The Boob Tube

Living in Cleveland, this whole DirecTV-MLB Extra Innings deal went under the radar as I’m assured of seeing all Tribe games on STO. Not so for fans outside of Northeast Ohio.

With that in mind, it’s time for a guest column from serial poster Cy Slapnicka addressing how MLB’s new TV venture looks like the latest example of MLB teams looking like the figures on an Electric Football Game, nobody knows where they’re going or where anyone is else is going, with no semblance of an overall plan or any sort of foresight.

With that, I present the comments of an expatriate Indians fan, living in Chicago:
So, in case you haven’t heard.... MLB is talking about selling exclusive rights for the Extra Innings baseball package to DirecTV. This does not affect Indians fans living in Cleveland, but for those of us who live throughout the country; this is like telling us there is no Santa Claus. I know the NFL does this, so some of you may not think it is a big deal. However, if you want to watch a Browns game, you can easily head to your local watering hole and watch them lose once a week. With the Indians, I don’t think any of our wallets, waistlines, livers, or marriages could handle 162 games a year at the bar. Nor do any of us want to be forced to leave our own friendly confines to do catch a game.
I’ve done a bit of investigating and this is what I’ve found out thus far:

• The team owns the rights to their games broadcast within their viewing area. So for the Indians, this is basically a big chunk of real estate around Ohio and a few surrounding states. The Indians own the ability to broadcast their games within that area.
  
• MLB owns the rights to games outside of that area. So, the right to broadcast an Indians vs. Orioles game in Denver would be owned by MLB. What this means is, even if you can get SportsTime Ohio in Denver, you cannot see the game. That is because MLB has decided that if you are outside of a team’s viewing area, you can only see their games on National broadcasts or on Extra Innings.
  
• WGN and TBS are considered “national” networks and have special agreements (made years ago) honored by MLB that allow them to broadcast Cubs and Braves games, respectively.
  
• Networks such as STO, YES, NESN, and the Fox Sports regionals are considered “regional” networks. Regional networks are not allowed to broadcast games outside of the MLB approved viewing area for that team. Basically, I can get STO through Dish Network in Chicago, however all Indians games would be blacked out.
  
• DirecTV does not even carry STO as a regional sports channel nationwide, as Dish Network does.
  
• Congress is investigating MLB and DirecTV and whether they will be allowed to only provide Extra Innings via DirecTV. Obviously this is interesting, as the NFL has not drawn much attention with their deal. However, I feel MLB is so dysfunctional; they deserve to be embarrassed on Capitol Hill…. even though our government has more important things to do.
  
• The current deal is rumored to be for $700 million over 7 years. This would be the rights to the Extra Innings package. MLB would also get a cut from each package sold, not sure how much.
  

I feel forcing consumers to use DirecTV (where MLB plans to launch its own channel by 2009) is a big mistake. There are three rational reasons I can see for signing up for this package:
1) You are a bar
2) You live outside your favorite team’s viewing area
3) You are a huge fan of all things MLB.

Now, most bars already use DirecTV, so the $700M is not well spent getting them to sign up. They will use DirecTV and buy the package even if Comcast or Time Warner Cable carries the package. And I am guessing that very few people exist that would sign up for DirecTV and the package because they can’t get enough MLB games. So again, a waste of money by DirecTV and MLB would seem to be limiting their market for the package.

So basically, you have to assume they are targeting people that are huge fans, but do not live in their home team’s viewing area. People like me. And this does not include Braves or Cubs fans, as most of their games are broadcast nationally. Same for teams like the Red Sox and Yankees, as they receive an awful lot of national coverage as games of the week, Wednesday night baseball, etc.

I have a number of problems with their approach to this and it shows they don’t understand people like me. And I also wonder how any MLB team can allow this to happen…. my beloved Indians or anyone else besides the Cubs, Braves, Yankees, or Red Sox.
Force me to switch to DirecTV? Not likely. I used to have DirecTV and life was grand. The NFL package was free the first year, I had TiVo, and the free premium channels were for a few months (i.e. Cinemax at 2am).

Then I got used to service interruptions whenever a storm hit. I called their customer support and realized how poor they were. (As an example, one time I called I was passed on to the “third”, and presumably more advanced, level of technical support and the phone line went dead. When I called back, I was told there was no “third” level of customer support). Eventually, my DirecTivo died and I was forced to buy a new one at a hefty cost, as there is no “rental” equipment like with Dish or cable companies. I then found out they phased out the Tivo interface for their DVR and went with their own DVR interface that was not nearly as good.

What incentive do I have to sign up for DirecTV? All of these problems, the requirement that you have a dish on your dwelling, have a line of sight to the Southern sky, cannot package your service with Internet and phone, and get an often times inferior HD package…just for MLB games?
No thanks. Fans are going to love this money grab.

I basically have two choices if I want the games. I can either not switch to DirecTV on principal OR sign up for the service in Cleveland just to stick it to MLB and DirecTV. Think about it, I sign up for DirecTV or even better DISH NETWORK in Cleveland and take the equipment to Chicago and install it at home. All my network programming will be the same AND at the same time, sans local news and broadcasts. I get Indians games AND Browns games (not sure if that is beneficial to my sanity) for FREE and I get STO’s other programming. If I really miss my local news and any other local programming (Oprah 5x’s a day), I can get an over-the-air antenna for HD. If you live in the Eastern or Central time zone, this solution for Indians games would work. And there is the added bonus of Dick Goddard and Wooly Bear Festival updates.

