HELLO EVERYBODY I’M TOM MCCARTHY ALONG WITH CHRIS WHEELER AND WE’RE HERE TO TELL YOU ABOUT SOME BIIIIIIG NEWS TO START THE NEW YEAR NO I’M NOT GOING TO START TAKING SEDATIVES ON AIR BUT THE PHILLIES OUR EMPLOYER AND THE FINE MR. DAVID MONTGOMERY HAVE REACHED A DEAL WITH COMCAST SPORTSNET AND ITS NBC OVERLORDS TO BRING YOU PHILLIES GAMES FOR THE NEXT 25 YEARS.
Multiple reports tonight say that the Phillies and CSN have reached an agreement on a “massive” contract believed to be around 25 years in length.
David Murphy broke the news on Philly.com:
The Phillies and Comcast SportsNet have finalized a contract that will extend their television partnership well beyond 2015, when the previous deal was set to expire, the Daily News has learned. Terms of the new contract are unknown at this point.
A Comcast SportsNet Philadelphia spokesman confirmed the deal but declined to offer terms.
Kevin Cooney and Chris Branch provided additional reports:
In an emailed statement, CSN confirmed the reports:
“We’re pleased to confirm that NBCUniversal and Comcast SportsNet have signed a new long-term deal with the Philadelphia Phillies that will expand Comcast SportsNet’s role as the Phillies’ primary TV partner. Although the terms of the comprehensive deal are confidential, details surrounding the 2014 schedule of games will be provided in the coming months.”
This means that Comcast-NBC, which is basically the same entity, will broadcast all none-national TV Phillies games and, presumably, handle the pre- and post-game duties.
A 25-year deal is massive and has to be for a ton of money. We had heard previously that NBC was being considered for the Sunday games that were typically doled out to MyPHL17. These games are ratings wins and will be a huge boost to NBC programming around the games, including the local news.
The Phillies current deal is somewhere around $35 million per year plus an advertising revenue share.
Back in October, The Good Phight, referencing other TV deals around the country, estimated that the Phillies would get anywhere between $180 million-$275 million annually. Using even the low end of that estimate, a 25-year deal with CSN could be worth as much as $4.5 billion. And if it is indeed 25 years, that will take the Phillies and CSN through 2039, which would give them the longest TV contract in Major League Baseball next to the Yankees, whose deal with YES ends in 2042.
Why might the Phillies have been eager to get a deal done sooner rather than later? In October, I posited some theories:
Well, there’s a lot going on in the TV industry. We’ve already written about the unbundling of cable TV packages. Networks like ESPN and CSN get carriage fees from every cable subscriber who gets their channel, even though every subscriber doesn’t watch sports. [There’s a fight in Houston between the Astros and CSN Houston over that matter– CSN can’t reach agreements with local cable companies.] There’s a very real possibility that, eventually, cable subscribers will have a la carte choice of their channels (or, worse, they’ll just stop subscribing and start watching Netflix, which just leaped ahead of HBO in subscribers). This all means that, eventually, regional sports networks will spend less on rights fees. If you’re the Phillies, you want to get a deal done before that happens. Obviously.
And there are other things that will affect the industry in unknown ways. The NBA is about to reach an agreement to live stream games to local markets. If you have MLB.tv or another similar service, then you’re well aware of the local blackout rules that restrict you from watching local teams through any means other than your local cable provider. A shift in this paradigm could change the market.
There’s also a class-action lawsuit being brought by two Philly lawyers against sports leagues, teams and cable companies which just cleared its first major hurdle. It contends that, by forcing sports fans to pay for expensive cable packages, the leagues and cable companies have basically formed an illegal cartel. From a great article on Philly.com last week:
“Sports teams should be allowed to sell their games to sports fans in any TV market. This would bring down the price of sports content on the Internet and cable for tens of millions of consumers, Diver said.
A goal of Diver’s suit would be to allow a sports fan to strike a relationship with a favorite team or teams without having to buy a cable package or a league package of unwanted games. Another goal would be to dismantle the restrictions on how teams distribute their games on pay-TV systems.
The leagues and other defendants have lined up powerful firms to defend their practices and called the suit’s claims meritless.”
That would certainly impact local sports rights fees.
So now you see why it is in the Phillies’ best interest not to wait. The TV landscape is changing, rapidly. Apple might announce an update to Apple TV that could further disrupt the industry. This winter, Amazon is throwing its hat into the ring. Next year, Netflix may announce that they’ve taken over the world and are going to harvest your babies to power their yet-unannounced live-streaming capabilities. We really don’t know where it’s headed. But for now, live sports are cable TV’s lone barrier from total destruction. Networks willing to pay, and teams, like the Phillies, are eager to take the money while it’s still available.
We’ll update this post as more information becomes available.