The Oncoming Baseball Financial Apocalypse

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Richard Hershberger

Richard Hershberger is a paralegal working in Maryland. When he isn't doing whatever it is that paralegals do, or taking his daughters to Girl Scouts, he is dedicated to the collection and analysis of useless and unremunerative information.

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30 Responses

  1. Avatar Kolohe says:

    The other very important factor, maybe the most important factor – is that live sports are one of the few things left that doesn’t lend itself to time shifted on demand viewing – with the associated *inability* to skip commercial breaks.

    So while middle persons are squeezed, and the sunk costs into legacy broadcast structures may be lost, as *content providers*, live sports are still in a preeminent position above all other content providers (i.e. the people that make movies and TV shows) because of their better inherent ability to monetize their content.Report

  2. Avatar J_A says:

    This is more like a bleg.

    Is there a place or webpage(s) where I can find out what shows are carried by whom, on a per show basis, so I can see if I need Netflix plus Hulu plus Prime, or if I am good with only one.

    I hate, hate, hate paying for ESPN and CNN and a lot of their companions, but I do like Top Chef :-), Amazing Race and Les RevenantsReport

    • Avatar Francis in reply to J_A says:

      I’ll add to the bleg. I have a TV in the kitchen and a second in the den. They are each connected to a box lent to me by Verizon Fios. The boxes are connected to a thick white wire. Thereafter, magic happens.

      How does cutting the wire work? How does Hulu arrive in my house without the Fios wire?

      Please assume that I have the tech capacity of the oldest living member of your family. As I’m typing this on my iPad, that’s not necessarily true; I did get the wireless router working. But a default presumption that I’m largely clueless about how TV works these says is a good place to start.Report

      • Avatar Richard Hershberger in reply to Francis says:

        First off, you need modern TVs. You know if you have a modern TV for purposes of this discussion if it is flat-screen and has USB ports. The good news is that the price has really come down on these. Eliminating cable bills will recoup the cost quickly. You need broadband, and a wireless router. Think of the router as a radio transmitter, sending the internet signal to your TVs. If you have broadband already, this is very easy. Unplug the internet cable from your computer and plug it into your router. Another cord will run from the router to the computer. There is the usual rigamarole of setting up software and a password, and you will have to enter the password into the TVs.

        I am by no means an advanced tech person, but I set this all up without any trouble. If you are stumped, pay the neighbor kid twenty bucks to do it for you.Report

        • Most (all by now?) of the per-TV devices plug into an HDMI video port on the television, not USB. With the exception of Apple TV, they’re all stripped-down Linux computers running one application and using the HDMI-enabled TV as the display.

          Measured by devices running his software, Linus Torvalds has now beaten Bill Gates and Steve Jobs.Report

      • Avatar rexknobus in reply to Francis says:

        @francis Here is our experience with “cutting the wire.” Obviously, YMMV. Six years ago we got tired of the $100 cable bill, had an infusion of cash that purchased a new TV, and decided to make the plunge. (We don’t watch sports, so that wasn’t a problem. Without cable I don’t think you can easily get the various ESPN feeds, so a need for sports programming seems to require sticking with cable.)

        So, canceled the cable service. All broadcast TV (ABC, CBS, NBC, FOX, CW, PBS) comes in high-def free over the air. No problem. And all of those broadcast networks also have little sub-channels with more programming (mostly re-runs, etc.) that can be interesting.

        We subscribed to Netflix streaming, and a couple years later Amazon Prime. Each of those runs about $9.00 per month. With a modern TV, hooking up was no problem. You already have a wireless router that feeds info to your iPad. That same router will feed info to your TV. A proviso: you need a good internet connection. If your iPad is working great online, then I will assume that you have good internet. (We have a DSL line via ATT that works fine for us.) Setting up the router/TV connection is the biggest IT issue you have. If that is beyond you, spring a few bucks for a tech person to come over and do the hook-up. Or a savvy friend. It really isn’t that big a deal to do, but if you are at all uncomfortable with that kind of computer stuff, your first month’s savings with no cable bill will easily pay for a hook-up consultation.

        Once your TV is hooked up to your internet, subscribing to the various services is super easy. They all want your business; they make it simple. Do a little research to see which services suit your needs — most of them have free trial periods.

        Voila! That’s it. The only thing that we ended up missing (again YMMV) was some programming on HGTV and a couple of other cable channels that we watched occasionally, but the money drain slowed drastically. For us Netflix and Amazon Prime covered most of the loss. As I said, I think that losing the ESPN resource of sports would be a “make or break” if sports is an issue.

        So, you need a good internet connection, a relatively recent model TV (so it can use the apps for the various services you might want to sign up for), and someone to connect the TV to the router. Oh yeah, and a big jar to put all the money you will save into and then use to go on a big trip somewhere!Report

        • Avatar Francis in reply to rexknobus says:

          So, to be clear, once I get my internet connection from Verizon [now Frontier] (which I’ve done) and connect a wireless router (which I’ve also done) then I don’t also need to pay Verizon for cable service as well. I just set up the TVs to connect wirelessly to the router and then I’ve turned the TVs into computers. This allows me to cancel the cable service.

