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Marlins TV Rights Negotiations

MarlinsFan19

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"Before Derek Jeter took over as CEO and part-owner, the Marlins’ former management presented to Jeter a Fox contract extension proposal that called for a rights fee beginning north of $50 million, with some up-front payments in 2019 and 2020, according to a league source.


Jeter told the Marlins not to take that deal and to allow the new ownership to negotiate its own contract, which was understandable. (Every new ownership group should be able to handle negotiations on a key revenue stream.)

What’s unclear now is whether Sinclair is offering that amount, let alone more."

per the herald
If Sinclair can’t at least match that deal, the organization should walk. The upfront payments in the deal would have made a big difference in making the club a contender immediately, the payments were probably in the $10-30 Million range. If we can’t get a streaming deal, I’m sure Comcast would love to bid on the Marlins TV rights and launch NBC Sports Miami.
 

miamibaseball

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i dont like amazon so i hope their bring it free tv like their did back in days or fsn sport i dont need pay more cable company to see marlins like thyeir did with nny with yes network you have pay extas to see nny play
 

rmc523

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i dont like amazon so i hope their bring it free tv like their did back in days or fsn sport i dont need pay more cable company to see marlins like thyeir did with nny with yes network you have pay extas to see nny play
That was painful to read/try to interpret.
 

MarlinsFan19

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Marlins are reportedly staying with 940 WINZ as flagship radio station. Interesting since they can’t be heard in some of Broward and all of Palm Beach County at night. They have improved lately by adding 1230 WBZT in West Palm as an affiliate. The organization needs to work on adding affiliates in Fort Myers-Naples, Treasure Coast, and Orlando.
 

MarlinsFan19

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Bad News

Source: John Wall Street Section of Sports Illustrated

The Miami Marlins television deal with Fox Sports Florida expires at the end of the 2020 season and despite talk of "ongoing, serious negotiations" it is feasible - if not increasingly likely - that the existing pact could reach its term without an extension in place. Prior to the sale of the franchise in 2017, the club’s former leadership team presented Bruce Sherman and Derek Jeter with a proposal for an extension that “called for a rights fee beginning north of $50 million, with some up-front payments in 2019 and 2020.” Believing they could negotiate a better deal, the new ownership group rejected the offer. But the Jeter-lead front office hasn’t been able to convince the RSN its broadcast rights are worth more money and Sinclair - comfortable with the Rays under contract - seem unlikely to significantly increase their offer now. Former Marlins executive Mark Geddis says that it’s no longer a question of how much more the team can command, but “where and when they’re going to settle [for less].”

Howie Long-Short:
The deal that the Sherman-Jeter group passed up before closing on the franchise “is one they would sign today without even reading the contract [terms].” Geddis said that “with cord cutting having accelerated [over the last 2-3 years], it has become increasingly difficult [for networks] to value [local broadcast rights and to justify paying out huge contracts to teams].” Remember, the RSNs are being squeezed on the other end by the cable and satellite providers. Sinclair’s well-documented struggles over the last 6 months would also lead one to believe that the purse strings may have been tightened a bit since the $50+ million/year offer was made.

The Marlins have been playing hardball (pun intended) with Fox Sports Florida, but the team lacks a viable alternative to the RSN. Gettis said, “to some degree, [the NL East club] is a hostage.” The only other regional sports network within the state is Fox Sports Sun (another Sinclair owned property) and no one pretends to believe a Marlins-centric television channel would be viable in today’s cable environment.

The only real leverage the Marlins held in negotiations seemingly dissipated when the Rays agreed to their new broadcast deal with Fox Sports Sun in 2018. That’s because Sinclair only ‘needed’ to lock down the rights to one Florida based baseball team for their two RSNs in the state (the second is considered a bonus). The Rays ended up signing a lucrative deal worth $65 million to $70 million in base value with another 20% to 25% in carried interest (estimated to be worth +/- $25 million/year). Of course, the Rays draw significantly better ratings than the Marlins do.

