There are at least 54,005 A's fans in the Bay Area, as evidenced by last night's Wild Card game (of which we shall not speak).
The Coliseum was loud and full. It comes against the backdrop of baseball continuing to suffer league wide attendance declines, as chronicled in a recent New York Times article. The A's were actually up year-over-year with an average of 20,521 fans a game in 2019 versus 19,427 a game in 2018.
One can be skeptical of A's President Dave Kaval's ultimate "rooting" in Oakland (as I am), but it is undeniable that the ballpark is much improved from a fan standpoint in the last five or so years. A's Access, The Treehouse, Championship Plaza, all easy, feel-good moves that make fans feel valued and that they are getting value.
But, as the Times piece points out, butts in the seats may not be worth as much as it is generally assumed.
...league revenue, which topped $10 billion in 2018, is up more than 70 percent from a decade ago, thanks in large part to increasing media rights fees, which reached an all-time high this year.
Those diverging trend lines — fewer fans in the ballpark, but richer media fees and overall revenues — make up an uncomfortable truth about baseball in the 21st century. Ticket sales, long the bread and butter for the sport, are no longer the central driver of the business at a time when the sport’s digital business is ascendant....
Meanwhile, fees from baseball media rights are growing at a much faster rate. That explains how revenue can soar while attendance plummets. Baseball’s new television agreement with Fox included a 39 percent increase over the previous deal.
Also, numerous teams, including the Los Angeles Dodgers, Texas Rangers, Los Angeles Angels, Seattle Mariners and Philadelphia Phillies, have signed long-term, multibillion-dollar deals with regional sports networks in recent years. The Tampa Bay Rays recently signed a new television deal that reportedly quadrupled their average payment.
“You can’t raise the prices of tickets, whether they be suites or regular tickets, anywhere near the value that the media rights are increasing,” [Todd Lindenbaum, chief executive of SuiteHop, an Airbnb-type service for luxury suites] said.
Rays Deal as Harbinger
Lamentable as it may be to old-school baseball purists, but terrestrial radio rights are not very valuable. This is why the A's are partnered with right-wing-low-wattage radio KTRB as their "flagship," but really primarily with the streaming service TuneIn.
As, in my opinion, regrettable it is to have radio bedfellows like Rush Limbaugh on KTRB, the TuneIn channel is excellent and is an ocean of A's content for a fanbase that had been regularly deprived.
Still, when it comes to money, TV is still the name of the game.
The Times excerpt above notes that the similarity "small market" Rays "reportedly quadrupled" their average TV rights payment. A quick Google shows that it may have only been a modest uptick and the Rays partially see the lower amount attributable to increased cord-cutting.
From a Feb. 9, 2019 Tampa Bay Times article:
But it’s not nearly as much as the Rays had once hoped, given a sports industry-wide drop in rights fees as a fallout from cord-cutting and other issues, or that some of their competitors got previously.
And it’s “well, well, well under” the $82 million annual average over 15 years that was reported last spring (of 2018) by Sports Business Daily, (Rays Principal Owner Stu) Sternberg said, declining now, and likely ever, to reveal what the exact number is, or how much it could boost payroll or help pay for a new stadium.
“It’s going to be an increase of where we are,’’ Sternberg said, estimating the new deal would rank about 20th in the majors. “Much of the reason we’ve spent all that we have is because we knew we had some more revenue (coming) off of TV. Unfortunately it’s going to fall reasonably short of what we anticipated four years ago.’’
A's-Comcast Deal: Known Unknowns
The best(?) information on the A's deal with Comcast on NBC Sports California on FanGraphs suggests that the team is receiving between $43-$48M annually in a deal that runs through 2029 and has an opt-out in 2023. (The San Francisco Business Times reported that the deal runs through 2033.) Does anyone have the source info on the deal? It's hidden pretty deep on the web if it exists.
Assuming what has been reported is accurate, the A's are locked out of even a Rays-like windfall for now, all while more and more people drop cable. This could have major, major implications for the team -- especially if we are to believe that media rights (local+national) are more valuable than raw attendance figures.
A bad TV deal also hurts the team's value, should majority owner John Fisher be looking to sell.
The 2023 opt-out is mighty interesting. You may recall that 2023 is the date that the Howard Terminal stadium should be opening, if all goes to plan. If it is approved, it seems likely that the A's would opt out and roll the dice with Comcast on a new deal.
Alternately, although Comcast continues to add broadband subscribers, the dynamics of its video side may be such that -- assuming the opt-out is mutual -- it exercises the option to try and squeeze the A's or cut the annual payout.
The biggest risk of the A's deal is that it has no equity component in NBC Sports California, unlike the Giants deal with sister station NBC Bay Area. This means it has no say on programming and far less leverage. The A's reported deal, given the big Bay Area media market (fifth largest), is modest, at best.
The Digital White Knight?
The A's TuneIn deal was heresy in some respects -- the first MLB team to go essentially streaming first. Why not do the same with TV? DAZN would be an ideal candidate for an overpay.
In 2018 the billionaire-owned streaming service headed by former ESPN head honcho John Skipper paid $300M to MLB to air "Changeup," a nightly clip show. They have lots of money and big ambitions. The second biggest contract in sports, with the highest annual payout is DAZN's deal with boxer Canelo Álvarez -- $365M/5 years. Yikes.
A deal with the A's might break the RSN lock on teams and re-juice the sports TV contract market.
Or...
The other way to get a plum TV deal? Move to a new market where you aren't treated as second-fiddle and you are moving into a gleaming new ballpark as the talk of the town.
Let's hope it doesn't come to that.
Or Even...
The A's could start their own streaming service. But, as the kids say, "A bird in the hand is worth two in the bush." (OK, they don't. But guaranteed cash payouts and pre-built infrastructure is far less risky than DIY.)
