Pay Per View Not an Answer to Money Woes : Television: With a loss of network revenue looming, baseball searches for ways to keep income flowing.
Baseball owners, faced with a probable revenue loss in the next network contract, are studying ways to generate new TV income. Pay per view on a widespread basis doesn’t appear to be in the picture. Not in the near future, at least, according to both baseball and television executives.
“I don’t think pay per view is the solution,” Commissioner Fay Vincent said. “Pay per view is a medium for unique, heavily marketed events such as a championship boxing or wrestling match.”
Said Eddie Einhorn, co-owner of the Chicago White Sox and a pioneer in TV sports production: “The events that have been successful on pay per view are emotional, last-minute buys (by viewers)--a big boxing or wrestling match. There’s too much baseball on free TV to attempt to sell it on a regular basis, and the government would bury us if we ever attempted to put the World Series or playoffs on pay per view.”
There is some thought that baseball would consider inter-league play as a way to attract pay-per-view subscribers, but Vincent said he is a traditionalist who does not favor diluting the impact of an American and National League meeting in the World Series, and he probably is supported by most owners in that.
Vincent added, however, that pay per view might work in places without major cable packages, such as Milwaukee and Seattle, and as a regional option for a fan of the Boston Red Sox, for example, who may live in Los Angeles but still wants to watch the Red Sox.
“Basically, there’s just too much baseball on free TV to consider pay per view a viable option on a national basis unless we offer something different,” said Philadelphia Phillies president Bill Giles, referring to the possibility of inter-league play or a realignment that would spark new interest in regional matchups.
Giles added that with changing technology, such as the introduction of fiber optics that will allow viewers to order the game of their choice over the telephone, it is difficult to guess how baseball will be presented on TV beyond the next contract.
Only two teams, the San Diego Padres and the Minnesota Twins, are in the pay-per-view business and only with moderate success at best.
The Padres have a 50-game deal with the San Diego Cable Sports Network. Games can be purchased on an individual basis for $7.95 in households that have an addressable cable system, or in various packages. A full 50-game package costs $187.50, or $3.75 per game.
The San Diego Cable Sports Network reaches 600,000 cable subscribers, of which 275,000 have addressable systems. Counting subscribers who purchase games on an individual basis and others who have bought one of the multigame packages, a top game will attract 22,000 households, according to Marty Youngman, who manages the cable network.
This season will be the ninth year that the Padres have been on pay per view, and it’s the third and final year of the current contract. According to Bill Adams, the Padres’ vice president of operations, this contract is different than previous ones. San Diego Cable Sports simply pays a fixed rights fee, believed to be less than $3 million, and it’s up to the cable network to make a profit. The team and the cable network used to share the risk.
The Twins’ deal with the Midwest Sports Channel calls for 50 of 74 telecasts to be shown on pay per view.
“I wouldn’t call it a profitable venture,” said Kevin Cattoor, the vice president and general manager of Midwest Sports Channel. “For most games, we get a 1% buy rate, although we had a 2 1/2% buy rate for two games against the White Sox late last season.”
Cattoor said the pay-per-view telecasts are available to about 250,000 homes, so a 1% buy rate represents 2,500 homes.
“Regular-season pay-per-view baseball just doesn’t work,” he said. “There are too many games on free television. In our case, we do 24 games on basic cable and 50 on pay per view.
“Pay per view is our secondary business. Our first priority is delivering telecasts to outlying areas in the state on basic cable. There is pay per view only in the Twin Cities area.”
Cattoor said when his company put the Minnesota North Stars on pay per view during the Stanley Cup playoffs last season, the buy rate went from 2% during the early rounds to 14% during the finals against the Pittsburgh Penguins.
He said the North Stars are marketing their own regular-season games on pay per view this season and attracting buy rates between 0.5% and 0.7%.
In Los Angeles, the Dodgers and Angels experimented unsuccessfully with pay-per-view in the 1980s. Dodgervision and Angelvision were short-lived ventures.
The teams now have separate cable deals with SportsChannel, a pay service that generally costs subscribers $9.95 per month, although the fee is higher in some areas.
The Dodgers and Angels each make $3 million per season from SportsChannel, a far cry from the more than $40 million a year the New York Yankees make from their cable deal with the Madison Square Garden network, which will televise about 100 games in 1992.
But if the Dodgers and Angels hope to make more from cable, SportsChannel probably isn’t the answer. SportsChannel, saddled with a weak sports lineup, has been beset with financial problems almost from its inception.
The recession has been part of the problem, but the pay concept appears to be the biggest drawback. SportsChannel was hopeful of having 500,000 subscribers but has fewer than 100,000.
Some industry observers say SportsChannel will either go under or merge with Prime Ticket, but the latter possibility doesn’t mean the Angels and Dodgers automatically would have a new outlet.
John Severino, Prime Ticket president, is cool on baseball. “There are just too many games on television,” he said. “If we were to pick up baseball, it would have to be at the right price.”
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