The Cardinals have agreed to a new, 15-year contract that will continue to give FOX Sports Midwest exclusive rights to broadcast their games, reports Derrick Goold of the St. Louis Post-Dispatch. The rights alone will guarantee the Cardinals more than $1 billion, according to Goold, who adds that the Cardinals will also receive a minority stake in the network that will add further revenue on top of that sum.
The new contract will span the 2018-33 seasons, according to Goold, so it won’t kick in for another few years just yet. However, the Cardinals will, on average, receive more than double the annual amount they’re earning on their current deal over the life of the new contract. As Goold reports, the Cardinals will profit $35MM from their current TV deal in its final season (2017), but the rights fees alone will provide the team with $55MM in revenue in 2018 (to say nothing of the equity stake). That sum will continue to escalate in each year of the contract, he continues. Goold spoke to Cardinals CEO Bill DeWitt Jr. about the agreement, who confirmed the deal but did not cite specifics.
“This does give us a great deal of stability over the next 15 years and does so in a market that has been shifting,” said DeWitt. “It has a nice increase in rights fees as well as the equity component and as a whole it will allow us to remain as competitive as we have been with our payroll, with our spending in the international markets, with our activity in amateur markets and other ways we have invested in development. We have certainty going forward.”
The Cardinals haven’t exactly been a team with limited spending capacity in recent seasons anyhow — they’ve averaged a $114.19MM Opening Day payroll over the past five seasons, per Cot’s Contracts — but the new television contract will allow them greater spending capacity on their roster and international signings if the team wishes. Goold writes that the deal gives them room to stretch the payroll for “the addition of at least one core player” and could make contract extensions for rising stars Michael Wacha, Carlos Martinez and Trevor Rosenthal more feasible. (I’d add Kolten Wong‘s name to that mix as well.)
The Cardinals become the second mid-market franchise to sign a contract worth $1 billion or more this season, as the Diamondbacks inked a $1.5 billion deal back in February. Of course, the Phoenix market is notably larger than the St. Louis market, and Goold notes the discrepancy, pointing out that the D-Backs play in the 11th-largest market in baseball, while the Cardinals are in the 21st-largest.
Suffice it to say, while the Cardinals could augment their short-term roster in the coming 48 hours, a 15-year television contract that will immediately increase yearly revenue by as much as $20MM beginning in 2018 is far more impactful news for the team’s future. An official announcement of the deal is expected to come this morning, according to Goold.
1,000 miles away, Ted Lerner strokes his chin and eagerly awaits a court ruling in the MASN case, as well as the 2015 round of “reset” negotiations.
Great, higher cable bills.
Yeah, a true “small market team” they got there. MLB should definitely lump them in with the Rays and A’s, sheesh.
They seem to be using this ranking as a reference point:
stationindex.com/tv/tv-markets
Which actually lists Tampa Bay as the 13th biggest TV market in the US, while St. Louis is ranked 21st.
(And Oakland is part of the 6th biggest, although they’re sharing that with the Giants)
Tampa Bay is a huge market…given that the games are hard to get to in St. Pete and people stay home from the dome. Very valuable commercial territory
St. Louis then needs to stop claiming Iowa TV rights with no realistic possibility of broadcasting there
Too bad the Cards missed out on that competitive balance pick…they’ve sure been slumming it in for years
This isn’t monopoly money like some fans think it is. Where do you think this money comes from? Drastically increased cable bills! I’m dreading the day the Pirates sign one of these deals, and I’ll have to cancel my cable subscription.
It’s probably not DRASTICALLY increased cable bills, it’s maybe a buck or two at most. Go ahead and cancel your cable now and get it over with if a couple bucks is going to make you have to cancel. It may even be less for the St. Louis market since the FSM reach is pretty far and I’d say it’s an increase that gets spread across maybe 40M households instead of some of the rest of the regional nets that are more localized to 20M households at most. There’s some math involved and it’s not like the cost gets passed on to the customer 100% anyway.
Now if you wanted to make the argument that as a non-sports fan you shouldn’t be obligated to pay for sports channels that in aggregate jack your bill up $10+/mo, I would totally agree with you, but that’s not the argument you’re making so what you say doesn’t make a ton of sense. I’d sure rather not pay for New York sports in the New York area by default, but I don’t get a lot of choice over the matter if I want any sports.
It went from “a buck or two at most” to “$10+/mo” pretty quick there in your post. And if you don’t think they are 100% passing all of this cost onto consumers, I have a bridge here in Detroit I’ll sell you that goes all the way to Canada. There’s a reason cable and internet bills are 2-300% more than they were even a decade ago and it’s NOT due to them upgrading their services. Even phone/data plans have been getting cheaper or only modestly increasing as the tech becomes more efficient while cable just keeps skyrocketing as they let their infrastructure rot while they bilk every last dollar they can from consumers before their product is obsolete.
It’s not that bad losing cable. I cut the cord last year and have been listening to all the games on the radio this season. The money I’m saving has helped me attend a few more games this season and for the others that I “can’t miss” I’ll just head to BW3 or something to watch. People act like losing cable is the end of the world…it’s really not, in fact I’d argue it’s 10x better without it.
Good thing this poor small-market team gets to be in the competitive balance draft pick lottery.
Wonder how these deals are going to work out once cable goes bust? There is literally nothing you can’t find online anymore via Hulu or Netflix so live sports is the only reason to ever buy a cable package anymore (unless you’re one of those people that considers American Idol or America’s Got Talent or the Voice to be good television). Attempts to stop re-streaming of live sports won’t be able to keep up with the technology… it’s like the music companies when they tried to stop all music downloading to prop up the CD market. It’s doomed.
