Business, Economics, and Taxes: Capitalism. Yay? >=(

[Spartanforlife4]

Yeah it's going to get ugly. Smart leagues would be looking to maximize national games and helping teams start their own networks...

Genius leagues would just take it over themselves. The upfront cost will be huge but the revenue for the league and teams could be monstrous. Basically take the various packages you have and expand them.

What does it mean to have your own network as a team, though? The Yankees have that and it's functionally just another RSN.

[Jimjamesak]

To put in perspective the amount of revenue MLB is generating and what they would need to do to replace it:

I’ll lowball and say teams are averaging $60 million a year (and that’s nowhere near what teams like Yankees, Mets, or Red Sox are bringing in). That’s $1.8 billion a season for all 30 teams.

Now, best case scenario MLB gets 10 million subscribers (they’d have the 23rd largest streaming service in the world), they’d need $15 a month per subscription. 5 million subscribers it’s $30 a month.

Realistically it’s probably closer to $2.5 to $3 billion from 3-4 million subscribers factoring all the production costs and a realistic subscriber count. That’s $70+ a month per subscriber.

[Kepler]

Because there’s no way for the teams to make up the lost revenue.

The Pirates alone were getting around $40 million a year.

But that revenue is going away anyway. It was based on RSNs getting onto local basic cable and charging the entire population for it whether they watched or not. The Fox News business model. They were parasites who could only survive because there was no competition for consumers to choose between local cable packages, it was a monopoly.

But now everybody under the age of 60 is cutting the cord, so those networks can't free ride anymore. The theft is over. They'll have to survive on their own merits.

[Jimjamesak]

But that revenue is going away anyway. It was based on RSNs getting onto local basic cable and charging the entire population for it whether they watched or not. The Fox News business model. They were parasites who could only survive because there was no competition for consumers to choose between local cable packages, it was a monopoly.

But now everybody under the age of 60 is cutting the cord, so those networks can't free ride anymore. The theft is over. They'll have to survive on their own merits.

Oh I’m not complaining about it, it’s hilarious to me watching all this. I knew it was coming, I just didn’t think it would happen this soon. I figured it’d be 4-5 years down the line.

There’s about to be a monumental change in the sports world. MLB is about to be toast. They’re about to lose a huge chunk of revenue they can’t replace and the only way to fix things likely involves losing an entire season. And that’s if the owners can all get on the same page, which isn’t likely.

The NHL is heading for a similar, if not worse scenario.

[Handyman]

What does it mean to have your own network as a team, though? The Yankees have that and it's functionally just another RSN.

As a network nothing. But the TV model is dying and it would give you streaming rights which could be helpful if you know what to do with them. The money lost is going to be a problem though.

Personally I dont think the MLS system is sustainable in the long run (I doubt Apple will stick with it unless its popularity really jumps) but it is a smart move for both. Soccer has a rabid following and potential but sooner or later that won't be enough. I dont think that will work for any other sport though because I dont see major corps making that kind of an investment in a sport. Considering how badly E$PN is dragging down Di$ney (there is a reason the studios and Disney+ have a blank check but E$PN gets cut almost quarterly) it has been obvious for a while the money just isn't going to be worth it and they have contracts for some very popular sports. Does anyone think spending billions for exclusive rights to MLB is going to look good on your P&L perspectives? Baseball and Hockey are way too big for say Amazon to purchase the exclusive contracts for rights. Neither on their own would bring in enough value to really make the price worth it even if they were handed most of the infrastructure. The ad revenue is just not worth it for them in most of the markets.

There is no perfect solution. College probably did it the best having conferences start networks but even half of those suck. (Pac12 and Big 12 are pretty weak) The problem is the leagues all expanded way too much and everyone got used to the fact that games would always be on. Teams stopped tailoring games to the fans in attendance and tailored it more for TV and now fans don't care to attend and only watch the games that interest them. That is a massive recipe for disaster.

I think if something isn't figured out in the next few years lockouts will be the least of their worries. Contraction in all leagues will happen. Salaries are going to crash. (especially MLB where its a friggin joke...just look at the Padres) PPV will become a thing only it will be streaming based and not TV based and the quality is going to full on suck because there will be no money to upgrade. The shedding of fans many teams already have will be kicked into overdrive.