There’s little reason for Fox Sports Florida to increase their offer for the rights at this point. As the current deal gets closer to its expiration date, it’s the Marlins that “are seemingly losing leverage.” Gettis explained “there are a lot of older people in [the South Florida market], so it’s not as if a significant number of cable subscribers are going to cut the cord because they’re no longer getting Marlins baseball.” The team also desperately needs the exposure (perhaps more than most franchises). “The broadcasts are a chance to promote home games, the team, the players and their promotions. It’s important to have that three-hour commercial every night.” One senior media rights advisor suggested the team would have to get creative in negotiating a deal (think: increased equity stake, retaining all ad revenues) to find the upside they seek.

Editor Note: Please note that joining our community (si.com/johnwallstreet) will entitle you to receive our free daily email newsletter.

End of Article


If we’re not going to get at least $40 Million in the first year, the organization should sign with WSFL (CW) or WBFS (MyNetwork) get an equity stake in broadcast TV station (which is more valuable than a stake in a RSN) and have an ad revenue sharing arrangement.

What’s the point of limiting reach by airing on an RSN if you can’t get much money out of it?

At this rate, we can get on broadcast TV, be available on every TV in every household in Florida, Improve our ratings dramatically, and get just as much if not more TV revenue per year.
 
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fauowls44

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I don't buy the argument that the Marlins have less value to Fox Sports because they already have the Rays deal. Tampa is a completely different market.

This guy is claiming that the RSN is going to just ignore the #16 (Miami-Ft. Lauderdale) and #36 (Palm Beach) markets in the country because they already have a team in another part of the state locked into a deal. It's like saying an RSN in Pennsylvania would be OK not having the rights to Pirates games because they already have the Phillies deal. It's nonsense. The 2 markets are completely different and both are valuable.
 

MarlinsFan19

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I don't buy the argument that the Marlins have less value to Fox Sports because they already have the Rays deal. Tampa is a completely different market.

This guy is claiming that the RSN is going to just ignore the #16 (Miami-Ft. Lauderdale) and #36 (Palm Beach) markets in the country because they already have a team in another part of the state locked into a deal. It's like saying an RSN in Pennsylvania would be OK not having the rights to Pirates games because they already have the Phillies deal. It's nonsense. The 2 markets are completely different and both are valuable.
I still don’t understand why West Palm Beach gets their own ABC, CBS, NBC, and FOX affiliates. West Palm Beach is still in the Miami MSA (Metropolitan Statistical Area). It’s like Oakland getting it’s own TV Market from San Francisco, Fort Worth from Dallas, Anaheim from LA (etc.).Telemundo and Univision have one station for all of South Florida (Indian River County to Key West).

A combined Miami-Fort Lauderdale-West Palm Beach TV Market would be the 6TH Largest TV Market in America. We would be up with the Cubs, Phillies, and Rangers and ahead of the Red Sox, Giants, and Nationals. Sinclair would have to pay attention.
 
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Former Marlins executive Mark Geddis says...
I'm confused. How is this guy who hasn't been a part of the negotiations for the last 3 years an authority on the matter? I mean, maybe he's got contacts in the org leaking him this info, but I'll believe the Marlins have a shit-deal in place when I see it.

This org has been so innovative in every way so far. I suspect the TV deal will be no different.
 

Das Texan

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If Sinclair can’t at least match that deal, the organization should walk. The upfront payments in the deal would have made a big difference in making the club a contender immediately, the payments were probably in the $10-30 Million range. If we can’t get a streaming deal, I’m sure Comcast would love to bid on the Marlins TV rights and launch NBC Sports Miami.
Why?

Because of the stellar ratings the Malins bring in?
 

Das Texan

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Remember when I went on about how the Marlins should have pushed the acclerator when Jeter and Co bought the team?

This is why.

I'm not really sure what Jeter/Sherman expected other than proving how fucking god awful they are at the business side of baseball.

I can get a better deal, so lets just throw out an inferior product that literally nobody is going to watch and the RSN will come beating down my door because you know, its just a given right.

Stubborness and idiotic business side management.
 

Das Texan

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The Royals had an average annual value of $25 Million in their previous TV deal.

In their new 10-15 year TV deal the AAV will be $50 Million.

The Marlins are now receiving about $18-20 Million per year. If we extrapolate using the new Royals TV contract at a 100% increase the Marlins would only get $36-40 Million over a 10 year deal.

