Tuesday, October 5, 2010

Rays Stand to Make Huge Revenue Windfall

All the talk that Rays attendance is suffering because fans would rather watch the game on their own HD sets isn't necessarily a bad thing. On the heels of a monster billion-dollar television deal announced by the Texas Rangers, it's becoming clear that the Rays - assuming they stay in Tampa Bay for the forseeable future - will soon be in position to sign a comparable deal.

It's amazing to think the Texas Rangers (playing in the country's fifth-largest metro area with a state-wide following) aren't considered a "large-market team." But as Pete Toms from The Biz of Baseball writes:
The Rangers current deal with FSSW was concluded in 2000. That deal pays the Rangers $17-$20 million annually (some reports cite $300 million over 15 years, others $250 million over the same) for their local cable TV rights. Only 10 years later Fox has agreed to QUADRUPLE (or more) their rights fee for Rangers baseball. This enormous and rapid increase in the value of the Rangers local TV rights is the most recent example of the critical importance of Regional Sports Networks (RSNs) to the biz of baseball. In 06, the Angels agreed to a 10 year/$500 million deal with FSN West. In 07, it was the Mariners and FSN Northwest agreeing to 12 years/$500 million. In 08, it was the Tigers turn when FSN Detroit agreed to pay a reported $400 million for 10 years.
There's no reason to think the Rays, whose contract with FSN/Sun expires after the 2016 season, won't reap a similar reward.

As I've written before, the Rays aren't a small-market team either, and if they don't alienate their fans with the stadium saga, they stand to increase their television revenue exponentially when the current deal expires. Or sooner.

1 comment:

  1. The Texas Rangers is example 1 on why this whole small market large market is bascially nonsense. The Rangers have the forth largest effective market in baseball behind only the Yankees, Mets and Phillies since LA and Chicago have split markets yet no one talks of them as a large market team. But, surprisingly three of these teams have had only limited success over the last 2 decades.

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