There is only one sport that is truly safe, the NFL. And sooner or later that will hit its nadir too. It wont be hastened though because nothing will replace it. The disturbing trend of youths getting away from the sport though is going to catch up with it sooner or later.

[dxmnkd316]

Sports dirty secret is a lot of the tv money comes from non fans. In your scenario that disappears.

This is exactly right. I don't know what fraction, but it's not insignificant.

[Handyman]

Oh I’m not complaining about it, it’s hilarious to me watching all this. I knew it was coming, I just didn’t think it would happen this soon. I figured it’d be 4-5 years down the line.

There’s about to be a monumental change in the sports world. MLB is about to be toast. They’re about to lose a huge chunk of revenue they can’t replace and the only way to fix things likely involves losing an entire season. And that’s if the owners can all get on the same page, which isn’t likely.

The NHL is heading for a similar, if not worse scenario.

Same. Its partly why I barely watch sports anymore outside my teams. (and even that is only if I dont have something better to do) All the leagues have completely watered down everything and made it unremarkable to watch your team play in an effort to be the NFL. (who also did that but in a more successful way)

Think about how things were even 30 years ago. NHL teams rarely had all their games (or even most of them) broadcast live let alone nationally unless it was the playoffs. (and even then that might go to PPV) The NBA prior to Magic and Bird was teetering on the brink of bankruptcy and the ratings were trash. Baseball was always was most consistent and half the games often were only on the radio. College sports was so highly regional that any game you saw that wasn't in your conference was a special event...which is partly why Bowl Games mattered. Now, every Saturday you can literally watch college football from like 9am to midnight. Baseball has to change the rules because people are bored watching on TV 162 days a season. (no one cares about the radio under the age of 40) The NHL has spent the last 20 years pretending it is a bigger deal than it is and the NBA sold out all of its credibility a long time ago.

Personally I can't wait...I think every sport will be 1000% more interesting and enjoyable when they stop making it TV ready. Well except baseball...what they let the nerds do to that sport makes it unwatchable. Screw them and screw MLB, screw the greedy azz players it is just worthy of choking on its own vomit.

[dxmnkd316]

As a network nothing. But the TV model is dying and it would give you streaming rights which could be helpful if you know what to do with them. The money lost is going to be a problem though.

Personally I dont think the MLS system is sustainable in the long run (I doubt Apple will stick with it unless its popularity really jumps) but it is a smart move for both. Soccer has a rabid following and potential but sooner or later that won't be enough. I dont think that will work for any other sport though because I dont see major corps making that kind of an investment in a sport. Considering how badly E$PN is dragging down Di$ney (there is a reason the studios and Disney+ have a blank check but E$PN gets cut almost quarterly) it has been obvious for a while the money just isn't going to be worth it and they have contracts for some very popular sports. Does anyone think spending billions for exclusive rights to MLB is going to look good on your P&L perspectives? Baseball and Hockey are way too big for say Amazon to purchase the exclusive contracts for rights. Neither on their own would bring in enough value to really make the price worth it even if they were handed most of the infrastructure. The ad revenue is just not worth it for them in most of the markets.

There is no perfect solution. College probably did it the best having conferences start networks but even half of those suck. (Pac12 and Big 12 are pretty weak) The problem is the leagues all expanded way too much and everyone got used to the fact that games would always be on. Teams stopped tailoring games to the fans in attendance and tailored it more for TV and now fans don't care to attend and only watch the games that interest them. That is a massive recipe for disaster.

I think if something isn't figured out in the next few years lockouts will be the least of their worries. Contraction in all leagues will happen. Salaries are going to crash. (especially MLB where its a friggin joke...just look at the Padres) PPV will become a thing only it will be streaming based and not TV based and the quality is going to full on suck because there will be no money to upgrade. The shedding of fans many teams already have will be kicked into overdrive.

There is only one sport that is truly safe, the NFL. And sooner or later that will hit its nadir too. It wont be hastened though because nothing will replace it. The disturbing trend of youths getting away from the sport though is going to catch up with it sooner or later.

I think you're substantially right. I really don't think it's possible to underestimate how bad this is going to be. The Mets, given how much they locked in for the better part of the next decade, are as hyper****ed as anyone.

