Last week at Piratefest, Pirates Prospects was part of a backstage Q&A with Frank Coonelly. One of the questions we asked him was if local TV contracts were the next frontier for revenues, judging by the recent TV deals signed by the Angels and Rangers. The video is courtesy of Tom Smith from Rumbunter:
Coonelly’s answer was that revenue sharing was implemented originally in the early 1990′s to counteract the disparity of local TV revenues, specifically the Yankees’ $40 million/year TV contract which at the time was “astronomical”. A portion of that money was shared with all teams that were without their own mega-deals.
Here we sit on the cusp of 2012 and now $40 million is dwarfed by the recent deals of the Angels ($150 M/year for 20 years) and the Rangers ($80 M/year for 20 years). There are some teams, the Yankees and Red Sox for example, that have formed their own networks in recent years to control their own financial destinies in the media market.
One item for consideration when you hear about these deals is that the team doesn’t receive the full whack of the yearly revenue shown above. A portion of it is put back into the revenue sharing pool for recipient teams, such as the Pirates, to receive. So as Frank Coonelly says at the tail end of his answer, “It’s still beneficial for the Angels to sign that contract, but they don’t receive all of the dollars payable under that contract.”
While that may be true, it would sure be better to get $145 million out of the Angels’ contract, instead of the $5 million that the Pirates may potentially receive. But not every market or team can command that type of yearly deal. Things like competition among other networks (Fox v. Time Warner in Los Angeles) and market size are factors, as well.
This raised a question for me — “Is there a correlation that can be drawn from these recent deals to what the Pirates could potentially command in this market?”
By and large, there is very little publically available information on the yearly value of local TV contracts. The Pirates signed a 20 year deal with ROOT Sports in April 2011, but no terms were disclosed. Forbes did an article in April 2009 on the 10 largest local TV contracts at that time, so it was used as the source point of research for this article. Using that article, plus the info on the Angels and Rangers, gave a spread of $28 million/year for the Orioles and Nationals (Mid Atlantic Sports Network) to the Angels recent $150 million/year with Fox.
When you divide the yearly total of local TV revenue by the metropolitan population of the team’s city, most likely the target audience within the TV station’s viewing range, you can see that the dollar amount/person is clustered around the $7 to $10 range. The recently signed deals by the Rangers and Angels have forged new territory into the $11 to $12 range, but it is safe to say that those deals are striking new territory. I don’t think anyone is shedding tears over the Yankees and Mets having a seemingly low dollar/person amount, especially since the Yankees are part owners in the YES Network and the other abundant media opportunities that exist for these teams in the largest city in the United States.
Using the Wikipedia figure of 2,356,285 people for the Pittsburgh metro area, we can assume that the recently signed deal with ROOT Sports should be somewhere between $16.5 M/year (using the $7/person amount) to $23.6 M/year (using the $10/person amount). These figures are just my speculation, of course, but it at least gives us a figure to wrap our heads around regarding the potential amount of revenue received per year by the Pirates.
Dejan Kovacevic has a small update on the off-season plans for the Pittsburgh Pirates. He mentions that there’s money to spend, and that he hears the top priority is a starting pitcher. Last week I pointed out that the Pirates have $7-10 M to spend. I also mentioned that the Pirates need another starting pitcher, due to the injury concerns that surround Erik Bedard, plus the general...
The latest on the Pirates...
The Pirates still have money to spend and their top priority is a starting pitcher, writes Dejan Kovacevic of the Pittsburgh Tribune-Review. About three weeks ago, the Pirates signed Erik Bedard and released Ross Ohlendorf. Paul Maholm, who made 26 starts for the Bucs this year, is expected to sign elsewhere. The list of unsigned free agent...
Hope everyone had a great holiday weekend… Monday brought a quiet night in winter league action. The Dominican League is done with the regular season and awaiting playoffs. The Puerto Rican League is still on holiday break, as is the Australian League. Rogelio Noris continues to get only sporadic playing time with Mazatlan in the Mexican Pacific League. The Venezuelan League...
Derrek Lee is one of the first base options who are waiting on Prince Fielder to sign.
Jon Paul Morosi of FOX Sports took a look at five off-season stories that will carry over in to the 2012 calendar year. The first two on his list were the first base market, focusing on Prince Fielder, then the players on the market after Fielder.
Fielder is definitely holding the market up...
On this date in 1953 the Pittsburgh Pirates traded young infielder Danny O’Connell to the Milwaukee Braves in exchange for six players and $100,000 cash. Danny had a strong season for the Pirates in 1953 hitting .294 with 57 walks and 88 runs scored. He was 26 at the time of the trade and had played just one prior season in the majors(1950) due to serving two years in the military...
Born on this date in 1952 was infielder Craig Reynolds who played for the 1975-76 Pittsburgh Pirates. He was a first round draft pick of the Pirates in 1971, the 22nd overall pick. He hit .318 that first season the Gulf Coast League but struggled the following year in A-ball playing just 41 games, hitting .240 with no homers. Just one year later he earned a late season promotion...
Pittsburgh Pirates 2011 Minor League Review
Organizational Talent Rankings via Baseball America:
2011 (19) | 2010 (15) | 2009 (18) | 2008 (26) | 2007 (19) | 2006 (19)
2011 Affiliate Records
MLB: [72-90] NL Central
AAA: [76-68] International League – Indianapolis
AA: [64-77] Eastern League – Altoona
A+: [74-63] Florida State League – Bradenton
A: [69-69] South Atlantic League...
The 2011 Pittsburgh Pirates early-season run was fueled by early starting pitching success. Now, heading into 2012 they are hoping for more improvement from their starters while their young prospects continue to develop.PiratesDugout.com's George Von Benko caught up with Pirates' pitching coach Ray Searage at Piratefest.
Just the Venezuelan and Puerto Rican Leagues in action on Tuesday night, with a few Pirates’ players and friends getting in on the fun.
Cardenales del Lara 4, Tigres de Aragua 2
Former Pirate Romulo Sanchez earned the win for Los Cardenales, throwing 2.2 scoreless innings. Sanchez entered the game immediately after Los Tigres scored their 2 runs in...
Today's POTD looks at a happier end result for the Blue Jays.
Pirates lefty Paul Maholm follows through on a pitch.Chase d'Arnaud, brother of Jays catching prospect Travis, drops the bat as he gets to first on an infield single to third off Brandon Morrow.Adam Lind awaits the throw from Morrow as d'Arnaud dives back to first.The Pirates took a 1-0 lead in the fifth after...
I think that this may be the longest posting hiatus in WHYGAVS history, so let's run over what's gone down in the last few days to get caught up. It's not a whole lot mind you, but definitely a few things at least worth mentioning. The only thing the Pirates have really done in the last week or so is sign Anderson Hernandez. This really isn't worth mentioning because...
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