Rockies, other MLB teams in line for big jump in TV money
The Colorado Rockies have become cautious spenders under the ownership of Dick and Charlie Monfort. With some correspondingly modest results.
The Rockies in recent seasons have provided a generally entertaining product, and have made some strides with a regional marketing strategy that includes Utah and the Salt Lake City television market.
Still, nobody calls the Rockies star-studded. And nobody here calls the Rockies Utah's major league team. But the Monforts hope that will soon change.
As Major League Baseball moves into what appears to be a period of huge revenue increases derived from regional and local television contracts, the Rockies' spending philosophy may soon change.
"The money [is] substantially more than what we had been getting paid. I was sort of shocked by the amount we could get," Dick Monfort said during a recent Salt Lake City visit. "And now I'm even more shocked."
The Rockies' current 10-year, $200 million deal expires in 2014. Based upon other TV deals for other teams, Colorado figures to receive a significant upgrade on its next television contract.
The Texas Rangers and Los Angeles Angels have new television-rights agreements in place that will pay each approximately $3 billion over the next 20 years. Even San Diego, which plays in baseball's 26th largest market, is expected to complete a deal with Fox Sports worth $75 million per year for the next two decades.
The impact of these new contracts has been almost immediate. The Angels paid Albert Pujols $250 million over 10 years, and the Rangers spent $111 million for Japanese pitching superstar Yu Darvish.
"All of these television deals are staggered all over the place," Monfort said. "Right now, Texas has the best deal. Who's to say Los Angeles [Dodgers] in the next year might not have a better one? Our hope is to catch a time, even though we're a smaller market, close to what the other has."
Philadelphia, Seattle, Arizona, Washington and the Dodgers will have new deals by 2015. Monfort expects the Dodgers' new deal might reach $4 billion or $5 billion. That would put them on a better footing vis-a-vis MLB's television standard-bearer, the Yankees who receive annual revenues of more than $450 million from its YES television network.
Major League Baseball's national television revenue still pales in comparison with the NFL. The difference in dollars is reflected by television ratings. The NFL broadcasts all of its games to a national audience. In 2014, its $20.4 billion television deal with multiple networks will balloon to a reported $39.6 billion through 2022.
But MLB has now tapped a vein that will change the way it does business for year to come. The key word here is local.
"The local TV money has changed the entire landscape," Ed Goren, vice chairman of Fox Sports media group, told USA Today. "There are a lot of other teams that can play with the big boys now and write those big checks."
What is the difference between what the national product its $2.6 billion deal expires in 2013 is worth compared to the local market?
The answer is consistent airtime, which is more attractive to sponsors. There are 162 games and a local fan base that will tune into pre- and postgame shows, a manager's show.
ROOTS Sports also replays Rockies games later in the evening. It is the only major league team with a broadcast aimed at the Utah market. The Rockies' hope is that the added broadcast bucks and the ability to pay more for players will broaden their appeal on the other side of the Rockies, and their other secondary markets in the Intermountain area.
But Monfort cautions that even with the added revenue, the Rockies will continue to be discriminating buyers.
Colorado did sign mainstay shortstop Troy Tulowitzki to a $160 million deal that runs through 2020. But the Rockies owner says even an irresponsible contract could undo much of what they're trying to do. Exhibit A: the 32-year-old Pujols.
"The thing that's bothersome is not necessarily the amount of money. â¦ It's when you're paying a guy that kind of money when he's 38, 39, 40, 41 or something like that. We've always been concerned more with the length [of a contract] than dollar amount.
"You don't want to box yourself in six or seven years from now with a guy who is making all that money but isn't contributing." Rockin' in the dough
The Colorado Rockies' current 10-year television deal, worth a reported $200 million, expires in 2014.
The Los Angeles Angels and Texas Rangers recently signed local television packages worth approximately $3 billion over 20 years.
Dick Monfort, now in his 15th season with the Colorado Rockies as owner/chairman and chief executive officer, predicts the Dodgers' new TV deal might reach between $4 billion and $5 billion.
Bigger Rocks in SLC?
Dick Monfort said the Rockies, whose Triple-A team is in Colorado Springs, would love to have a presence in Salt Lake City.
"This would be a tremendous place for us," he said. "I wish our Triple-A team would be in Salt Lake. It would be a great marriage. Utah is a perfect place to grow our brand."
Monfort understands that the Salt Lake Bees have a "great relationship" with the Los Angeles Angels. But, "it would be a great thing for us."