I truly think this is the peak of sports as we know it. Sports as king are over. They aren't going anywhere, but salaries are going to have to get cut in half. That's... not ideal for front offices. The only league that isn't boned long term, I think, is the NBA. They've got the smallest player base and the smallest minor leagues outside of the NFL (who somehow got colleges to pay for their minor league).

I think the NHL will be fine, but contraction is a huge likelihood. Almost a certainty in my mind. And I think that's going to make for a much healthier league long term given the collapse of RSNs.

[Handyman]

This is exactly right. I don't know what fraction, but it's not insignificant.

Well it isn't that hard to figure out actually. How many people pay for any service that has an RSN whether it is cable, satellite or a streaming package? What is the actual viewership of any one game? There you go.

I did a Google Search and found that in 2020 141k people watched the Twins on average per game. (which is up!) How many people in Minnesota do you think pay for a service that has Bally's on it? (likely somewhere between 1-3 million if not more!) Hell I bet 3/4 of the Twin Cities does so that is hundreds of thousands right there! The non-watchers are subsidizing everything.

[Jimjamesak]

I think you're substantially right. I really don't think it's possible to underestimate how bad this is going to be. The Mets, given how much they locked in for the better part of the next decade, are as hyper****ed as anyone.

I truly think this is the peak of sports as we know it. Sports as king are over. They aren't going anywhere, but salaries are going to have to get cut in half. That's... not ideal for front offices. The only league that isn't boned long term, I think, is the NBA. They've got the smallest player base and the smallest minor leagues outside of the NFL (who somehow got colleges to pay for their minor league).

I think the NHL will be fine, but contraction is a huge likelihood. Almost a certainty in my mind. And I think that's going to make for a much healthier league long term given the collapse of RSNs.

Of the leagues I think the NFL, NBA and MLS will be fine. The NFL will continue to strongarm the networks and media companies with their ratings. The NBA and MLS will be fine because they both have global appeal and therefore a larger audience to spread out the cost. Yeah MLS has to compete against the Euro leagues but that’s probably the next bubble to burst (it’s a massive house of cards). The NBA has short term pain coming with the RSN collapse but they’re competent enough they’ll get through it until they can put an MLS style package together with either Google or Apple. Like I said, they have enough global appeal that they could have 10 million plus subscribers easy.

I’d have more confidence in the NHL if it wasn’t run by a bunch of morons. I’m sure there’s some owners that want to put together a streaming package but the Canadian teams and especially teams like the Bruins, Rangers, and Blackhawks will fight that to the death.

[ScoobyDoo]

Well it isn't that hard to figure out actually. How many people pay for any service that has an RSN whether it is cable, satellite or a streaming package? What is the actual viewership of any one game? There you go.

I did a Google Search and found that in 2020 141k people watched the Twins on average per game. (which is up!) How many people in Minnesota do you think pay for a service that has Bally's on it? (likely somewhere between 1-3 million if not more!) Hell I bet 3/4 of the Twin Cities does so that is hundreds of thousands right there! The non-watchers are subsidizing everything.

Yes, and this is exactly why these clowns thinking they can stream their way to riches is so laughable. They had the goose that lays the golden eggs and they shat all over it for greed. And now the rooster is coming back to roost.

[Handyman]

Of the leagues I think the NFL, NBA and MLS will be fine. The NFL will continue to strongarm the networks and media companies with their ratings. The NBA and MLS will be fine because they both have global appeal and therefore a larger audience to spread out the cost. Yeah MLS has to compete against the Euro leagues but that’s probably the next bubble to burst (it’s a massive house of cards). The NBA has short term pain coming with the RSN collapse but they’re competent enough they’ll get through it until they can put an MLS style package together with either Google or Apple. Like I said, they have enough global appeal that they could have 10 million plus subscribers easy.

I’d have more confidence in the NHL if it wasn’t run by a bunch of morons. I’m sure there’s some owners that want to put together a streaming package but the Canadian teams and especially teams like the Bruins, Rangers, and Blackhawks will fight that to the death.

