Money Matters

A couple of quick items on money matters. King Kaufman criticizes the NFL’s new deal with DirecTV:

The new deal is that up to 11 games a week will be streamed online. Great news for the legions of fans who can’t get the DirecTV satellite service or don’t want to switch their TV provider just to have their choice of NFL games to watch on 17 of the 52 Sundays in a year. Right?

Wrong. The deal is only good if you already subscribe to NFL Sunday Ticket, which, in the second most fan-unfriendly deal in North American team sports, is available for $269 but only to DirecTV subscribers. And! You also have to subscribe to the $99 add-on bell-and-whistle package known as SuperFan. Also, it doesn’t work on a Mac.

The NFL has its reasons, millions upon millions of them, for having an exclusive deal with DirecTV. Limiting access drives up prices as long as there’s sufficient interest, which it’s safe to say there is in NFL football.

There’s a calculus involved, a weighing of the extra profits against the bad feelings engendered by the league’s giant “Screw you” to fans who don’t want a football league dictating what TV provider they do business with. The NFL evidently made that calculation a few years ago — and extended its exclusive deal with DirecTV.

So, fine. I think it’s a poor decision in the long term, but then again, NFL fans seem incapable of being offended enough by the league’s anti-fan stance to do anything about it. The single most fan-unfriendly deal in North American team sports is the NFL charging regular-season prices for exhibition games, and then forcing season-ticket buyers, the best customers, to buy those exhibition-game tickets.

But it seems to me the biggest market for streaming games online would be the folks who don’t have Sunday Ticket, for whatever reason. How many of the people who are willing to pay $269 or $368 for a season package will be glad to see that most — not all — games will be online because they just aren’t able to stay in front of the TV on Sundays?

Major League Baseball, a comparative piker in saying “Screw you, fans” despite that phrase being its operating philosophy, offers games online through MLB.tv as an alternative to the television Extra Innings package. You can pay by the month or by the year, and it’s a lot cheaper than Extra Innings, as it should be at this stage in history. Watching things online just isn’t as good as watching them on TV just yet.

What Kaufman describes is part of a larger dynamic: leagues limiting fan access in exchange for profits. We love to think that the magic of the market means that teams and leagues making more money goes hand in hand with more fans being able to see the product, and being willing to pay for it. But, the economics of modern sports often undermines this equation: it has increasingly been in the owners’ interest to air their products on media that limit – not expand – viewer/listener access. I wrote about this last year in connection with the St. Louis Cardinals’ new radio deal, and it’s a calculus that has driven David Stern’s decisions about the NBA’s television contracts as well.

Additionally, with the building of new ballparks, we’ll see this trend continue. The New Yankee Stadium will accomodate something like ten thousand fewer fans than the current one does. Given that the Yankees draw more than 50,000 fans a game, and that the new stadium stands will seat something like 45,000 fans, it stands to leave out in the cold at least five thousand fans a night. And, I think it’s fair to say, those five thousand won’t be the ones who can afford to pay for the more expensive seats that will be the norm in the new stadium. But, given the inclusion of luxury boxes (and higher average ticket prices), the new stadium will be much more profitable.

It’s never been more profitable to own a sports franchise (see this article in the news and Observer this morning about the Red Sox’ new business ventures. That franchise’s value has doubled since 2001, to nearly three quarters of a million dollars, and that doesn’t include the value of Fenway Park or of NESN, the cable network that broadcasts Red Sox games).

Why fans, and media, still spend about ten times the energy focusing on players’ salaries (and complaining about them) compared with owners’ ungodly profits and indifference to the ordinary fan is beyond me.

Well, no, it isn’t. But, it sure is annoying.

7 Responses to “Money Matters”

  1. The real question is why do people keep building stadiums for this billionaires. That’s bs.

    All that money and they still want a handout. And they aren’t even black folks.

    Imagine that.

  2. Why fans, and media, still spend about ten times the energy focusing on players’ salaries (and complaining about them) compared with owners’ ungodly profits and indifference to the ordinary fan is beyond me.

    Well, no, it isn’t. But, it sure is annoying.

    Co-sign

  3. Still Ridin Dirty Says:

    jweiler, first off I want to say great post. Over at ESPN as well as other news site that cover pro sports, this revelation is barely a mention.

    Although it should come as no surprise to people. For a couple of year now, the entities known as MLB, NBA, and the NFL have been trying their collective damndest to find ways to skirt the antitrust laws of this country and it seems that they have found several loopholes to succeed in their quest to bleed the fans pockets dry and become the monopolies that they so desire to be.

    With a bit of slight of hand to divert fans attention away from the real pressing problem that shroud these sports entities. With the constant turning of a blind eye as news agencies continually force feed the public every athlete’s indiscretions. When in reality those indiscretions aren’t really newsworthy or even worth wasting your breath mentioning. The collective leaguess come up with ways to become the sole body where all information from team updates to broadcasting of the actual games are all controlled by the respective leagues. Look at it this way, why share revenue with ESPN when the leagues and it’s owners of franchises can keep it all for themselves. That’s why MLBtv, NBAtv, NFL Network now exist. Pretty soon ESPN will be a caricature of it’s former self for it will be no longer needed by those leagues for marketing and braodcasting games.

    Several hours ago, I was speaking with a friend about how the NFL wants to have some regular season games played overseas as well the rumor of even the Super Bowl being played overseas as well. And I told him to set what I say in stone, because in a few years from now the only way you’ll be able to view a MLB, NBA, or NFL game is either by being at the stadium when the game is played or on PPV and that includes the Super Bowl, the NBA Finals, and World Series as well.

  4. Wrap your brains around this football fans:

    The NFL will go the route of PPV ONLY coming soon.

    its only a matter of time. Clearly they want nothing else.

  5. re: NFL going PPV

    It worked out so well for boxing, why not?

    Apologies for the snark, but I’ve got to hold out a sliver of hope that NFL can see implications of going PPV. Sure, you can make the same amount of money with 10% of the fan base, but TV contracts aren’t the only revenue stream. Can anyone name the current heavyweight champion?

  6. Man, NFL fans will pay to watch the games they want to watch. If the NFL charges about $15 to $20 to watch whatever game you want, people will buy them.

  7. Ken,

    That would be Vlad Klitchko, but I only know that because i’m a boxing head. Your point is definately taken.

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