The me-first aspect of this aside, I have a serious problem with MLB doing this in general. There are a number of issues I’ll touch on:
First and foremost, how much money are they really going to make? If the $700 million number is split evenly among 30, that comes out to $2.3 million a year for 7 years. Wow, we can sign a utility infielder…. thanks Bud Selig. The competitive balance has been restored. Seriously, they sold their souls for a 5th OF. And when I say “they”, I mean MLB and the owners as a collective group. They may get a decent chunk of change for subscriptions, depending how the money is broken down between teams and DirecTV, but how much really? Apparently, enough to destroy lots of goodwill. And how many subscriptions will they lose from their current model of allowing many providers to offer Extra Innings? It would be interesting to see the numbers, as will the $700 million be enough to offset the decrease in subscriptions from cable and Dish sources over the next 10 years? Will it offset any loss of fans that occurs?

And secondly, IF they are going to tell consumers how they must consume their product, can they at least be innovative? Or perhaps do something that will make it worth my trouble to do what they say? For instance, with this model…DirecTV directly competes with MLB.tv. Does that make sense? Who knows if MLB.tv will continue with the new agreement, but I have a revolutionary idea for Bud Selig. Al Gore invented the Internet at least 10 years ago. Why not package MLB to cable, satellite, and Internet companies. I live in Chicago. Comcast and RCN are the big cable companies and, of course, Dish and DirecTV are satellite. They all offer some form of bundled cable, Internet, and phone services. All things being roughly equal, what if one of them had an MLB package that got me access to Extra Innings, the regional sports networks I want, online access to MLB.tv, and the mlb.com game day audio? I would happily switch to that provider yesterday. I wouldn’t care if I were buying my services from Bin Laden Communications and directly funding evildoers. I’d pay top dollar for this package, as I’m obviously not spending my discretionary income on season tickets at the Jake or Browns games. I’d pay much more than the approximately $200 DirecTV will charge me for Extra Innings only.

If the DirecTV deal does go through, I just hope they have enough sense to give Extra Innings subscribers access to the XM broadcasts. For those that didn’t know, XM radio is broadcast on DirecTV music stations…. but DirecTV currently does not provide access to the XM stations that broadcast all MLB games. And the XM discussion raises another point. Do they lack the foresight to see where communications and the Internet are going? They have a contract with XM radio for 10 years. What kind of recourse does XM radio have when people are able to connect to the Internet in their cars, from personal devices such as PDAs, phones, and iPods? MLB.com is currently offering online audio broadcasts, the same as XM. I don’t know about you, but I’d rather sign up for the MLB.com one if I could listen anywhere.

Another thing I don’t get with this deal is, why are the owners allowing this to happen? There are a number of factors that would seem to make this a bad deal. First of all, TBS and WGN are “national” networks and are allowed to continue to broadcast their games nationally? So, MLB has a deal with the groups that own the Braves and Cubs allows them to air their games across the country on cable channels owned by that same ownership group? How is that fair? No doubt they can use some of that cable revenue to support their team (even if the Cubs aren’t so good at that part).

What is interesting, STO is considered a regional sports network. So are YES, NESN, and the Fox Regional Sports Networks. With the Dolan family connection to Cablevision and Steinbrenner having more money than God, what is to stop them from creating a new “national” network and putting their games on it? All they’d need is a few Seinfeld reruns and a few old movies and they’d be another TBS. I know it takes more than that and they’d need to get providers to pick up the network, but they’d theoretically be able to do something. Well, MLB would prevent that. According to MLB, the only people allowed to do that are the Cubs and Braves. I would have a serious problem with that if I were the owner of another team.

Another point that brings up is how they figure out the revenue sharing percentages from Extra Innings. Do the Cubs deserve any of that revenue, when it is quite likely exactly ZERO Cubs fans purchase the Extra Innings package? What about the Braves?

And the owners have also invested a lot of money in their regional cable networks (at least the owners that own one). I’m sure it is hard to get those networks picked up by satellite providers and cable providers outside your team’s market when they can’t broadcast games. The Yankees have a distinct advantage over the Tribe due to their large fan base, but why not help all your teams out here? Why not use some of the negotiating power during this deal to ensure that DirecTV carries ALL MLB team regional sports networks? That way your fans have a good reason to sign up AND you are helping your owners out. If you aren’t going to allow those teams to broadcast their games across the country, at least allow their fans to get some of the other content they do want…such as minor league games, news about the team, spring training shows, etc.

And finally, if MLB is going to be ignoring the “regional” networks, can they at least provide some better content? At least the NFL provides a channel. It’s not great and it was an evil move to put games on it, but at least they have good content. Heck, at least they have a channel. And if this deal is struck, can you at least mandate that by a certain date all games will be in HD? This is a multi-billion dollar industry; can we at least see it ALL in HD? Is that too much to ask? If you cannot broadcast all games in HD, you deserve to be demoted to AAA.

And while this money grab is occurring, why not package the online broadcasts with advertising too? I’m sure there are agreements in place, but I’m also sure they can figure out a way to squeeze more money out this.At the end of the day, I think this shows just how weak MLB is from a unified ownership perspective. Can you imagine the NFL owners collectively allowing the Cowboys and Giants to have their own national networks on which their games were broadcast, where they were able to generate additional revenue, while everyone else was restricted by their viewing area. They can’t handle drugs, they can’t handle the players union, and they institute stupid rules like the All-Star game deciding home field in the World Series.

Thanks Cy. 8 days until the pitchers and catchers arrive in Winter Haven.