          Is that correct?Report

          • Avatar Michael Cain in reply to Francis says:

            Cancel cable and subscribe to some set of content aggregators like Netflix or Hulu. The aggregation model is quite different as well.Report

          • Avatar rexknobus in reply to Francis says:

            @francis I think that will depend on the small print of your contract with Verizon.
            Since they (or now Frontier) supply the internet connection, is that part of a package deal that includes the cable service? If you are paying for the internet connection alone, and the cable is a separate thing, then perhaps you can just cancel the cable service. An easy way to find out is to call them up and cancel the cable — they’ll let you know if it’s all a package that can’t be separated or not. Good luck!Report

    • Avatar Richard Hershberger in reply to J_A says:

      I don’t know if anyone has aggregated this information or not, and it changes as the sites get and lose rights. You probably will have to just go to the individual site and search or browse their listing. I know that my wife watches Top Chef, probably on Hulu. Also, many broadcast shows on the legacy networks can be watched through the network’s website, though perhaps not immediately.

      You don’t actually need a TV for any of this. Depending on your physical setup, you might be just as happy watching on your computer. Or, you can get a low end laptop for under $300. There is something gloriously decadent about lying in bed with your favorite show running on your laptop on your stomach. Comfy chairs also work well. Also, tablets.Report

  3. Random thoughts…

    Carriage fees are more… complicated than your description. Bundling. Incest (cable companies own production companies and sell things back and forth). Bulk discounts. Reverse fees (those obscure high-number niche channels may pay for their slot).

    Cable will die more slowly than you think. There are a large number of people in the US who have cable because they can buy month-by-month and (in many cases) pay their bill in cash at a local office. I remember entire local sales campaigns built around “You don’t need a credit card to buy cable.”

    Because the ISPs and backbone internet providers have chosen not to implement multicast, cable has an enormous cost advantage for delivering live events. If you sell local baseball live over the internet, you need server capacity to deliver an individual full-bandwidth stream to every viewer. You have to pay transit fees (at least indirectly). There may be local (eg, neighborhood) delivery problems if too many people are watching. Almost all of that goes away with broadcast delivery.Report

    • Avatar Richard Hershberger in reply to Michael Cain says:

      I don’t disagree with any of this. Yes, things are more complicated. This post already veers dangerously into the “long form” category. I don’t have a time frame for the death of cable. For that matter, I don’t really think it will die entirely, though I think the business model will have to change at some point. And certainly there are reasons why cable technology has advantages for delivering live events. The central point is that I don’t think the model of making everyone pay for sports whether they want it or not is sustainable.Report

  4. Avatar Doctor Jay says:

    I’d heard about the SportsNet LA situation but not in detail before. Thanks for laying it all out.Report

  5. Avatar Fortytwo says:

    We pay $1500 per year for Directv. The only thing keeping us on is the ability to browse when we just want to watch general tv and the sports, particularly college football and to a lesser extent college basketball and golf. I’m basically paying $1500 for the ability to watch college football for hours a day for four months of Saturdays out of the year.Report

  6. Avatar Mo says:

    I do not think this going to lead to an apocalypse. The SportNet LA situation was the culmination of rights fees going up through the stratosphere. This has demonstrated the top limit, but anything getting renegotiated is going to be much lower. The fees won’t get cut, they merely won’t go up as much.Report

    • Avatar Richard Hershberger in reply to Mo says:

      That is the question. Before cord cutting was a practical option, I would have agreed. Non-sports fans would grumble, but they didn’t really have anywhere to go. Now they do. This is why I don’t think that SportNetLA is merely setting the cap. The fact that we are in year three of over half the market not getting Dodgers games establishes the precedent. The threat of the non-sports fans voting with their feet counts for more to the the cable providers than the perceived necessity of carrying the games.

      Look at the comments thread here. Much of it is non-tech types reacting with “Wait! There’s a way I can stop paying cable and still watch my shows? How do I do that?”Report

      • Avatar Mo in reply to Richard Hershberger says:

        I am quite familiar with cord cutting and have discovered that not cutting the cord is the most financially wise decisions (and will actually continue to be so going forward). Part of it is that I negotiated a sweet deal with Verizon, but when you look at the cost of the individual services, compared to the cost of bandwidth only, I am paying about $40/month for the video part of my service. However, that includes a sports package and HBO and Showtime. If I wanted to get a video selection that has my minimum requirements, I’d have to pay $50 and would lose the ability for random stuff which ends up opening up some pretty fun random gems.

        tl;dr: The unbundling is a monkey’s paw style wish for many people.Report

        • Avatar Kim in reply to Mo says:

          I am currently watching The West Wing — which interestingly enough seems to include time travel as a feature.
          I do not need current television until I’ve finished old television.Report

      • Avatar Damon in reply to Richard Hershberger says:

        If I can get Food network, TCM, A&E, Sy Fi, and a few others, I’d consider it. A pure internet connection would run me about 50 bucks a month. That leaves me with 100 dollars delta to play with. Generally I don’t watch movies, but I do watch a lot of stuff on those channels.Report