I think the NBA is walking a line. It has global appeal but I think it is closer to crashing in the US than anyone wants to believe. It is running into the same problem baseball is where the games are not fun to watch and the systems are making it even worse. The amount of 3 pointers shot per game is ridiculous and we won't even get to the up and down nature of what is a foul or any other penalty. The NBA is too star driven and that will kill it in the end. Plus I don't think the worldwide appeal will really help all that much unless they fix the game on a fundamental level.

If MLS sticks to its core audience it will do just fine. (if it grows let it be natural) If it makes the same mistake the NHL and NASCAR did it likely crashes and burns.

[Drew S.]

Of the leagues I think the NFL, NBA and MLS will be fine. The NFL will continue to strongarm the networks and media companies with their ratings. The NBA and MLS will be fine because they both have global appeal and therefore a larger audience to spread out the cost. Yeah MLS has to compete against the Euro leagues but that’s probably the next bubble to burst (it’s a massive house of cards). The NBA has short term pain coming with the RSN collapse but they’re competent enough they’ll get through it until they can put an MLS style package together with either Google or Apple. Like I said, they have enough global appeal that they could have 10 million plus subscribers easy.

I’d have more confidence in the NHL if it wasn’t run by a bunch of morons. I’m sure there’s some owners that want to put together a streaming package but the Canadian teams and especially teams like the Bruins, Rangers, and Blackhawks will fight that to the death.

I doubt NBA ‘fans’ are going to spend the money to pay for a streaming package. I think it’s actually much more likely NHL or MLB fans are willing to pay.

I was able to watch the second half of the Revs game Saturday on my tv(it wouldn’t work on my phone) and even though the quality was good can’t see paying the $80 for the package. My wife subscribes to Apple TV so we will get a bunch of the games free anyway. If someone like me who is a huge sports fan who likes soccer doesn’t subscribe that isn’t a great sign.

What is up with the MLS schedule? They have a lot of the games on Saturday nights and don’t stagger them very much. Given how poor the weather is here this time of year seems pretty crazy to play home games at night.

[Jimjamesak]

I think the NBA is walking a line. It has global appeal but I think it is closer to crashing in the US than anyone wants to believe. It is running into the same problem baseball is where the games are not fun to watch and the systems are making it even worse. The amount of 3 pointers shot per game is ridiculous and we won't even get to the up and down nature of what is a foul or any other penalty. The NBA is too star driven and that will kill it in the end. Plus I don't think the worldwide appeal will really help all that much unless they fix the game on a fundamental level.

If MLS sticks to its core audience it will do just fine. (if it grows let it be natural) If it makes the same mistake the NHL and NASCAR did it likely crashes and burns.

As long as the NBA has stars they can trot out they’ll be fine. People have complained about the NBA game for decades and yet they still watch. Though it’ll be interesting to see what happens when Lebrun and Curry retire.

MLS has always been about slow growth, sometimes to the point of frustration, and they’re not going to change now. They might try for a big signing like Messi but they’re not going to suddenly drop the salary cap or something. The biggest risk they’re taking is with the Apple deal (they’ve moved to centralized production of all their games) but it’s barely been a week and they’re already looking like geniuses for getting out of the RSN model (though they’d been planning it since 2019).

[dxmnkd316]

I doubt NBA ‘fans’ are going to spend the money to pay for a streaming package. I think it’s actually much more likely NHL or MLB fans are willing to pay.

I was able to watch the second half of the Revs game Saturday on my tv(it wouldn’t work on my phone) and even though the quality was good can’t see paying the $80 for the package. My wife subscribes to Apple TV so we will get a bunch of the games free anyway. If someone like me who is a huge sports fan who likes soccer doesn’t subscribe that isn’t a great sign.

What is up with the MLS schedule? They have a lot of the games on Saturday nights and don’t stagger them very much. Given how poor the weather is here this time of year seems pretty crazy to play home games at night.

I tend to agree on the NHL and MLB. MLB has had a functional streaming platform for 10-15 years. It's only the blackout insanity that has held them back.

The NHL fans are almost certain to be the most likely to pay. Richer fan base. Winter sport inside coupled with a relatively northern centric team base. They fanbase is so small already it's distilled down to people who just want to watch for a reasonable price without getting dropped, having an absurd blackout system, and irregular availability. Just do NHL.tv, make it $120/yr and the fans will come. Obviously that's just a fraction of the RSN money, but there are ways to supplement.