Baseball Seeks Key For the Fox TV Lock

Who needs Fox Sports Net? That seems to be the attitude of several Major League Baseball teams that have decided that launching their own cable sports network may be the way to go.

As the 2003 baseball season opens this week, Fox Sports Net still has a lock on the television rights for many of Major League Baseball's teams, according to BROADCASTING & CABLE'S exclusive annual survey of local baseball TV and radio deals. But Fox's dominance may be slipping as more teams decide not to sell their TV rights to an independent media outlet.

Is Fox concerned? "We take none of this lightly," says Fox Sports Net President Bob Thompson. However, he adds, Fox remains confident that "ultimately it will retain most of if not all of its teams."

The BROADCASTING & CABLE 's survey also found that MLB teams will take in nearly $692.2 million from local TV and radio. The bulk ($493.9 million) comes in the form of rights fees from regional cable networks, TV stations and radio stations. But an increasing amount ($198.3 million), from the sale of advertising time by teams that have opted to retain the rights and produce and sell games on their own or in partnership with local outlets. Teams that create their own cable networks may soon also start collecting cable affiliate fees.

Last year's launch of the Yankees Entertainment & Sports Network, partly owned by the New York Yankees, appears to have paved the way. MLB teams recognize they can enjoy the benefits of a dual revenue stream, cable affiliate fees and advertising, by setting up their own local sports networks.

This season, the Kansas City Royals will be seen on their own network—the Royals Sports Television Network. The network already has a deal with Time Warner Cable to reach 400,000 homes in Kansas, Missouri, Nebraska, Iowa, Arkansas and Oklahoma. It anticipates additional carriage deals.

The Royals' goal is to "once again become a regional franchise and to generate more revenues for the club which can be put back into players salaries, making us a competitive team," explains David Witty, vice president of operations and public relations for RSTN.

In October, the Minnesota Twins expect to launch Victory Sports Network, although no cable carriage agreements have yet been announced. Victory has a deal with ESPN for sports news and the rights to all University of Minnesota product and the Big Ten fare that ESPN produces. The Twins will appear on Victory in 2004.

The Baltimore Orioles are planning a 24/7 sports network for 2006, after their current deal with Comcast SportsNet expires. However, doubts about whether the Orioles will make that play have been raised by cutbacks at the team's Orioles Television Network, which retains the broadcast-TV rights and airs games on three TV stations.

The Houston Astros are considering a $265 million offer by the National Basketball Association's Houston Rockets to join them in forming a regional sports network. The Astros petitioned a state court asking it to require Fox to either match the offer within 30 days or forfeit rights to the Astros after the 2005 season.

Some say the Tribune's Chicago Cubs and the Chicago White Sox will exit their deal with Fox Sports Net Chicago to go it alone after the 2004 season. Tribune Co. President Dennis FitzSimons says the Cubs have a "good relationship with Fox" and that any talk about launching a network of their own is "just speculation."

Fox Sports Net's Thompson acknowledges the Yankee's YES Network is "here to stay." But developing a successful sports network is a difficult task, he says. "It's one thing to say we're going to start our own network, but it is a much different scenario of actually pulling it off."