The Sirius move to sign the popular Mr. Stern sent shock waves through the radio industry, and since then many investors and Wall Street analysts have been speculating that XM would opt for a high-profile response in a bid to grab back the spotlight. XM's bid for baseball was several times the amount Sirius offered, according to a person familiar with the details.

XM agreed to pay $470 million for eight years, and Major League Baseball has an option for three additional years for which XM would pay $60 million annually. XM and Major League Baseball declined to comment, though a news conference is slated for today.

With both satellite-radio concerns continuing to post losses and engaging in such brutal one-upsmanship, many on Wall Street have doubts about a big payback from the splashy programming deals.

XM, of Washington, has roughly 2.5 million subscribers, compared with about 700,000 for Sirius, and it has gained more traction with auto makers to install equipment at the factory. Until now, XM's main sports offerings have included auto racing and various college sports.

In addition to landing Mr. Stern, Sirius has signed deals for professional hockey, basketball and football games. This month, Sirius Chief Executive Joseph Clayton said the New York company also was "very interested in major-league baseball."

In aggressively outbidding its rival, XM may have made the same miscalculation it accused its rival of falling into less than a year ago. When Sirius announced its seven-year, roughly $220 million cash-and-stock deal with the National Football League amid much fanfare in December, an XM spokesman criticized the terms. "We felt the high expense didn't justify the return for our programming," XM said at the time. "The bottom line is this is a Hail Mary for them."

Now, Sirius officials are bound to point out with some glee that XM ended up paying twice as much to broadcast Major League Baseball. XM will need to attract large numbers of fans interested in hearing baseball games taking place outside their local markets, where every game already is broadcast on over-the-air radio.

One advantage: Teams such as the New York Yankees, Boston Red Sox and Los Angeles Dodgers have coast-to-coast fan bases. Also, the emergence of foreign stars such as Seattle Mariners outfielder Ichiro Suzuki of Japan will appeal to ethnic groups nationwide. However, industry officials say it could cost XM as much as $25,000 to transmit each game, a formidable number in baseball's 162-game season. It wasn't clear exactly how many games XM will carry under the deal.
 
From Today's Washington Post:

"....The games will appear on XM's standard service at no extra cost, said the source, who spoke on the condition of anonymity because the deal had yet to be publicly announced...."
 
Thats great about the no extra cost. :)

Now lets just hope that sound quality does not get affected when baseball is on.
 
The XM Press release:

XM SATELLITE RADIO TO BE THE OFFICIAL SATELLITE RADIO NETWORK OF MAJOR LEAGUE BASEBALL AND BEGIN BROADCASTS IN 2005

Washington D.C. , October 20, 2004 -- Major League Baseball and XM Satellite Radio [Nasdaq: XMSR] today announced an 11-year, $650 million agreement enabling XM to broadcast games of every Major League Baseball (MLB) team nationwide beginning with the 2005 regular season. XM, with more than 2.5 million subscribers nationwide, will be the official satellite radio network of MLB.

"This is the crown jewel - the deal that we've been waiting for," said Hugh Panero, CEO of XM Satellite Radio. "Major League Baseball is America's national pastime and a natural fit with XM, the national leader in satellite radio. MLB has the broadest appeal of any major sport. People of all ages are baseball fans, from children to grandparents. Baseball is also a sport ideally suited for radio, given its natural pace and the ability to vividly describe each play."

"This agreement between Major League Baseball and XM Satellite Radio is a significant step forward in providing baseball fans greater access to more games in more locations," said Baseball Commissioner Allan H. (Bud) Selig. "This is a wonderful opportunity for Major League Baseball given XM's ever-increasing national availability. Our fans will be able to listen to the local broadcasts of their favorite teams from anywhere in the country. This partnership will add to the continuing growth and popularity of our game. It is a further example of the renaissance that exists in baseball today."

As the official satellite radio network of Major League Baseball, XM will have rights to use the Major League Baseball silhouetted batter logo and the marks of the 30 MLB Clubs. XM also will develop specific programming content that showcases Major League Baseball, its teams, and its personalities.

XM to Create Major League Baseball Channel
In addition to broadcasting live games, XM will create a Major League Baseball radio channel featuring original content and classic Major League Baseball game broadcasts. As Major League Baseball enjoys strong support from its Hispanic fan base, XM also will broadcast select games in Spanish.

"Baseball has enormous appeal, not only to its millions of fans, but to automobile manufacturers as well, which will help further strengthen XM's leadership position in the automotive market," Panero concluded.
 
This deal is more valuable than the NFL to me because they have games every day vs. two days a week for the NFL (Sundays and Mondays).

Hmmm. I better draft some Cubs pitchers next year so I have another excuse to listen to all those day games.......
 
And they already have a backstop add anouncing this on tonight's baseball game, pretty quick to get the word out.
 
(A story on the potential fallout from the XM-MLB deal from Mediaweek.com)

XM Scores MLB After ESPN Gives Up Satellite Rights

By Katy Bachman, Mediaweek.com

XM Satellite Radio's $650 million, 11-year deal with Major League Baseball last week marked another turning point for satellite radio and more headaches for commercial broadcasters.

The deal, beginning in 2005, also upped the ante between XM and Sirius Satellite Radio, which are spending significant dollars to acquire premium content to attract new subscribers. Recently, Sirius, which has 700,000 subscribers to XM's 2.5 million, signed a five-year, $500 million deal to carry Howard Stern, beginning January 2006.

Commercial broadcasters, which pay between $5 million and $7 million a year for MLB local broadcast rights, felt cheated. Groups such as Infinity Broadcasting, which has the rights for eight major teams, and Clear Channel are already competing for listeners with MLB.com, which streams games on the Internet as well as TV broadcasts. Adding insult to injury, XM plans to pick up the local station feeds, including the local ads, until XM and MLB work out a revenue-sharing agreement to sell national advertising.

"Broadcasters paid a lot for exclusivity, and now they don't have it," said Mark Krieschen, vp and general manager of WGN-AM, Tribune's Talk station in Chicago which carries the Cubs. That will be the top issue at the upcoming MLB rights-holders meeting in two weeks. "Will some ask for relief? Will there be lawsuits? Maybe," said Krieschen.

ESPN Radio, which broadcasts games to 400 stations, isn't worried about its business. Last week, it signed a contract with MLB through 2010 and gave up its exclusive satellite rights for '05, allowing for the XM-MLB agreement.
 
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