The Rays are discussing a new long-term television contract with FOX Sports Net that would run through the 2033 season, John Ourand and Daniel Kaplan of Sports Business Journal report. According to Ourand and Kaplan, the contract still has some “hurdles the two sides have to overcome” but could come with an annual payout “around” $82MM per year.
It’s important to note that that’s an average payout and wouldn’t kick in immediately; as is typically the case with newly structured television contracts, annual revenue increases are gradual in nature. Ourand and Kaplan note that the Rays are receiving “close to” $35MM from FOX Sports Sun in 2018, which is the final year of their current contract. The contract presently being negotiated would up that sum to somewhere in the neighborhood of $50MM in 2019, per the report. Yearly revenues would then escalate over the remaining 14 years of the contract.
Obviously, a substantial increase in television revenue for any team is of note. But it’s particularly worth monitoring with regard to the Rays, who were recently under an ownership directive to cut payroll and drew the ire of fans and their own player. Cost-cutting moves that sent Jake Odorizzi to the Twins and Corey Dickerson to the Pirates didn’t bring much in the way of long-term value to the organization.
The Rays also traded longtime face of the franchise Evan Longoria to the Giants in a move that saved them at least $60MM, though in doing so they added a largely MLB-ready infield replacement in the form of Christian Arroyo and also avoided losing leverage with Longoria, who is set to earn 10-and-5 rights (i.e. full no-trade protection) shortly after Opening Day 2018. Steven Souza, too, was traded to the D-backs last week, though that swap brought the Rays more prospect value, and the team quickly signed Carlos Gomez for a sum that was actually slightly greater than Souza’s salary to fill the void.
That the Rays mandated even a moderate level of payroll-slashing with a $50MM BAMTech payout (received by all 30 teams) coming their way this offseason as well as an expected increase of ~$15MM in television revenue next winter won’t do anything to cushion the blow for those who were disheartened by the team’s slate of offseason moves. But television rights, at present, are a decidedly lesser source of revenue for the Rays than much of the league. Paired with some recent promising, albeit preliminary developments in the team’s quest to build a new stadium in the Ybor City neighborhood of Tampa, Rays fans have some reason for cautious optimism when it comes to the team’s long-term payroll outlook. (Or, at least, they have more cause for optimism than they have in quite some time.)
A 15-year deal covering the 2019-33 seasons at an average annual value of roughly $82MM would place the total value of the new television contract at more than $1.2 billion. Certainly, given that the two sides haven’t yet pushed negotiations across the finish line and reportedly still face some “hurdles,” it’s worth keeping in mind that those numbers are not set in stone. Negotiations should continue in March, Ourand and Kaplan report, adding that one complicating factor is 21st Century Fox’s sale of its regional sports network group to Disney — a transaction believed to be valued at a whopping $52.4 billion.