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Q&A: For the Angels, Bally Sports is Plan A. What could Plan B be?

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Q&A: For the Angels, Bally Sports is Plan A. What could Plan B be?

As a long-time Angels fan, the rollercoaster of emotions I have experienced throughout this team’s history is nothing short of extraordinary. The latest development regarding the potential loss of our beloved team on television has me feeling a mix of concern and intrigue.

Following three days since the Angels ended what turned out to be their most dismal season in the team’s history, their supporters now grapple with an immediate and pressing issue: Can they anticipate catching their team on TV during the upcoming season?

It seems like the response is affirmative, and it may follow a similar pattern as the current season. However, on Wednesday, the proprietor of Bally Sports hinted at possibly ceasing the transmission of games for the Angels and almost all other teams.

The ultimate decision lies with a federal bankruptcy court, meaning things aren’t set in stone just yet. Both the Los Angeles Angels and Major League Baseball have chosen not to offer comments at this time. Below you will find some questions and their known answers.

What is happening in court, and what is happening with the Angels?

Approximately 19 months ago, Bally sought protection under bankruptcy laws. Their proposed strategy to exit this financial predicament might involve terminating agreements with all sports teams except the Atlanta Braves. However, it’s important to note that this doesn’t necessarily mean other teams can’t negotiate fresh contracts that could potentially save Bally significant amounts in licensing fees.

For the Angels, Plan A involves ongoing negotiations with Bally regarding a revised contract. They are willing to give up some fixed income to dodge the potential fiscal risks associated with a future focused on streaming services.

Is it possible for me to catch the Angels games on TV next season if they can’t work out a revised agreement with Bally?

With high probability, Major League Baseball (MLB) might continue to distribute games in a similar manner as for the San Diego Padres, Arizona Diamondbacks, and Colorado Rockies – by providing a streaming service while striking partnerships with cable and satellite providers. For instance, the monthly cost for the Padres’ streaming service this year is $19.99.

Could the Angels explore other options?

They could. The Ducks, for instance, are offering a free streaming option as well as 65 free, over-the-air games on Channel 11 or Channel 13. The Ducks are one of several NBA and NHL teams sacrificing revenue — at least in the short term — in exchange for the ability to reach any fan in their local market.

Where does MLB stand?

Contrary to the NBA and NHL, Major League Baseball (MLB) has advised its clubs against accepting a reduced deal from Bally’s.

For quite some time now, Major League Baseball (MLB) has been eager to introduce a nationwide streaming bundle, but only if they could successfully negotiate the streaming rights for a substantial number of their 30 teams.

The Bally strategy might steer Major League Baseball (MLB) towards this change. The proposal announced on Wednesday would release 11 teams from any obligations related to Bally.

If four more Major League Baseball (MLB) teams lose their broadcasters, it might create a chance for the league to sell streaming rights for about half of its teams simultaneously.

A potential party with an interest in those rights: ESPN, specifically for their ESPN+ platform. According to reports, ESPN is contemplating whether to renew or renegotiate its national Major League Baseball package – featuring Sunday Night Baseball, the Home Run Derby, and wild-card games – and streaming rights could be a key factor in persuading ESPN to continue the deal.

If the Angels and other teams decide to play at Bally again or move elsewhere, it might create complexities for Major League Baseball’s arrangements, depending on the specific details of those agreements. Typically, regional sports networks only provide streaming access to subscribers. Last season, five MLB teams (excluding the Angels) gave Bally permission to stream their games to non-subscribers.

Would the Dodgers be part of a national streaming package?

It’s highly unlikely that the Dodgers’ current contract with SportsNet LA will expire before 2038, as it is set to last until then.

Large-market teams like the Dodgers, who also own local cable networks such as YES (New York Yankees), NESN (Boston Red Sox), and Marquee (Chicago Cubs), have the potential to earn significantly more money individually compared to small-market clubs. It’s improbable that smaller teams would be willing or able to cover the enormous costs required for buying out these wealthy franchises, even if they were open to such a proposal.

What is the Angels’ current television deal?

In 2011, what was known as Fox Sports had let go of the Lakers to Time Warner Cable, while the Dodgers’ television rights were soon up for grabs. Angels owner Arte Moreno smartly took advantage of this situation by terminating a Fox Sports contract worth half a billion dollars and signing a new one worth $3 billion instead.

Currently, the contract initially held by Bally is still valid. As per Moreno’s reports, Bally owes The Angels a sum of $112 million in rights fees for the year 2023. Based on Sportico’s estimates, The Angels had a total revenue of approximately $407 million that same year.

There’s a question mark about approximately 28% of the team’s income, which may lead to reduced funds for player acquisitions during the upcoming winter period, as decided by Moreno.

What has commissioner Rob Manfred said about teams that have lost their regional sports network?

“We think that reach is a really important change,” Manfred said at the All-Star Game in July.

San Diego stands out with nearly 40,000 subscribers, a significant figure. However, from a financial standpoint, it doesn’t match the earnings of the Regional Sports Networks (RSNs). The RSNs were an exceptional business model where many people paid for content they may not have actively wanted, and that level of revenue is difficult to duplicate.

Is it still the case in 2023 that if a team loses their local TV contract, they will receive at least 80% of the earnings from that deal, with Major League Baseball covering any remaining amount shortfall?

No.

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2024-10-03 00:31

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