In contrast, WGN paid the Cubs $250,000 per game from 2015-2019. That is 162 x $250,000= $40 Million per year. Even in the smaller Miami Market we could get $27-35 Million to go on OTA TV only (WPLG, WSVN, etc.) and syndicate to WPB, Fort Myers, Orlando, Jacksonville.

If you owned a team would you rather earn $36-40 Million with 19,000 Households Watching or $27-35 Million with 175,000-225,000 Households watching? You could make up the difference in revenue through merchandise sales from the additional 150,000+ Households watching your team.

Based on these figures it looks like the RSN bubble is bursting. A combination of Streaming and OTA broadcast TV is best to boost brand exposure and increase fan accessibility.
If the streaming companies aren’t interested, give all 162 games to WPLG or WSVN. The number of households that would be watching the Marlins would increase tenfold from 19,000 to 175,000-225,000.

The royals get far better ratings. The factor you 100% ignore
 

taiwanmarlin

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People always said the "ratings" were very low in the South Florida, does it mean lots of family over there have no the cable TV ?
 

AeroFishOne

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Remember when I went on about how the Marlins should have pushed the acclerator when Jeter and Co bought the team?

This is why.

I'm not really sure what Jeter/Sherman expected other than proving how fucking god awful they are at the business side of baseball.

I can get a better deal, so lets just throw out an inferior product that literally nobody is going to watch and the RSN will come beating down my door because you know, its just a given right.

Stubborness and idiotic business side management.
Can’t help but agree with the last big paragraph. In the middle of a major rebuild is not the time to try and make bank on a TV deal but in fairness to them, I don’t know what the alternative was.
 

taiwanmarlin

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No it means people dont watch the Marlins.
Maybe Puig would attract people to turn on the TV and watch the Marlins game (many fans want him to play in Miami), I know one player only wouldn't solve the issue of low ratings but at least it would be a good start and with the urgency to have the new TV deal taking place before the start of the 2021 season, it's too late to have a better ratings after two to three year when this team competing (if that happens).
 

CYmarlins

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The original deal sounds very fair, especially after what the Rays got. The time has come and gone for the mega TV deals.
 

CapeFish

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I don't buy the argument that the Marlins have less value to Fox Sports because they already have the Rays deal. Tampa is a completely different market.

This guy is claiming that the RSN is going to just ignore the #16 (Miami-Ft. Lauderdale) and #36 (Palm Beach) markets in the country because they already have a team in another part of the state locked into a deal. It's like saying an RSN in Pennsylvania would be OK not having the rights to Pirates games because they already have the Phillies deal. It's nonsense. The 2 markets are completely different and both are valuable.
To me, it's a negotiating ploy. Even with the poor ratings the Marlins have seen the last couple of seasons, they still bring eyeballs to advertisers. The Rays draw good ratings in the Tampa Bay market, but the combined South Florida markets are bigger and more lucrative.

Sinclair is trying to buy low because they know the ratings will only increase while the team, rightfully, is trying to capitalize on what is coming. The Rays received an equity stake in Fox Sports Sun and I'd imagine the Marlins may be trying to grab a part of Fox Sports Florida similarly.

The advent of legalized sports gambling, the eventual evolution towards digital streaming and direct-to-consumer, and the team now controlling the digital rights for the in-market broadcasts are all topics that need to be dealt with. Plus, Sinclair and Comcast's contract runs out this summer, which means that a loss in distribution is possible for a while if they cannot come to an agreement. I think they will come to a deal soon to avoid an issue in Chicago (Cubs new channel is with Sinclair) which should remove this concern and allow Sinclair to feel more firm on moving forward with a deal. I'd be interested to see if they consider a move towards a Spanish-language RSN to compliment the English broadcast at some point. The SAP broadcast of the Spanish radio call is popular and accessible.
 

miamibaseball

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Marlins are reportedly staying with 940 WINZ as flagship radio station. Interesting since they can’t be heard in some of Broward and all of Palm Beach County at night. They have improved lately by adding 1230 WBZT in West Palm as an affiliate. The organization needs to work on adding affiliates in Fort Myers-Naples, Treasure Coast, and Orlando.
ty
 


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