The smart companies are already running their own streaming channels, and it’s only a matter of time before baseball and the NFL just run their own streaming services and sell packages for those direct. Sad thing is, by the time that happens the cable companies will have looted us so heavily, that by then we’ll probably be grateful to pay mlb more JUST to get baseball on our TV’s than we’re already paying Comcast or Time Warner for our cable package.
It already is starting. MLB and NHL have packages you can buy and stream (albiet out of market games) on your phone, tablet, and gaming console. I haven’t had cable for years and although I do miss watching my teams when they play are showing it on cable, I moreso enjoy watching baseball in general and have no problem watching any team play. Once more people realize they can buy the MLB at bat and watch 85% of games being played each day, cable is screwed for sure.
Not really. I had mlb.tv when I lived out of market, but haven’t bought it since because I can’t watch my home team. I love baseball, but I love the Tigers more and people aren’t going to make the jump to mlb.tv if they can’t see their local market team. There aren’t THAT many hardcore fans of baseball above team. More likely, cable subscriptions will continue declining as people move to streaming, and mlb will wait until its back is up against the wall before dropping those market blackouts. Then cable is dead and we can all rejoice.
I was the same way for a while. I definitely would prefer to watch my Cubbies but I hated paying astronomical cable bills more. I agree that major sports will continue to be pushed up against the wall until they have to get rid of blackouts. That will be a happy day for sure!
Blackouts lifting only decreases the value of a Cubs deal. People in Iowa can then choose to pay MLB to watch the Cubs vs Comcast or whatever their next system is
If MLB goes on the NHL model….the streaming package will only be slightly less to subscribe to a single team. They won’t just end the blackout and give Iowa the 6 other teams…they’ll make us choose Twins/Cubs/Royals/Cards/Brewers or White Sox
That’s perfectly fine, I’d rather send my money direct to mlb and the teams so that I can follow my team than send it to a middleman like Comcast or Time Warner who takes a huge cut and uses the rest of my $ to fund garbage reality tv that only exists to sell ads and give the cable company MORE money.
Iowa has a 6 team blackout…which on most days is essentially a 12 team blackout
Eventually teams backs will be against the wall though. More and more people are cancelling cable because of their high prices. The only way they can compete is to drop the monthly payment, which will never happen. I could see cable becoming darn near obsolete in the next 5-10 years. The MLB won’t have a choice but to lift blackout.
It will never truly take off until the blackout rules go away. I say this as a Reds fan living in Charlotte, NC. I’m at least a good 7 hour drive to Cincinnati and I think everyone would basically agree this is Braves country. The Reds are considered an in market team and until they added a second Fox Sports channel, I was lucky to watch 10 games a year but since we are in market, it was blacked out.
Here’s the kicker, even if I wanted to use MLB.tv for just general baseball watching, in my area I am blacked out from the Nationals, Orioles, Braves, Reds and many times even the Red Sox.
Same as Iowa…
Not in the slightest. I live in NYC, I’ve been a Cardinals fan since I was a kid.
The only thing MLB.tv does is give people like me access to the games I would otherwise only see on SportsCenter. If you’re in the STL area, you can’t watch anything, FSM has the exclusive rights and you get blacked out. Same thing happens when the Cardinals are in town or the Mets are in STL, I have to watch the awful coverage on SNY and listen to Keith Hernandez ramble. (it’s worse than McCarver, by a longshot).
Cable is still your only option for local games, and that’s how it’ll probably be forever since it’s not in their best interest to waive their blackout rights for mlb.tv. Fox has wised up and lets out of market streams happen, which means I can finally watch the Fox games that aren’t Yankees games, but nah, FSM is safe for the meantime.
I just find it ludicrous that in Iowa..4 regional teams with no TV coverage would rather have people watch out of market teams and be out of market fans…without even selling their product to locals. They won’t even add an option to buy out of the black out. Makes zero sense for Milwaukee to wish fans in NE Iowa to be Dodgers fans..etc
McCarver has been GREAT on FSM. Much better than the national version that was alongside Buck Jr.
It’s not in Fox’s best interests, but it may soon be in mlb’s best interests. Of course Fox doesn’t want this to happen, but the point is that consumers are catching on to the fact that networks and cable companies offer them very little in the way of quality programming – other than live sports – that they can’t get elsewhere. It’s already taking a toll on subscriber numbers, so the companies have raised their rates to make up the difference and fund lobbying, which is only aggravating their customers further. It’s a bad business model and one that’s dying.
I know it seems like cable has always been and will always be, but once we remove our sheep hats we realize tv is less than 100 years old, it’s had color less than 50, and cable as we know it is barely over 30 years old. It’s basically becoming the landline of the future… those who grew up with it can’t let go or imagine life without it, but everyone else sees it as hopelessly and pointlessly outdated.
I’ll just take movie and TV service…I stream Netflix…that’s $8/month…And also have 3 other FREE streaming services such as Crackle….that’s a lot of TV. For $125 I can pull every out of market game.
It’s a bubble…. The game us built in consumer debt.
Android Box + KODI = No cable ever.
I haven’t had cable in over 2 years now. Rogers monopoly has pushed Canadians to stream everything now by the prices they charge.
Where is Dr. Evil when you need him?
Gotta think this might come to be known as the ‘Jason Heyward TV deal’.
Fittingly, this deal kicks in just when most of their major contracts expire. Peralta will be a free agent that offseason, as will Holliday if his option is picked up, Molina if his mutual option is not picked up, and Lynn. In addition, Wainwright will have just one year left on his current deal, and we’ll be nearing the end of our years of team control over Adams and Rosenthal if they aren’t extended. This will give them the money to either resign some of these guys or go shopping for replacements if we don’t already have them in-house.
Devil magic.