The Biz: MLB explores starting cable net

By Published on .

Major League Baseball plans to start its own 24/7 digital cable channel within the next two years, giving all four major professional sports their own stations and prompting the question: Will the leagues someday broadcast all their games on their own networks?

"I don't think anybody should ever say never," says Tim Brosnan, Major League Baseball's VP-business operations.

The question of leagues broadcasting games on their own networks has been posed ever since the National Basketball Association became the first major sports league to start its own channel back in 1999. This year, the league has put 95 regular-season games on NBA-TV, but it still considers itself a complementary network to its broadcast partners.

The new NFL Network feels the same way. The National Football League's own network made its debut in November. It does not show live games but, like NBA-TV, offers shoulder programming, call-in shows, highlight shows, classic games and fantasy-league shows.

Still, while the premise of starting these networks might have been to feed the need of die-hard fans, the leagues also recognize the opportunity to control the content of their product, or, at least, some of it.

"With the expansion of the digital universe, it's kind of upped the ante a bit," Brosnan says. "Who could have predicted the changes that have gone on in this industry in the last 15 years, let alone the last five? ... The important thing is to establish the asset and have the ability to exploit it as the marketplace allows."

"I know it sounds simple, but if you can sell the advertising and make it more profitable than selling your broadcast rights, you can do it," says one league executive who requested anonymity. "In essence, the league would become a cable company."

And more and more, leagues are turning to cable as broadcast networks can't-or won't-pay the enormous rights fees for professional sports. The NBA is in the second season of a six-year, $4.6 billion deal in which the majority of its regular season games, All-Star Game and playoffs are on cable stations ESPN, a division of Walt Disney Co., and Time Warner's TNT. ESPN's sibling broadcast network, ABC, shows selected regular season games as well as all NBA Finals games.

Previously, the NBA had partnered with General Electric Corp.'s NBC for 12 years before the network decided that the televising of big-time sports was big-time out of control. For the second consecutive season, it does not have any of the four major sports, although it does televise half the Nascar season with News Corp.'s Fox.

"We walked away because we didn't like the price tag," NBC Sports spokesman Kevin Sullivan said. "That hasn't changed. If it was profitable, or just a break-even proposition, we would get back in it."

sport difficulties

The network gave up the NFL in 1998, baseball in 2000 and the NBA in 2002, citing such numbers as a 38% drop in ratings in the last four years of its basketball contract and losses of almost $300 million. Even Fox, which broadcasts baseball, football and Nascar, has had its difficulties. The network said it will have a $225 million write-down this year on its contract with Major League Baseball, a six-year, $2.5 billion deal that expires in 2006.

To think the leagues could become their own cable companies and sell so much advertising that it would be more profitable than selling their rights fees seems unrealistic to some.

"Two things jump out in my mind," said a broadcast network sports president. "One, there are costs such as the production of the games, the talent, things like that. Second, the distribution [on cable systems] just isn't there yet for these networks."

In fact, baseball's network is at least 18 months away. But the league is striking while it's hot. On Super Bowl Sunday, it spent $1 million to air a spot on Viacom's CBS, right after the game and during the hit show "Survivor" to promote its coming season.

In this article:
Most Popular