  7. “Apocalypse” is an overstatement only because this will happen gradually. When the NHL lost its national TV deal and the mount of money available dropped significantly all at once, the result was an entire season being cancelled.Report

    • Avatar Richard Hershberger in reply to Mike Schilling says:

      Baseball will benefit from a decentralized financial structure. In the NHL case it was a single national deal, meaning the hit came all at once to the entire league. Baseball’s national broadcasting deal is comparatively trivial. With baseball it is a collection of individual clubs’ deals, which won’t come up for renewal all at the same time. Another difference is that the NHL has a salary cap, so the hit was immediately transmitted to the players, hence the labor wackiness. With baseball, it is a collection of individual player contracts of wildly varying duration and terms. So that hotshot pitcher will, upon hitting free agency, discover that the market won’t pay him what it would have a few years earlier. He won’t be happy, but this isn’t the stuff of labor actions. It is entirely possible that the owners will try to use falling revenues as an excuse to screw the players. Their doing this is entirely within my world view. But that would be a separate discussion.Report

  8. Avatar Patrick says:

    By way of anecdatum, I cut the cord a year or two back. It wasn’t because of the three or four bucks going to the local regional sports network, but because of the total expense, coming in at around $120 a month. I realized that I could get everything anyone in the family watched through online streaming for about $20. Was I willing to pay a hundred dollars a month to be able to watch ball games on TV? No.

    It’s worse.

    I cut the cord last year, myself (well, the dish, I was a ten year DirecTV subscriber).

    Not entirely because of the total expense, although that was a major contributor.

    But also because for that total expense I got no guarantee of the service I wanted. When I hooked into DirecTV ten years ago, I could watch all 82 regular season Laker games either on the local broadcast channel, or on Fox Sports West. Last year I could watch about a dozen, because those were the ones that showed up on the basic package channels.

    I had NFL Sunday Ticket for a year, once. Because that was the only way I could watch 49er games down here in SoCal. But I didn’t really care about the rest of the package as much.

    Now, both the Dodgers and the Lakers have made the baffling decision to set it up so that a generation of potential fans won’t have the experience of having Mom or Dad grab the remote and queue up the game. That’s a lot of fan death by reverse osmosis.

    This ties into an undercurrent that is being played out in the contest between the content creator and the content consumer (the content carrier makes everything that much more complicated, of course).

    The creators look at the thing they create as entirely their property. In one sense it is, but in another sense it isn’t, because the value of their content is highly contextual to their content consumer base. Your baseball game broadcast has value because the fans consume it and share it and reinforce its value. Fandom is tribal, it isn’t a strict commodity to do with or without. If you’re creating a market space that deliberately makes it hard for fandom to do its thing, you’re doing more than cutting off your nose to spite your face.Report

    • Avatar North in reply to Patrick says:

      Fiber internet came to my neighborhood a year or two back. The hubby had a throw down with Comcast over the cable internet and ended up cutting the cord entirely. 150 per month went up in a poof of smoke (Fiber internet is 19.99 per month for ALL THE INTERNETS*). Cord cutting is a hell of a lot cheaper if you can get fiber.

      *Seriously, buying games on Steam takes longer to install than it does to download the packages.Report

      • Avatar Richard Hershberger in reply to North says:

        Fiber internet… Mmm…. My town is installing it as I speak. They are starting at the other end, where the light industry parks are, in the hope of attracting businesses, but within about two years they will cover the entire municipality. I am currently on barely-good-enough DSL. I am looking forward to the happy day the fiber reaches me.

        This is also a happy benefit of living in a main-street-Republican town. The ideology is strongly pro-business and pro-attract-business, so investing in a municipal fiber optic network seems simply good sense and a public good, much like the water and sewer. There is no nonsense about being offended at this as government overreach or preferring to leave it to the invisible hand to lay the fibers when it is good and ready.Report

    • Avatar Richard Hershberger in reply to Patrick says:

      I had NFL Sunday Ticket for a year, once. Because that was the only way I could watch 49er games down here in SoCal.

      Sports bars. Seriously. Go to one of those places with a gazillion TVs, and park yourself in front of the one with your game on it. Have a lovely carb-and-grease lunch and a couple of beers, and tip well. You likely will discover that you are far from the only 49er fan in the area, too. It will be fun. This would be impractical for other sports, but at just sixteen games this is entirely doable for football.Report

      • I’ve done it both ways to watch my Green Bay Packers. The sports bar route is certainly fun, and tasty. But I gained more weight, and I think I wound up spending more money than the cost of the NFL direct package. As my homebrew hobby attains a higher level of competence — my beers are good enough for competition, my kegs are getting assembled — I’ll have good beer on tap and my own food (which is already pretty damn good) so that’s my football Sunday solution for this year.

        @patrick you are more than welcome to make the trip and enjoy a 49er game at Casa Likko, so long as it is not broadcast the same time as the Packer game, in which case you’d have to content yourself with picture-in-picture.Report

    • Last year I could watch about a dozen [Laker games], because those were the ones that showed up on the basic package channels.

      That’s, what, Kobe missing only about 300 shots? How much more did you want?Report

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