Colorado Rockies: Can a new TV deal keep Nolan Arenado long-term?
By Jake Shapiro
The Colorado Rockies have arguably the worst television deal in baseball. Not only have the fans been shortchanged by the second-fewest televised games in the show, but the club itself has seen less money than just about everyone else.
The current deal (which expires in 2020) will have amassed the Colorado Rockies $200 million over a 10-year period to televise 150 of their games a season on what is now AT&T Sports Network. This contract was signed right before baseball saw an explosion in regional sports network TV deals, led by the Los Angeles Dodgers’ 25-year $8.35-billion deal signed in 2014.
Only the Tampa Bay Rays and Miami Marlins had deals that were as lowly grossing as the Rockies, paying just $20 million a year. The Marlins’ deal ends the same year as Colorado’s and it’s unclear if they can sustain in South Florida so it’s hard to compare. However, the Rays’ deal expired with season’s end and may hint at what Colorado could see.
According to Sports Business Daily, as of the last update, Tampa Bay is expected to be re-upping with Fox Sports Network on a $1.23 billion deal over 15 years ($82 million per season.) Tampa is also a solid comparison in terms of TV market size, being somewhat sneakily the 11th biggest market in the country to Denver’s 17th.
But the differences stop there, with the Rockies’ ratings shooting up the past two seasons on the heels of their consecutive playoff appearances. Denver is nearly doubling Tampa’s baseball viewership in primetime, thanks to an 11 percent ratings increase just in the last year.
Still there needs to be some context other than the Rockies are overdue for a payday in which could see more than seven times what they’re getting year over year on their current TV deal.
The television industry is more or less falling apart with the ever-increasing audience on streaming services. Cord-cutters have led to falling subscription numbers across the board with not even live sports being immune though it has seen less impact than most other programming.
Disney’s purchase of Fox’s assets included the sale of the Fox’s nearly two dozen regional sports networks (RSNs) to Disney. But as a stipulation to prevent monopolization, Disney has to sell those RSNs and is having trouble doing so. One bidder that has emerged is the Sinclair Broadcast Group, who is getting into the RSN game in partnership with the Cubs.
Going back to Disney, their accelerated purchase as the majority stakeholder of BAMTech (Major League Baseball Advanced Media’s technology to stream live events), now 60 percent ownership of Hulu and planed streaming service hints that they are interested in sports assets yet see the future in streaming.
The bad news for Disney and many fans is that baseball has continued to struggle to workout in-market streaming deals with baseball asking RSNs to pony up even more money for streaming rights. MLB’s current agreements have expired and the only streaming for baseball in 2019 (as of now) will be MLB.tv, which does not allow for in-market streaming. Many markets like Denver have had little to no access to streaming.
The Dodgers have made a lot of money owning their own TV station but it has caused a nightmare for many fans blacked out from games. A similar situation in Houston led many to believe that the RSN-MLB mega-money bubble may be popping. This seems to be the general read of the situation so the Rays and Reds getting billion-dollar deals is really good news.
Because the Rockies deal expires within the next two years, Colorado now has to view this in the horizon and as an opportunity to cash in. While some of it may look bleak right now given the upheaval of cable TV, the streaming world will look more clear a few years from now.
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The Rockies have already started to plan for the money that could come along with a massive TV deal but have yet to lock anything in. The extension of Charlie Blackmon that will see him make over $20 million a year into 2022, contracts of relievers Wade Davis, Bryan Shaw and Jake McGee, along with a year and a mutual option on Ian Desmond are the only dollars committed that long-term.
With Nolan Arenado set to become a free agent following the 2019 season and their terrific pitching staff all to be arbitration-eligible, many fans have looked at this possible new TV deal as a godsend.
Experts believe Arenado could get a deal worth $250 million for nearly a decade. In other words, essentially 15 to 25 percent of the Rockies new TV deal could go straight to Arenado. This isn’t unheard of either, many look at Albert Pujols‘ $254-million contract and see it as a mistake but the Angels got their $1.5-billion TV deal in part thanks to his signing. And Arenado isn’t nearly close to the cliff Pujols fell off of.
"“You can (plan for the TV deal) to a certain to degree, you can’t lock anything in,” Rockies GM Jeff Bridich told Rox Pile at the Winter Meetings. “I’m not personally responsible so I can’t speak to the specifics but I know there’s a lot of research that goes into that behind the scenes. I think everyone is hopeful our next TV deal is a good one as our last have been. We’re still aways from that.”"
The Rockies have continued to talk about responsible growth and have even backed that by stating an Arenado extension can fit that plan. Their playoff success has helped them in positioning for a TV deal, short-term budget and convincing Arenado of a commitment to winning.
"“The plans about growth of our payroll doesn’t happen in a year to year vacuum. We try to do it more broadly than that,” Bridich said. “The postseason and the things that come along with it; Our great fan support, welcoming north of three million fans into the ballpark and what that means to us and our players certainly help. We have plans in place and we can message our plans in the short to mid-term based on those factors like success. The nice thing is that all those things point up.”"
There also is more money coming in nationally as MLB’s deal with Fox is getting a billion-dollar increase through 2028. MLB’s media rights deals with Facebook, ESPN ($5.6 billion) and Turner Sports ($2.6 billion) expire following the 2021 season. That will spell even more money, though it’s evenly distributed among franchises so the Rockies will see no advantage over their rivals.
Denver already features two RSNs in Altitude and AT&T Sports and it’s doubtful the Rockies have the resources to go at it completely alone. Altitude is owned by Kroenke Sports and Entertainment, which also owns the Avalanche, Rapids, Nuggets and a new FM radio station. Could they make a play?
The Rockies’ media rights could impact their ability to sign Nolan Arenado long-term. If the two do part ways, however, Colorado should have similar capital to their competition to position themselves for sustained success. This is so long as the mega TV deals fall in line with what we’ve seen.