Kings Land a Massive TV Deal (Pens Related)

[Bathgate]

http://www.kuklaskorner.com/index.php/hockey/comments/kings_land_a_massive_tv_deal_with_fox_sports_west/

Apparently 12 years for $250 million. This despite recent ratings of 0.37 and 21,000 households tuned in in a market of about 13,000,000. Compare this to the Pens ratings of 7.89 with 92,000 households tuned in in a market of 2,500,000.

http://www.sportsbusinessdaily.com/Journal/Issues/2012/04/09/Media/NHL-RSN-ratings.aspx

Yes the competition between 2 sports cable channels apparently helped raise the amount of the deal. But how can the winning cable channel come close to profiting with so few watching? Sure the numbers will pick up next year with the Kings in the finals and likely winning the Cup. But still! The market size is probably a factor, but shouldn’t the number of viewers be the biggest factor?

Does this give the Pens leverage when their TV deal with Root Sports comes due? Does anyone know when that will be? Does anyone know how much they currently receive from Root Sports for the TV rights?

Would appreciate a response from someone with a little inside knowledge of local sports TV deals.

[mikey287]

The Pens are signed with root until 2029. Not sure the exact numbers off hand.

[columbia]

I'm still waiting for Draftnik to see one of these sports-financials threads and swoop in.
His perspective (on a variety of issues) is missed around here.

[mikey287]

I'm still waiting for Draftnik to see one of these sports-financials threads and swoop in.
His perspective (on a variety of issues) is missed around here.

Indeed.

[columbia]

Two potential factors:

There's a real (or perceived) prestige associated with carrying a sports team in LA, that is of higher value to a station in Pittsburgh or Detroit and means more to the broader image/finances of the cable company.

The demographics of the audience: If hockey fans - on average - are more upscale in a place like LA, the cable company can attract advertisers for higher end products, who are willing to pay more.

Also, I suppose that general advertising rates in a place like LA could be inherently higher.

[mikey287]

Well, look at how much the Angels, Dodgers and Lakers get...it's obscene amounts of money. Also, it's just about advertising, mind you (all), the regional sports networks are subscription-based to the cable companies (if not, the customer themselves in the case of "prime ticket" AFAIK). So you get $2 - $4 or whatever per cable subscriber just for having "FSN Bay Area" in their channel list, whether they watch it once ever or every second of every day.

If I had to take a wild stab, and I mean, just a guess at a wide range - I'd say the Pens get $7.5 million - $15 million per year from TV. Nothing to back it up, just a pure guess.

[IanMoran]

Who else BESIDES Root could the Pens try to get more from? Doesn't that kind of limit the Pens potential TV deal? (Not really 2 competitors bidding for them)?

How long is the Pens deal with Clear-Channel? I'm sure The Fan would love to get them too

[owtahear]

The Pens are going to look to defect from the NHL to join the SEC??? Oh wait, wrong sport. Sorry. Carry on.

[BurghersAndDogsSports]

For now these local cable companies make most of their money off of subscriptions. Now I am not sure of how much per tv they get per month but carrying these teams goes a long way to make their station legit, and keep all carriers (ie: comcast, verizon, DirectTV, Dish Network) carrying them on their platforms. Therefore every "cable" TV in all of L.A. probably carries this station so if folks watch or not they are getting their cash.

Add in what the can advertise and other revenue opportunities and the are probably fine.

Not sure what the Pens get but when the Pirates books came out a few years back the TV money was exceedingly high. I bet the Pens push fairly close to the LA deal actually.

[pittsoccer33]

Who else BESIDES Root could the Pens try to get more from? Doesn't that kind of limit the Pens potential TV deal? (Not really 2 competitors bidding for them)?

Root is sports centered, so it makes sense from that perspective for sure.

But WPMY (My Network TV affiliate), WPCW (CW affiliate), WINP (Ion affiliate) could all bid for some package of games. Those three networks are all available freely over the air and also on all local cable and satellite systems, so from an awareness point the team would have wider exposure. They could also easily (well perhaps not easily but there would be space on the schedule) produce programs like Sportsbeat Rewind and The Hines Ward/Jerome Bettis show.

It would also be a possibility for one of the major players in the area - KDKA/WTAE/WPXI - with WPXI making the most sense, to use one of their digital sub channels as a forum for hockey games. Again, freely available to anyone with a $10 antenna and also on all the MSOs. WPXI could tie in with NBC and NBC Sports Network programming and leverage that. The problem there would be what to fill up the rest of the schedule with. It would have made more sense before NBC/Comcast moved the original Universal/NBC Sports away from an OTA broadcaster.

[Pitt87]

Who else BESIDES Root could the Pens try to get more from? Doesn't that kind of limit the Pens potential TV deal? (Not really 2 competitors bidding for them)?

Root is sports centered, so it makes sense from that perspective for sure.

But WPMY (My Network TV affiliate), WPCW (CW affiliate), WINP (Ion affiliate) could all bid for some package of games. Those three networks are all available freely over the air and also on all local cable and satellite systems, so from an awareness point the team would have wider exposure. They could also easily (well perhaps not easily but there would be space on the schedule) produce programs like Sportsbeat Rewind and The Hines Ward/Jerome Bettis show.

It would also be a possibility for one of the major players in the area - KDKA/WTAE/WPXI - with WPXI making the most sense, to use one of their digital sub channels as a forum for hockey games. Again, freely available to anyone with a $10 antenna and also on all the MSOs. WPXI could tie in with NBC and NBC Sports Network programming and leverage that. The problem there would be what to fill up the rest of the schedule with. It would have made more sense before NBC/Comcast moved the original Universal/NBC Sports away from an OTA broadcaster.

Not going to happen; a $25 million annual contract would sink local stations, not matter what the share is; they couldn't meet the revenue requirements, even adding in carriage and other fees. If you look at the 'parents' of the local TV stations here (Cox, Sinclair, and CBS) they don't carry these things except at a national level; its because there isn't enough money LOCALLY to develop and deliver the content; also consider that, if they were to get the rights, the locals would have to do ALL the selling. That means that national advertisers would have to buy TV locally to get access to the team; not an easy thing to do.

The reason Root can do it is fairly simple; they can sell local sports to big advertisers at a national level, they get higher carriage rates across the different operators, and have the backing of DirecTV for delivery. Unless the locals drive a simulcast or licensing agreement, you will never see major sports broadcast locally. The profits just aren't there.

[GreenPen]

Makes me wonder if we got a good deal?